Alert January 11, 2011

CFTC Proposes Core Principles for Swap Execution Facilities

The CFTC issued a release proposing rules, guidance and acceptable practices that apply to the registration and operation of new types of entities called swap execution facilities (“SEFs”), which are regulated marketplaces for the trading or processing of swaps that (a) facilitate the execution of swaps and (b) are not designated contract markets.  The proposed rules implement the new statutory framework for SEFs in connection with core principles set forth by, and new regulations under Sections 5h and 2(h)(8) of the Commodity Exchange Act enacted by, the Dodd-Frank Act.  The CFTC is seeking comment on all aspects of the proposed rules, guidance and acceptable practices; comments are due on or before March 8, 2011.