CFTC Capital Requirements: CFTC Adopts Final Rule Implementing Capital Requirements for Swap Dealers and Major Swap Participants

Sullivan & Cromwell LLP - September 9, 2020
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On July 22, 2020, the CFTC voted to adopt a final rule that will impose capital requirements on swap dealers and major swap participants that are not subject to the capital requirements of a prudential regulator.  The final rule allows swap dealers to choose from three potential alternative methods to be in compliance with the minimum capital requirements.  The CFTC also adopted financial reporting requirements for Covered Swap Entities and amended existing capital rules for CFTC-registered futures commission merchants to provide explicit capital requirements for proprietary positions in swaps and security-based swaps that are not cleared by a clearing organization, in addition to other amendments to existing CFTC regulations.