On October 12, 2012, the Commodity Futures Trading Commission’s (CFTC) and Securities and Exchange Commission’s (SEC) final rules to further define the term “swap” (among other terms) became effective. The effective date of the final rules triggered the compliance dates for a large number of CFTC requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Recognizing that many market participants are facing uncertainty in how the new rules apply and are currently unable to comply with the new requirements, pending finalized rules, relief or guidance from the CFTC, the CFTC issued a series of no-action relief letters and other guidance late last week. This Legal Alert describes the relief and guidance that the CFTC has issued to date. Additional guidance is expected to be issued in the coming weeks.

Market participants are required to account for all swap transactions entered into after October 12, 2012 in determining whether they are swap dealers or major swap participants. Relief was granted to account for certain pending regulatory actions and to provide certain market participants additional time to transition their current business practices to the new regulatory environment. The CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO) afforded market participants the following guidance and temporary relief with regard to swap dealer and major swap participant status.