major swap participants

CFTC Approves Proposed Amendments to Margin Requirements for Swap Dealers and Major Swap Participants

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On August 14, the Commodity Futures Trading Commission (CFTC) approved two proposed amendments to margin requirements for Swap Dealers and Major Swap Participants (the “CFTC Margin Rule”). The first proposal would, among other changes, revise the method for determining whether an entity comes within the scope of the initial margin requirements under the CFTC Margin Rule and the timing for compliance. The second proposal would permit the application of separate minimum transfer amounts for initial and variation margin, as well as a minimum transfer amount of up to $50,000 for separately managed accounts. Each proposal will be subject to a 30-day comment period following publication in the Federal Register. Release.

CFTC Approves Final Swap Dealer Capital Rule

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On July 22, the Commodity Futures Trading Commission (CFTC) approved a final rule regarding new capital and financial reporting requirements for swap dealers and major swap participants that are not subject to supervision by a banking regulator and imposing financial reporting requirements for swap dealers and major swap participants generally. The final rule provides swap dealers and major swap participants three alternative methods to establish and meet minimum capital requirements depending on the characteristics of their business. The final rule also includes: a comprehensive model approval process; accompanying financial reporting, recordkeeping, and notification requirements; and a substituted compliance determination process for those swap dealers that may already be required to maintain capital in accordance with a foreign regulator. Release.

CFTC Staff Grants Time-Limited Extension of Swap Data Reporting Relief for Certain Swap Dealers and Major Swap Participants Established under the Laws of Australia, Canada, the European Union, Japan or Switzerland

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On November 30, 2017, the U.S. Commodity Futures Trading Commission‘s (“CFTC“) Division of Market Oversight announced in a no-action letter that it had extended relief it provided certain CFTC-registered swap dealers (“SD“) and major swap participants (“MSP“) in November 2016.  The no-action letter states that the Division of Market Oversight “will not recommend that the CFTC take an enforcement action against a non-U.S. SD or a non-U.S. MSP established in Australia, Canada, the European Union, Japan or Switzerland, that is not part of an affiliated group in which the ultimate parent entity is a U.S. SD, U.S. MSP, U.S. bank, U.S. financial holding company, or U.S. bank holding company, for failure to comply with the swap data reporting requirements of Part 45 and Part 46 of the CFTC’s regulations (SDR Reporting Rules), with respect to its swaps with non-U.S. counterparties that are not guaranteed affiliates, or conduit affiliates, of a U.S. person.”  The relief provided in the no-action letter is subject to certain terms and conditions as outlined in the letter, and is time-limited.  The Division of Market Oversight does not currently intend to extend the no-action relief beyond December 1, 2020. Release. No-Action Letter.

CTFC Approves Minimal Capital Requirements for Swap Dealers and Major Swap Participants

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On December 2, 2016, the U.S. Commodity Futures Trading Commission (CFTC) unanimously approved proposed rules that establish minimum capital requirements for swap dealers and major swap participants. The proposed rules set out minimum levels of qualifying capital for swap deals and major swap participants that are not subject to the capital rules of a prudential regulator. The comment period ends 90 days after publication of the proposal in the Federal Register. Release.

CFTC Approves Final Rule Amending the Timing for Filing Chief Compliance Officer Annual Reports by Certain Registrants

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On November 10, 2016, the U.S. Commodity Futures Trading Commission (the “CFTC“) issued a final rule modifying and clarifying previous guidance regarding compliance reports for futures commission merchants, swap dealers and major swap participants. Release.

CFTC Amends Swap Portfolio Reconciliation Requirement

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On May 2, 2016, the U.S. Commodity Futures Trading Commission approved a final rule to amend the swap portfolio reconciliation requirement.  Under CFTC Regulation 23.500(i), swap dealers and major swap participants were required to exchange all terms of swaps with their counterparties as part of the portfolio reconciliation exercise, but were only required to reconcile the material terms of swaps.  Amendments to the definitions of “portfolio reconciliation” and “material terms” now make it so that swap dealers and major swap participants need only exchange the material terms of swaps, so that the terms that are required to be exchanged are the same as those terms required to be reconciled.  Release.

CFTC Announces the Start of Mandatory Clearing

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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

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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

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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.