Federal Register: Process for Review of Swaps for Mandatory Clearing

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Gavel.png FINAL RULE: This page refers to the proposed rulemaking on the review process for swaps for mandatory clearing. The CFTC final rule was issued at its July 19 open meeting. Comment letters pertaining the proposed rulemaking can be found here.
Dodd-Frank Timeline, Process for Review of Swaps for Mandatory Clearing
Final Rule Issue Effective Date Compliance Date
November 2, 2010 September 26, 2011 September 26, 2011

The Proposed Rule[edit]

On October 26, 2010, the Commodity Futures Trading Commission (CFTC) held its third in the series of open meetings to consider the issuance of proposed rulemakings under the Dodd-Frank Act. One of the agenda items was a proposed rule regarding the prohibition of market manipulation.<ref>Open Meeting on Third Series of Proposed Rules under the Dodd-Frank Act. CFTC. Retrieved on March 3, 2011.</ref>

Under the proposal, derivatives clearing organizations (DCOs) would be presumed to be eligible for clearing any swap that is "within a group, category, type, or class of swaps that the DCO already clears." In order to receive eligibility, the DCO must:

  • file a written request to the Commission;
  • prove its ability to maintain compliance with DCO core principles;
  • maintain sufficient financial reserves;
  • manage risks associated with the clearing of the swap.

The proposal also sets out the procedure for submission of swaps to the Commission, as well as the review process for a counterparty to a swap transaction seeking a stay of the mandatory clearing requirement.

Related Documents: Fact Sheet, Q&A, and Rule Proposal as it Appeared in the Federal Register November 2, 2010[edit]



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