CFTC Open Meeting, November 19, 2010

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Dodd-Frank Timeline, Protection of Cleared Swaps Customers Before And After Commodity Broker Bankruptcies
Proposal Date Comment Deadline Final Rule Issue
December 2, 2010 June 3, 2011 First Qtr. 2012
Dodd-Frank Timeline, Real Time Public Reporting of Swap Transaction and Pricing Data
Final Rule Issue Effective Date Compliance Date
December 20, 2011 March 9, 2012 December 31, 2012
Dodd-Frank Timeline, Registration and Regulation of Swap Data Repositories
Proposal Date Final Rule Issue Effective Date*
December 23, 2010 September 1, 2011 October 31, 2011
Dodd-Frank Timeline, Protection of Collateral of Counterparties to Uncleared Swaps
Proposal Date Final Rule Issue Effective Date
December 3, 2010 November 6, 2013 January 6, 2014

On November 19, 2010, the Commodity Futures Trading Commission (CFTC) held the fifth in its series of open meeting to consider issuance of proposed rulemakings under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Rule proposals considered at the meeting:[1]

  • Protections of collateral of counterparties to uncleared swaps before and after commodity broker bankruptcies;
  • An advanced notice of proposed rulemaking regarding protections of collateral for uncleared swaps customers before and after commodity broker bankruptcies.
  • Requirements and duties of swap data repositories;
  • Real time public reporting requirements of swaps transactions; and
  • Recordkeeping and reporting requirements for swaps entities.

Archived webcast:


Meeting Summary

The first discussion centered around the separation of cleared versus uncleared swaps with regard to protection of collateral. The "cleared swaps" proposal passed 5-0. The "uncleared swaps' protection proposal, which addresses the margining and segregation of funds at futures commission merchants (FCMs,had become an advance notice of proposed rulemaking (ANPRM). The ANPRM passed 5-0, with commissioners Sommers and O'Malia expressing concerns about the ANPRM approach. The swap data repository proposal passed 5-0. The Swap Data Recordkeeping proposalpassed 3-2, with Commissioners O'Malia and Sommers voting against, citing vagueness of certain language, such as "real-time reporting, and with regard to block trades and transparency. Some statutory language was changed subsequent to the meeting, the language of which was sent as a separate Federal Register document (Federal Register: Real-Time Public Reporting of Swap Transaction Data Correction).

Related Documents

Protection of Cleared Swaps Customers Before And After Commodity Broker Bankruptcies

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Read proposed rule.png

Real Time Public Reporting of Swap Transaction and Pricing Data

Read comment letters.png
Read proposed rule.png

Registration and Regulation of Swap Data Repositories

Read comment letters.png
Read proposed rule.png

Swap Data Recordkeeping & Recording

Read comment letters.png
Read proposed rule.png

Protection of Collateral of Counterparties to Uncleared Swaps

Read comment letters.png
Read proposed rule.png

Speakers at the Meeting

Chairman Gary Gensler; whose statements include:

  • Support for the advance notice of proposed rulemaking concerning protection of collateral of customers entering into cleared swaps.
  • Support for the proposed rulemaking concerning protection of collateral of counterparties to uncleared swaps.
  • Support for the proposed rulemaking to implement a real-time public reporting regime for swaps.
  • Support for the proposed rulemaking to establish registration requirements and regulations of swap data repositories.
  • Support for the proposed rulemaking to establish swap data recordkeeping and reporting requirements for registered entities and counterparties involved in swaps.

Commissioner Scott D. O’Malia; whose statements include:

  • His concern that doing the commission is not doing best thing by mandating a 15-minute time limit to report block trades and large notional swap trades between dealers and end users, while providing little to no direction on the reporting of all remaining trades.
  • A second concern that the proposed real-time reporting rule is that it fails to take into account the Dodd-Frank Act’s statutory mandate to consider whether reporting may materially reduce market liquidity.
  • Thoughts on the data recordkeeping rulemaking proposal, regarding its complexity, the uncertainty of how the rule will "play out" in the market, and concern that enforcement will require substantial infrastructure investments by the commission.
  • A suggestion that the commission should consider reorganizing to create an office of market data collection and analysis.
  • Concerns about the impact different proposals may have on the risk management practices of futures commission merchants (“FCMs”) that handle swaps under the new regime.

Commissioner Bart Chilton; whose statements include:

  • His opinion that there is a singularity of purpose when it comes to implementation of the Wall Street Reform and Consumer Protection Act, and that is: do what Congress told the commission to do, and that the commission shouldn't veer from that purpose in any way.
  • A call for continued input from the public and other stakeholders.

Commissioner Michael V. Dunn; whose statements include:

  • The ambitious deadlines call for the commission to complete almost every rule Dodd-Frank requires by July 15, 2011. However, the rest of the world is not working at this pace.
  • The effective implementation of the proposals set forth by the CFTC will require substantial investment in new technology and human resources.

Commissioner Jill Sommers, whose statements include:

  • Concern that, as the commission progresses through rule proposal and comment period phases to final rule phase, the process may be "unsustainable" due to the statutory deadlines imposed.

References

  1. Open Meeting on Fifth Series of Proposed Rules under the Dodd-Frank Act. CFTC. Retrieved on March 10, 2011.

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