CFTC Capital and Liquidity Requirements: CFTC Reopens Comment Period on Proposed Rules Implementing Capital and Liquidity Requirements for Swap Dealers and Major Swap ParticipantsSullivan & Cromwell LLP - January 7, 2020
On December 10, 2019, the Commodity Futures Trading Commission held an open meeting at which it voted (3-2, with Commissioners Rostin Behnam and Dan Berkovitz dissenting) to reopen the comment period and request additional comment on its 2016 re-proposed rule that would impose capital and liquidity requirements on swap dealers and major swap participants that are not subject to the capital requirements of a prudential regulator. The release requests comments generally on the prior proposed rule and on a variety of specific topics, including:
- The calibration of minimum capital requirements for swap dealers, including to take into account initial margin associated with derivatives positions;
- The regulatory approval process to use an internal model to calculate swap dealer market risk and credit risk capital charges;
- The application of liquidity requirements to swap dealers; and
- Financial reporting requirements for swap dealers.