CFTC Issues Rule Regarding Persons Associated with Multiple Swap Dealers or Major Swap Participants

On April 1, the Commodity Futures Trading Commission issued a final rule clarifying that each swap dealer (SD), major swap participant (MSP) or other CFTC registrant with whom an associated person (AP) is associated is required to supervise the AP and may be held jointly and severally liable for the AP’s activities related to customers that are common to it and any other SD, MSP or CFTC registrant. The final rule is similar to the current requirement that applies to futures commission merchants, retail foreign exchange dealers, introducing brokers, commodity trading advisors, commodity pool operators and leverage transaction merchants with dually registered APs. The supervision and joint and several liability requirements for dual APs apply to SDs and MSPs even though their APs are not required to register with the CFTC.

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Topics:  CFTC, Joint and Several Liability, Major Swap Participants, Swap Dealers

Published In: 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.

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