The CFTC has approved final regulations establishing a registration process for swap dealers (“SDs”) and major swap participants (“MSPs”), although the rule defining the terms “swap dealer” and “major swap participant” has yet to be finalized. As such, the registration requirement will not go into effect until the definition becomes effective.
Registration is done by filing a Form 7-R and, for each of the SD’s or MSP’s principals, a form 8-R and fingerprint card. In addition, the SD or MSP must demonstrate compliance with the Section 4s implementing regulations that impose, among other things, capital and margin requirements, reporting and recordkeeping requirements, daily trading records requirements, business conduct standards, documentation standards, trading duties, designation of a chief compliance officer, and, with respect to uncleared swaps, segregation of customer funds.
The Commission is delegating the registration functions to the National Futures Association. Unlike associated persons of other registrants, such as futures commission merchants, commodity pool operators, and commodity trading advisors, persons associated with swap entities are not required to register. However, subject to certain limited exceptions, a SD or MSP may not permit any person associated with it who is subject to a statutory disqualification under section 8a(2) or 8a(3) of the Commodity Exchange Act to be involved in effecting swaps on its behalf.