Recent CFTC Issuances: CFTC Issues Proposed Rule under the Dodd-Frank Act on Financial Resource Requirements for DCOs and SIDCOs, as well as a Proposed Rule to Mitigate Potential Conflicts of Interest in the Operation of DCOs, DCMs and SEFs and an Interim Final Rule Regarding Reporting of Pre-Enactment Swap TransactionsSullivan & Cromwell LLP - October 8, 2010
On October 1, 2010, the Commodity Futures Trading Commission (CFTC) issued two proposed rules and an interim final rule in connection with its implementation of Title VII of the Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). In the first action, the CFTC proposed financial resource requirements for derivatives clearing organizations (DCOs) and systemically important DCOs (SIDCOs) in accordance with DCO Core Principle B, which has been amended by the Dodd-Frank Act. In a second proposal, the CFTC acted upon the authority granted to it under the Dodd-Frank Act to mitigate conflicts of interest in the operation of DCOs, designated contract markets (DCMs) and swap execution facilities (SEFs) through limits on the ownership of voting equity and the exercise of voting power with respect to such entities, as well as the adoption of other structural governance requirements. Finally, the CFTC issued an interim final rule establishing a reporting requirement for swaps entered into before the date of enactment of the Dodd-Frank Act and which had not expired before such date.