On January 11, pursuant to Section 724(a) of the Dodd-Frank Act, the CFTC adopted a final rule regarding the protection of cleared swaps and collateral belonging to cleared swaps customers of futures commission merchants (FCMs). The CFTC adopted the Legally Segregated Operationally Commingled Model (LSOC Model, or Complete Legal Segregation Model), which provides that: (i) pre-bankruptcy, cleared swaps collateral of all FCM cleared swaps customers may be kept together in one account, but the FCM’s own property must be kept segregated and (ii) post-bankruptcy, the collateral of one cleared swaps customer may not be used to cover the obligations of another cleared swaps customer or the FCM. CFTC Release. CFTC Final Rule.
Dodd-Frank
CFTC Final Rules on Registration of Swap Dealers and Major Swap Participants
On January 11, pursuant to Section 731 of the Dodd-Frank Act, the CFTC adopted final regulations which, among other things: (i) establish a registration process for swap dealers and major swap participants; (ii) require swap dealers and major swap participants to be members of a registered futures association; and (iii) subject “Push-Out Affiliates” to the same requirements. CFTC Release. CFTC Final Rule.
CFTC Proposed Regulations on Volcker Rule
On January 11, the CFTC approved proposed rules implementing the requirements of Section 619 of the Dodd-Frank Act, otherwise known as the “Volcker Rule”. The proposed rulemaking is substantively similar to the rulemaking jointly proposed by the Fed, the OCC, the FDIC, and the SEC in October 2011. However, the proposed rulemaking includes fourteen new questions relating to certain matters under the CFTC’s jurisdiction, including the scope of the definition of “commodity pool” which is categorized as a “covered fund”. Comments must be submitted within 60 days after publication in the Federal Register, which deadline will be at least 30 days after the deadline for submitting comments on the joint-agency proposed rulemaking. CFTC Release. CFTC Proposed Rule.
SEC Extension of Comment Period for ABS Conflict Proposal
On December 13, the SEC extended the comment period for proposed Rule 127(b) that, pursuant to Section 621 of the Dodd-Frank Act, would prohibit material conflicts of interest in securitizations. Comments on the proposed rule must now be submitted by January 13, 2012. SEC Release. Proposed Rule.
SEC Amends Net Worth Standard for Accredited Investors
On December 21, pursuant to Section 413(a) of the Dodd-Frank Act, the SEC amended several rules under the Securities Act, the Investment Company Act, and the Investment Advisers Act to exclude the value of an individual’s home from net worth calculations used to determine whether such individual qualifies as an accredited investor. The amendments also: (i) clarify the treatment of loans secured by a primary residence for purposes of this new net worth calculation and (ii) permit individuals who qualified as accredited investors under the prior definition of accredited investor to use the previous net worth standard for certain follow-on investments. The amendments will be effective on February 27. SEC Release. SEC Final Rule.
Fed Proposed Rules on Large Banks and Systemically Important Nonbanks
On December 20, pursuant to Sections 165 and 166 of the Dodd-Frank Act, the Fed proposed rules implementing new requirements for bank holding companies with consolidated assets of $50 billion or more and systemically important nonbank financial firms. The proposed rules address several measures, including: (i) risk-based capital and leverage requirements; (ii) liquidity requirements; (iii) stress tests; (iv) single-counterparty credit limits; and (v) debt-to-equity limits for companies that pose a grave threat to financial stability. Comments must be submitted by March 31. Fed Release.
CFTC Final Rules on Swap Data Recordkeeping and Reporting Requirements
On December 20, pursuant to Sections 727, 728, and 729 of the Dodd-Frank Act, the CFTC adopted final rules establishing swap data recordkeeping and reporting requirements for swap data repositories, derivatives clearing organizations, designated contract markets, swap execution facilities, swap dealers, major swap participants, and swap counterparties that are neither swap dealers nor major swap participants. The final rules will be effective 60 days after issuance. CFTC Fact Sheet. CFTC Final Rules.
CFTC Final Rules on Real-Time Reporting of Swap Transaction Data
On December 20, pursuant to Section 727 of the Dodd-Frank Act, the CFTC adopted final rules to implement a new framework for the real-time public reporting of swap transaction and pricing data for all swap transactions. The final rules will be effective 60 days after publication in the Federal Register. CFTC Fact Sheet. CFTC Final Rules.
CFTC Issues Final Whistleblower Rules Under Dodd-Frank: Incentives and Protections
On August 4, the Commodity Futures Trading Commission issued final rules implementing its whistleblower program under Section 748 of the Dodd-Frank Act. These rules will take effect sixty days after their publication in the Federal Register, scheduled for August 25, and will be found at 17 C.F.R. Part 165. Click here for the complete summary.
Dodd-Frank’s SEC Whistleblower Rules Take Effect
On August 12, 2011, the SEC’s Dodd-Frank whistleblower rules became effective, establishing the procedures for whistleblowers reporting violations to the SEC under section 922 of the Dodd-Frank Act to receive a bounty of between 10 and 30 percent of sanctions the SEC collects in successful actions resulting in sanctions of over $1 million. For a complete summary of the updates, please click here.