Regulatory Developments: CFTC Approves Phased Compliance Proposal for Certain Swap Regulations | White & Case LLP International Law Firm, Global Law Practice
Regulatory Developments: CFTC Approves Phased Compliance Proposal for Certain Swap Regulations

Regulatory Developments: CFTC Approves Phased Compliance Proposal for Certain Swap Regulations

On June 29, the CFTC voted to propose a phased compliance program regarding certain swaps regulations affecting non-U.S. swap dealers, non-U.S. major swap participants, U.S. swap dealers, U.S. major swap participants, and foreign branches of U.S. swap dealers and U.S. major swap participants, subject in each case to specified conditions. Comments may be submitted to the CFTC up to 30 days after the publication in the Federal Register.

The proposed phased compliance would become effective on the compliance date for registration of SDs and MSPs and expire: (1) for non-U.S. swap dealers, non-U.S. major swap participants, foreign branches of U.S. swap dealers, and foreign branches of U.S. major swap participants, 12 months following the publication of the proposal; and (2) for U.S. swap dealers and U.S. major swap participants, January 1, 2013.

During the relevant phased compliance period and subject to specified conditions in the proposal (1) non-U.S. swap dealers, non-U.S. major swap participants, U.S. swap dealers and U.S. major swap participants would be afforded additional time to prepare for the application of the Entity-Level Requirements, and (2) non-U.S. swap dealers, non-U.S. major swap participants, foreign branches of U.S. swap dealers, and foreign branches of U.S. major swap participants would be able to comply only with the regulations as may be required in the home jurisdiction or location of the relevant entity, in respect of Transaction-Level Requirements.

To avail itself of the phased compliance, non-U.S. swap dealers, non-U.S. major swap participants, foreign branches of U.S. swap dealers and foreign branches of U.S. major swap participants would need to:

(1) submit an application to register as a swap dealer or as a major swap participant, as applicable, with the National Futures Association ("NFA"); and

(2) within 60 days of applying for registration, submit to the NFA a compliance plan addressing how it proposes to comply, in good faith, with all applicable requirements under the CEA. At a minimum, such plan would provide, for each Entity-Level and Transaction-Level Requirement, a description of: (1) whether the non-U.S. swap dealer or non-U.S. major swap participant plans to comply with each of the Entity-Level and Transaction-Level Requirements that are in effect at such time or plans to seek a comparability determination and rely on compliance with one or more of the requirements of its home jurisdiction, as applicable; and (2) to the extent that the non-U.S. swap dealer or non-U.S. major swap participant would seek to comply with one or more of the requirement(s) of its home jurisdiction, a description of such requirement(s).

 

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