CFTC Final Rule: Duties for Swap Dealers and Major Swap Participants

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Gavel.png FINAL RULE: The final rule on SD/MSP duties was approved at CFTC Open Meeting, February 23, 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

At its February 23, 2012 open meeting, the CFTC approved its first set of final internal business conduct standards for swap dealers and major swap participants (SD/MSPs). Among the provisions are rules that establish and govern the duties of SD/MSPs.


Section 731 of the Dodd-Frank Act amended the Commodity Exchange Act by adding certain SD/MSP duties on position limits, risk management, disclosure of information to regulators, the establishment of systems for information monitoring and conflicts of interest, and for the avoidance of anti-competitive actions. A proposed rule on SD/MSP duties was approved at an open meeting November 10, 2010.

Final Rule Summary[edit]

Among the final rule provisions:

  • Risk Management: The final rule written risk management policies and procedures to monitor and manage the risks, including market risk, credit risk, liquidity risk, foreign currency risk, legal risk, operational risk, settlement risk, and all other relevant risks.
  • Position Limits: SD/MSPs will be required to provide training to personnel, monitor and supervise trading, implement an early warning system, and test, document compliance, and audit procedures.
  • Supervision over all activities performed by its partners, members, officers, employees, and agents.
  • Business Continuity and Disaster Recovery in case of emergency disruptions.
  • Availability for Disclosure and Inspection of information required by the commission or prudential regulators.
  • Antitrust and Anticompetitive Considerations: SD/MSPs must adopt policies and procedures to "prohibit action that results in any unreasonable restraint of trade or imposes any material anticompetitive burden" on trading or clearing.

Related Documents: Fact Sheet, Q&A, and Final Rule as it Appeared in the Federal Register[edit]

Note: The documents embedded below include the entire set of internal business conduct standards rules approved at the CFTC Open Meeting, February 23, 2012.



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