On January 11 the U.S. Commodity Futures Trading Commission approved final rules establishing a registration process for two types of regulated swap entities—swap dealers and major swap participants—as required under Sections 4s(a) and 4s(b) of the Commodity Exchange Act, which were inserted by the Dodd-Frank Act.
The final rules include a provisional registration process to allow swap entities to engage in regulated swap entity activities before the formal completion of the registration approval process. The final rules also allow phased compliance by swap entities with the other requirements of Section 4s of the CEA, which include rules addressing capital and margin, trade reporting, recordkeeping, business conduct and documentation standards and segregation of uncleared swaps margin. The rules differ slightly from the CFTC’s original proposals.