CFTC Capital and Liquidity Requirements: CFTC Reopens Comment Period on Proposed Rules Implementing Capital and Liquidity Requirements for Swap Dealers and Major Swap Participants

Sullivan & Cromwell LLP - January 7, 2020
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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.
Comments on the release are due on or prior to March 3, 2020.