CFTC Adopts Internal Business Conduct Rules: CFTC Adopts Final Rules on Swap Dealer Major Swap Participant Recordkeeping and Reporting, Duties, and Conflicts of Interest Policies and Procedures; Futures Commission Merchant and Introducing Broker Conflicts of Interest Policies and Procedures; Swap Dealer, Major Swap Participant and Futures Commission Merchant Chief Compliance OfficerSullivan & Cromwell LLP - March 8, 2012
On February 23, 2012, the Commodity Futures Trading Commission voted to adopt final rules that regulate the internal conduct of futures commission merchants, introducing brokers, swap dealers and major swap participants. These rules impose duties and restrictions on these categories of registered entities concerning internal conflicts of interest and recordkeeping. Swap dealers, major swap participants and futures commission merchants must also designate a chief compliance officer who is charged with establishing and enforcing policies and procedures reasonably designed to ensure compliance with the Commodity Exchange Act and the regulations promulgated thereunder. The four types of registered entities must erect firewalls between clearing personnel and trading business personnel as well as between research personnel and non-research personnel. The final rules relating to recordkeeping require swap dealers and major swap participants to keep sufficient records to show general and trade-specific compliance with the Commodity Exchange Act and its regulations. The Commodity Futures Trading Commission worked closely with commenters and other regulators in drafting these rules.