CFTC Delays Effective Date for Certain Swap Provisions Under Dodd-Frank Act


On June 14, 2011, the Commodity Futures Trading Commission (“CFTC”) issued a proposed order (“Proposed Order”) that, if adopted, would grant temporary exemptions to certain requirements in Title VII of the Dodd-Frank Act (the “Act”) that otherwise would become effective on July 16, 2011.1

Swap-related requirements under Title VII of the Act, including key amendments to the Commodity Exchange Act (“CEA”), generally become effective on July 16, 2011. However, Section 754 of the Act states that if a provision of Title VII requires implementation by agency rulemaking, such provision shall become effective not less than sixty (60) days after publication of the final rule. Over the past few months, the CFTC has introduced numerous proposed rules that implement the Act’s requirements. However, the CFTC acknowledges that certain rulemakings will not be finalized on or before the quickly-approaching July 16, 2011, effective date.

To address concerns regarding which CEA provisions will (or will not) apply as of July 16, 2011, the CFTC is proposing to grant a temporary extension of the effective date with respect to two categories of self-effectuating CEA regulations that, without such extension, might otherwise apply to market participants as of July 16, 2011: (i) CEA provisions added or amended by Title VII that reference key terms which require further definition; and (ii) Title VII provisions that repeal various exemptions and exclusions set forth in the CEA.

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