Developments in Securities Regulation, Corporate Governance, Capital Markets, M&A and Other Topics of Interest. MORE

In a joint rulemaking with the SEC announced here, the CFTC voted today to approve a final rule defining the term “swap,” which will trigger compliance requirements under several major CFTC swap market regulations. As Commissioner Wetjen put it: “The new swap regulatory regime is on the verge of becoming a reality.” Sixty days after the new swap definition rule is published in the Federal Register, swap dealers (SDs) and majors swap participants (MSPs) must comply with registration requirements, internal and external business conduct standards, and certain reporting and recordkeeping requirements, and all market participants will be subject to spot-month position limits with respect to swaps referencing certain energy and agricultural commodities. SDs and MSPs must be reporting all of their swaps after an additional 90 days, and, 90 days after that, all swaps regardless of counterparty-type must be reported. Commissioner O’Malia’s statement predicted that “many companies will find the registration and compliance schedule to be very aggressive and quite challenging.”

Previous blog posts discussed the final rule’s interpretations regarding certain kinds of consumer and commercial contracts that fall outside the definition of “swap” and the exclusion of “forward contracts” from the definition pursuant to the Dodd-Frank Act.

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