CFTC Announces the Start of Mandatory Clearing

On March 11, the CFTC announced that swap dealers, major swap participants, and private funds active in the swaps market are required to begin clearing certain index credit default swaps and interest rate swaps that they entered into on or after March 11.  The clearing requirement applies to newly executed swaps and changes in the ownership of a swap.  CFTC Release.

CFTC No-Action Letters

From December 14 through December 31, 2012, the CFTC released the following no-action letters:

CFTC Interim Final Rules on Business Conduct and Documentation Requirements

On December 18, 2012, the CFTC approved interim final rules for swap dealers and major swap participants which defer compliance with certain business conduct and documentation requirements until either May 1 or July 1, depending on the regulation.  Comments must be submitted within 30 days after publication in the Federal Register.  CFTC Release.

CFTC No-Action Relief for Swap Dealers and Major Swap Participants

On December 7, the CFTC issued limited no-action relief to swap dealers and major swap participants from compliance with the prohibition in Regulation 23.22(b) against permitting a person who is subject to a statutory disqualification to effect or be involved in effecting swaps on behalf of the swap dealer or major swap participant.  CFTC Release.  No-Action Letter.

CFTC No-Action Relief for Certain Swap Transactions

On December 6, the CFTC issued a no-action letter that provides swap dealers and major swap participants with relief from the requirement to disclose the pre-trade mid-market mark to counterparties in certain foreign exchange transactions under Regulation 23.43CFTC Release.  CFTC No-Action Letter.

On November 30, the CFTC issued a time limited no-action letter granting relief for bespoke or complex swaps from certain reporting obligations.  CFTC Release.  CFTC No-Action Letter.

SEC Proposal for Security-Based Swap Dealer and Participant Standards

On June 29, pursuant to Title VII of the Dodd-Frank Act, the SEC proposed rules to impose business conduct standards on security-based swap dealers and major swap participants. The proposed rule would: (i) require these swap dealers and participants to communicate in a fair and balanced manner and make certain disclosures; and (ii) impose additional requirements for dealings with special entities such as municipalities, pension plans, and endowments. Comments must be submitted by August 29. SEC Release. Proposed Rule.

CFTC Proposed Rules on Capital Requirements for Swap Dealers and Major Swap Participants

On April 27, pursuant to Section 731 of the Dodd-Frank Act, the CFTC proposed rules that would mandate capital requirements for swap dealers and major swap participants that are not subject to prudential regulation by the Fed, OCC, FDIC, FCA, or FHFA. Capital requirements would be adjusted depending on whether a swap dealer or major swap participant is a futures commissions merchant, a nonbank subsidiary of a U.S. bank holding company, or neither of the foregoing. CFTC Fact Sheet.