CFTC Open Meeting, December 9, 2010

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Dodd-Frank Timeline, End-user Exception to Mandatory Clearing of Swaps, CFTC
Final Rule Issue Effective Date Compliance Date
July 19, 2012 September 17, 2012 April 10, 2013
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, DCO,DCM, SEF Governance Standards, Additional Requirements
Proposal Date Comment Deadline Final Rule Issue
January 6, 2011 June 3, 2011 TBA; 2013
Dodd-Frank Timeline, Interim Final Rule - Post-enactment Swap Reporting and Recordkeeping
Proposal Date Effective Date Comment Deadline
December 17, 2010 December 17, 2010 January 18, 2011

The Commodity Futures Trading Commission (CFTC) held a public meeting on Thursday, December 9, 2010, at 9:30 a.m. to consider the issuance of proposed rulemakings under the Dodd-Frank Wall Street Reform and Consumer Protection Act on the following topics:[1]

  • Core principles and other requirements for swap execution facilities;
  • End-user exception to mandatory clearing of swaps;
  • Business conduct standards with counterparties; and
  • Governance requirements for derivatives clearing organizations, designated contract markets and swap execution facilities, and additional requirements regarding the mitigation of conflicts of interest.

In addition to these proposed rules, the Commission considered the issuance of an interim final rule for reporting certain post-enactment swap transactions.

Archived webcast:

Update: Subsequent to the press release, the commission tabled the discussion of core principles and other requirements for swap execution facilities until the following meeting, CFTC Open Meeting, December 16, 2010.

Meeting Summary

Related Documents

Business Conduct Standards for Swap Dealers and Major Swap Participants:

Read comment letters.png
Read proposed rule.png

End-user Exception to Mandatory Clearing of Swaps

Read comment letters.png
Read proposed rule.png

DCO,DCM, SEF Governance Standards

Read comment letters.png
Read proposed rule.png

Interim Final Rule Regarding Post-enactment Swap Reporting

Read comment letters.png
Read final rule.png

Speakers

Chairman Gary Gensler; whose statements include:

  • Governance proposal complements the earlier proposals regarding conflicts of interests, and "enhances the integrity of trading and clearing activities.
  • Regarding end-user exemption, Gensler cites Congress' decision to allow non-financial entities hedging or mitigating commercial risk should have a choice whether to use or report to a central clearing house. Speculators will not qualify.
  • The external business standards proposal will "establish and enforce robust sales practices in the swap markets","prohibit fraud","level the playing field", and "protect customers."
  • The interim rule is designed to bridge the transition period between the present time and to such time as all of the regulations are in place.

Commissioner Michael V. Dunn, whose statements included:

  • Regarding the business conduct standards: "An inherent conflict of interest exists when a swap dealer acts as both an advisor and counterparty to its customers. The business conduct standards proposed today provide meaningful protections to counterparties, and I support them, but I believe more can be done."

Commissioner Scott O’Malia; whose statements include:

  • Reservations about supporting the SEF proposal (which was ultimately tabled until the CFTC Open Meeting, December 16, 2010, citing, "To limit swap trading to a traditional central limit order book-type exchange may be unnecessary to mitigate systemic risk, protect the public interest, and may, in fact, inappropriately burden commerce."
  • Supports the end-user proposal, but questions why it does not fully address the issue of small banks and credit unions' exclusion from the definition of "financial entity."

Commissioner Jill Sommers, whose statements included

  • Concern about the SEF proposal having defined SEFs "too narrowly." (Gensler reminded Sommers that, as the commission has tabled the proposal for one week, changes to the definition may be made).

Commissioner Bart Chilton, whose statement included

  • Offered a preview of his upcoming "position points" proposal. Chilton cited studies that linked commodity price jumps in 2007-2008 to large speculative positions.

References

  1. Open Meeting on Seventh Series of Proposed Rules under the Dodd-Frank Act. CFTC. Retrieved on February 21, 2011.

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