CFTC Proposed Rule: Amendments to Adapt CFTC Regulations to the Dodd-Frank Act

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Gavel.png FINAL RULE: This page refers to the proposed amendments to adapt CFTC regulations to the Dodd-Frank Act. A final rule on the allocation of bunched orders was approved at the CFTC Open Meeting, March 20, 2012. Final rules on additional amendments were approved via seriatim on October 16, 2012.
Dodd-Frank Timeline, Amendments to Adapt Certain CFTC Regulations to the Dodd-Frank Act
Final Rule Issue, Bunched Orders Final Rule Issue, Adaptations Final Rule Issue, Recording of Transactions
April 9, 2012 October 16, 2012 January 2, 2013

At its April 27, 2011 open meeting, the Commodity Futures Trading Commission (CFTC) approved a rule proposal to make several changes to its regulations in order to comply with Dodd-Frank mandates.[1]

Background

One of the provisions in Title VII of the Dodd-Frank Act adds swaps to the list of financial instruments allowed to be traded by Futures Commission Merchants (FCMs) and Introducing Brokers (IBs) on behalf of customers. The act requires that the CFTC modify its regulations accordingly.

The Proposal

Specifically, the proposal seeks to change:

  • Regulations 1.31, 1.33, and 1.35, such that FCMs' and IBs' recordkeeping and reporting requirements for swap transactions are the same as those of futures contracts traded or brokered by the entities. The major requirements would also mirror those in an earlier proposal pertaining to the reporting and recordkeeping requirements of swap dealers and major swap participants;
  • Regulation 1.35 to include a provision requiring futures commission merchants and introducing brokers to maintain records of all communication leading to a swap transaction;
  • Regulation 1.35 to include swap execution facilities, and to allow FCMs and IBs to serve as eligible account managers for bunched orders provided that they do not bunch proprietary orders with customer orders; and
  • the specific wording of several regulations to include swaps, swap execution facilities, and swap data repositories, and to amend the definitions of commodity interest, customer, customer funds, net deficit, net equity, and open contracts so that they pertain to swaps in addition to futures.

Related Documents:Fact Sheet, Q&A, Federal Register Entry, and "Redlined" Document

References

  1. Open Meeting on Fourteenth Series of Proposed Rules under the Dodd-Frank Act. CFTC. Retrieved on April 28, 2011.

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