Tag Archives: CFTC

A Corporate End-User’s Handbook for Dodd-Frank Title VII Compliance — The Harvard Law School Forum on Corporate Governance

Hey guys, check this out.  With the complexities involved in implementation of DODD-FRANK Act, we welcome a how-to “guide” .

Excerpt:  The following post comes to us from Geoffrey B. Goldman, partner focusing on derivatives and structured products at Shearman & Sterling LLP. This post is an abridged version of a Shearman & Sterling publication, titled A Corporate End-User’s Handbook for Dodd-Frank Title VII Compliance, available in full (including footnotes) here.

I. Introduction

Almost four years after the financial crisis and over two years after the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), the overhaul of the US derivatives market is rapidly shifting into the implementation phase. Many of the key elements of Dodd-Frank relating to OTC derivatives will begin to take effect on October 12, 2012, although the CFTC has delayed implementation of some requirements until the beginning of 2013.

Read full article and download full report via A Corporate End-User’s Handbook for Dodd-Frank Title VII Compliance — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

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Changes to CFTC Regulations Affecting Private Funds — The Harvard Law School Forum on Corporate Governance and Financial Regulation

Small business of-interest, need-to-know and news-to-watch.

Excerpt:  Who Is Affected?

As a result of recent changes made to the Commodity Exchange Act by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) and new Commodity Futures Trading Commission (the CFTC) rules, private fund sponsors investing in commodity interests need to examine their portfolios and determine whether they are subject to registration with the National Futures Association (NFA) or, if available, claim an exemption from such registration.

Read full article via Changes to CFTC Regulations Affecting Private Funds — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

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CFTC Proposes Clearing Exemption for Inter-Affiliate Swaps — The Harvard Law School Forum on Corporate Governance

Small business of-interest, need-to-know and news-to-watch

Excerpt:  On August 16, 2012, the CFTC proposed rules that would permit affiliated swap counterparties to elect an exemption from mandatory swaps clearing, subject to various conditions. These conditions include reporting, documentation, risk management and other obligations, and, for swaps between financial entities, a requirement to provide variation margin. [1]

The Commodity Exchange Act requires swaps that have been designated by the CFTC as subject to mandatory clearing to be submitted for clearing to a designated clearing organization – unless a counterparty qualifies for an exemption from the clearing requirement. In proposing the inter-affiliate exemption from the clearing requirement, the CFTC recognized the risk management benefits and efficiencies that uncleared inter-affiliate swaps may provide for large financial and other organizations, but also noted its concerns about the “systemic risk repercussions” of uncleared inter-affiliate swaps. These concerns are reflected in the proposed conditions that would apply to affiliated counterparties seeking to rely on the exemption.

The CFTC’s proposed requirements for the use of the exemption are highly controversial

Read full article via CFTC Proposes Clearing Exemption for Inter-Affiliate Swaps — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

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Derivatives Rules under the Dodd-Frank Act Affecting End-Users — The Harvard Law School Forum on Corporate Governance

Small business of-interest and need-to-know.

Excerpt: Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provides for new Federal regulation of the swaps market, and, when fully implemented, is expected to make fundamental changes in the way the swaps market operates. Title VII seeks to reduce systemic risk, increase transparency and improve efficiency in the swaps market by requiring centralized clearing and exchange trading of swaps as well as real-time and regulatory reporting of swap transactions. Under the Dodd-Frank Act, the Commodity Futures Trading Commission (the “CFTC”) will regulate most swaps on interest rates, commodities and currencies and the Securities and Exchange Commission (the “SEC,” together with the CFTC, the “Commissions”) will regulate swaps, including equity and credit default swaps, on single securities and narrow-based securities indices. The term “swap” is defined broadly in the Dodd-Frank Act, and includes certain foreign exchange transactions, such as non-deliverable foreign currency forwards, that may not be characterized as swaps for other purposes.

Read full article via Derivatives Rules under the Dodd-Frank Act Affecting End-Users — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

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