Business Conduct Standards

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Gavel.png FINAL RULE: CFTC Final Rule: Business Conduct Standards for Swap Dealers and Major Swap Participants with Counterparties at CFTC Open Meeting, January 11, 2012
Gavel.png FINAL RULES from CFTC Open Meeting, February 23, 2012:
Gavel.png FINAL RULE: CFTC Final Rule: Confirmation, Portfolio Reconciliation, Portfolio Compression, and Swap Trading Relationship Documentation Requirements for Swap Dealers and Major Swap Participants issued August 27, 2012.
Dodd-Frank Timeline, Business Conduct Standards for Swap Dealers and Major Swap Participants
Final Rule Issue Effective Date Compliance Date (Extended)
February 17, 2012 April 17, 2012 May 1, 2013
Dodd-Frank Timeline, Business Conduct Standards for Security-Based Swap Dealers and Major Security-Based Swap Participants, SEC
Proposal Date Comment Deadline Reopened Comment Period Deadline
July 18, 2011 August 29, 2011 July 22, 2013
Dodd-Frank Timeline, Swap Trading Relationship Documentation for Swap Dealers and Major Swap Participants
Proposal Date Comment Deadline Final Rule Issue
February 8, 2011 June 3, 2011 August 27, 2012
Dodd-Frank Timeline, Orderly Liquidation Termination Provision in Swap Trading Relationship Documentation
Proposal Date Final Rule Issue Effective Date
February 8, 2011 September 11, 2012 November 13, 2012
Dodd-Frank Timeline, Confirmation, Reconciliation, and Compression, Swap Dealers and Major Swap Participants
Proposal Date Final Rule Issue Effective Date
December 28, 2010 September 11, 2012 November 13, 2012
Dodd-Frank Timeline, Duties for Swap Dealers and Major Swap Participants
Final Rule Issue Effective Date Compliance Date
April 3, 2012 June 4, 2012 October 12, 2012
Dodd-Frank Timeline, Conflicts of Interest for Swap Entities, FCMs, IBs
Final Rule Issue Effective Date Compliance Date
April 3, 2012 August 3, 2012 October 12, 2012
Dodd-Frank Timeline, Required Compliance Policies
Final Rule Issue Effective Date Compliance Date, Non-Covered Firms Compliance Date, Covered Firms
April 3, 2012 June 4, 2012 September 30, 2012 March 31, 2013

Among the provisions of the Dodd-Frank Act are requirements that the CFTC and SEC establish rules and guidelines regarding business conduct standards for swap dealers and major swap participants, futures commission merchants and introducing brokers. Regulators have proposed (and, in some cases, finalized) rules covering both internal and external business conduct standards. Click the links below to learn more about the state of Dodd-Frank rulemakings covering internal and external business conduct.

Under Dodd-Frank, the SEC has jurisdiction over security-based swaps, and the CFTC has jurisdiction over other swaps, except for "mixed swaps" which will be under joint supervision. For more information, visit our Swaps Definitions Regulation page.

External Business Conduct Standards

Business Conduct Standards for Swap Dealers and Major Swap Participants with Counterparties, CFTC

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Business Conduct Standards for Security-Based Swap Dealers and Major Security-Based Swap Participants, SEC

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Internal Business Conduct Standards, CFTC, Round 1, February 2012

Duties for Swap Dealers and Major Swap Participants

The final rule provisions include risk management procedures, supervision and training procedures, business continuity and disaster recovery standards, disclosure to regulators, anti-trust and anti-competitive procedures.

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Conflicts of Interest for Swap Dealers, Major Swap Participants, Futures Commission Merchants, and Introducing Brokers

The final rule is intended to ensure that research and analysis performed by financial firms is free of conflicts of interest by creating a "firewall" between research and other areas of the firm.

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Required Compliance Policies, Designation of Chief Compliance Officer

The final rule sets out the qualifications and duties of the CCO, and the required contents of the annual report that the Chief Compliance Officer (CCO) must file.

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Reporting, Recordkeeping, and Daily Trading Records Requirements

The final rule provides a detailed list of data required to be maintained by swap entities, including transactions and positions, meeting minutes, audit documentation, financial records, complaints and marketing materials.

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Internal Business Conduct Standards, CFTC, Round 2, August 2012

Confirmation, Portfolio Reconciliation, and Portfolio Compression Requirements for Swap Dealers and Major Participants

The final rule includes provisions for the timing of confirmations, frequency of reconciliation, and written policy requirements.

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Swap Trading Relationship Documentation Requirements for Swap Dealers and Major Swap Participants

The final rule details the methods, procedures and required terms for relationship documentation.

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Orderly Liquidation Termination Provision in Swap Trading Relationship Documentation for Swap Dealers and Major Swap Participants

The final rule requires the inclusion of documentation that both parties understand the orderly liquidation procedures.

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References

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