CFTC Issues Final Rules on Confirmation, Portfolio Reconciliation, Portfolio Compression and Swap Trading Relationship Documentation Requirements for Swap Dealers and Major Swap Participants


On August 27, 2012, the Commodity Futures Trading Commission (the “CFTC”) unanimously approved final rules (the “Final Rules”) that establish requirements for the (i) documenting of swap trading relationships between swap dealers (“SD”) or major swap participants (“MSP”) and their counterparties, (ii) timely and accurate confirmation of swaps and (iii) reconciliation and compression of swap portfolios. The Final Rules also set out the documentation requirements for swaps with respect to which an end-user has elected to avail itself of the exception from mandatory clearing and delay, until January 1, 2013, compliance with certain requirements of the external business conduct rules.1 The Final Rules adopt, with amendments, three separate notices of proposed rulemaking2 (each separate proposed rulemaking is, and the proposed rules collectively are, referred to herein as the “Proposed Rules”) and build upon the Federal Reserve Bank of New York’s efforts to improve back office standards of large financial institutions dealing in swaps. The CFTC perceives swap documentation as a critical aspect of the bilaterally-traded, over-the-counter derivatives market, and swap confirmation, portfolio reconciliation and portfolio compression as important post-trade mechanisms for reducing risk and improving operational efficiency.

The Final Rules do not apply retrospectively to swaps entered into prior to the date upon which compliance with the rules is required. The compliance dates for documentation, confirmation, portfolio compression and portfolio reconciliation are addressed in each relevant section below and in some instances are phased in.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Topics:  CFTC, Derivatives Clearing Organizations, Major Swap Participants, Recordkeeping Requirements, Swap Dealers

Published In: Administrative Agency Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© White & Case LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »


White & Case was founded in New York in 1901 and has grown into one of the world's leading global... View Profile »

Follow White & Case LLP:

Reporters on Deadline