Alert December 26, 2012

CFTC Approves Final Rule on Records of Transactions in Commodity Interests

The CFTC approved a final rule that will require futures commission merchants, certain introducing brokers, retail foreign exchange dealers, and certain members of designated contract markets or swap execution facilities to record oral communications that lead to the execution of a transaction in a commodity interest.  Covered communications include those concerning quotes, solicitations, bids, offers, instructions, trading, and prices.  Oral records must be retained for at least one year, while certain written records must be retained for at least five years.  The rule, which amends CFTC Regulations 1.31 and 1.35, is intended to conform the regulations to recordkeeping requirements for swap dealers and major swap participants.

The final rule will become effective on February 19, 2013.  Compliance with the oral communications recordkeeping requirements will be required no later than December 21, 2013.