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    CFTC Proposes Rules on Swap Clearing and Capital Requirements for SDs

    December 23, 2019

    CFTC approved two proposed rules under its swaps regime. One of the proposed rules is related to capital requirements for swap dealers, or SDs, and major swap participants while the other proposed rule concerns amendments to the swap clearing requirement exemption for inter-affiliate swaps.

    Capital Requirements for Swap Dealers and Major Swap Participants—CFTC is reopening the comment period and requesting additional comment (including potential modifications to proposed rule language) on proposed regulations and amendments to the existing regulations to implement sections 4s(e) and (f) of the Commodity Exchange Act, as added by section 731 of the Dodd-Frank Act. Section 4s(e) requires the CFTC to adopt capital requirements for swap dealers and major swap participants that are not subject to capital rules of a prudential regulator. Section 4s(f) requires CFTC to adopt financial reporting and recordkeeping requirements for swap dealers and major swap participants. CFTC is reopening the comment period and soliciting further comment on proposed capital and financial reporting rules for swap dealers and major swap participants as well as related proposed amendments to the existing capital rules for futures commission merchants providing specific market risk and credit risk capital deductions for swaps and security-based swaps entered into by the futures commission merchants. Comments on this proposal must be received on or before March 03, 2020.

    Amendments to the Swap Clearing Requirement Exemption for Inter-Affiliate Swaps—CFTC is proposing revisions to the regulation that exempts certain affiliated entities within a corporate group from the swap clearing requirement under the applicable provision of the Commodity Exchange Act. The revisions concern the anti-evasionary condition that swaps subject to the clearing requirement entered into with unaffiliated counterparties either be cleared or be eligible for an exception to or exemption from the clearing requirement. Specifically, the revisions would make permanent certain temporary alternative compliance frameworks intended to make this anti-evasionary condition workable for international corporate groups in the absence of foreign clearing regimes determined to be comparable to U.S. requirements. Comments on this proposal must be received on or before February 21, 2020.


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    Comment Due Date: March 03, 2020/February 21, 2020

    Keywords: Americas, US, Banking, Securities, Capital Requirements, Swap Dealers, Dodd Frank Act, Reporting, Swap Clearing, Commodity Exchange Act, Swaps, Inter-Affiliate Swaps, CFTC

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