CFTC and SEC Publish Key Swap Product Definition Rules under Dodd-Frank, Starting a Countdown to Compliance
The SEC and CFTC recently published joint final rules and interpretive guidance further defining the terms “swap,” “security-based swap,” “mixed swap,” and “security-based swap agreement” pursuant to the Dodd-Frank Act. These terms determine which derivative products will be subject to many of the new derivatives regulations under Dodd-Frank, such as reporting and recordkeeping, mandatory clearing and trade execution, collateral segregation and margin requirements, and registration of entities subject to heightened regulation such as swap dealers and major swap participants. The publication of these product definition rules in the Federal Register also starts a countdown to the compliance dates of many of these new derivatives regulations. Parties transacting in derivatives will need to be aware of fast-approaching deadlines for new compliance responsibilities.