CFTC Final Rule: Amendments to Commodity Pool Operator and Commodity Trading Advisor Regulations Resulting from the Dodd-Frank Act

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Gavel.png FINAL RULE: Approved on August 23, 2012.
Dodd-Frank Timeline, Amendments to Commodity Pool Operator Regulation
Proposal Date Final Rule Issue Effective Date
March 3, 2011 September 5, 2012 November 5 2012

On August 23, 2012, the CFTC approved a final rulemaking that amends Part 4 of its regulations to reflect changes made to the CEA by the Dodd-Frank Act. Dodd-Frank redefined the terms “commodity pool” “commodity pool operator” and“commodity trading advisor” to include involvement with swaps activities and transactions. The rule passed by a vote of 5-0. The rule appeared in the Federal Register on September 5, 2012 and became effective on November 5, 2012.

Summary of the Rule[edit]

The proposed rule, which was approved at the CFTC Open Meeting, February 24, 2011, would:

  1. Adopt a definition of the term “commodity interest,” which includes, among other instruments, “A swap asdefined in section 1a(47) of the Act and any Commission regulations implemented thereunder.”
  2. Amend existing disclosure, reporting and recordkeeping requirements applicable to CPOs and CTAs toreflect swap activities and involvement with swap dealers; and
  3. Clarify in the context of certain swap activities and transactions the prohibition against trading advisorsaccepting margin in their own name. <ref>Open Meeting on Twelfth Series of Proposed Rules under the Dodd-Frank Act. CFTC. Retrieved on February 26, 2011.</ref>

The final rule adopts the rule as proposed, except for one exception. The final rulemaking no longer needs to redefine "commodity interest" to include swaps, as it was superseded by an amendment to Regulation 1.3 that includes swaps in the definition of commodity interest in all of its regulations. Thus, a special inclusion in Part 4 was unnecessary.



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