CFTC and SEC Propose Definitional Tests for Swap Dealers and Major Swap Participants.
Mondaq Business Briefing › Nbr. 2010, January 2010
Linked as:
Summary
United States. Commodity Futures Trading Commission - United States. Securities and Exchange Commission - Securities Exchange Act
See the full content of this document
Extract
CFTC and SEC Propose Definitional Tests for Swap Dealers and Major Swap Participants.
Executive Summary
This Client Advisory summarizes significant aspects of the Proposed Rules issued jointly by the Commodity Futures Trading Commission ("CFTC") and the Securities and Exchange Commission ("SEC") (collectively, the "Commissions") on December 7, 2010, to define the terms "Swap Dealer," "Security-Based Swap Dealer," "Major Swap Participant" and "Major Security-Based Swap Participant"1. As a centerpiece of the new regulatory regime for derivatives, the Dodd-Frank Act (the "Act")2 requires persons that fall within those definitions to register as such with the CFTC and/or the SEC and subjects such persons to extensive regulation, including margin, capital and business conduct requirements. The highlights of the Proposed Rules are as follows: Swap Dealer status has been defined from a functional perspective with the key element being whether an entity tends to accommodate demand. The Major Swap Participant definition is based on objective calculations designed to measure the systemic significance of the swap activity of the relevant entity. The calculations have many variations, but the lowest threshold for designation is $1 billion in "daily average aggregate uncollateralized outward exposure," w...See the full content of this document
Sponsored links
