CFTC Approves Final Rule on Cross-Border Applications of Swaps

The Commodity Futures Trading Commission (CFTC) has approved a final rule on the cross-border application of certain swap provisions, the United States regulator announced this week.

In particular, the CFTC approved a final rule on capital requirements for swap dealers and major swap participants, the regulator announced on Thursday. With this development, all required rulemakings under Section 731 of the Commodity Exchange Act have now been closed.

Following a vote, which was three in favour, two against, the Commission has adopted the new rule which addresses registration thresholds and certain requirements for swap dealers and major swap participants.

“The final rule includes a risk-based approach that advances the goals of Title VII of Dodd-Frank’s swap reforms while fostering greater liquidity and competitive markets, promoting enhanced regulatory cooperation, and improving the global harmonization of swap regulation,” the CFTC said in the statement.

According to the US regulator, by approving the final rule, it completes another principal rulemaking implementing the Dodd-Frank Act. The Act, which was implemented in 2010, along with a host of other regulations aimed at protecting retail customers in the financial services industry and massively upped brokers’ capital requirements.

CFTC amends order for EU trading facilities

Furthermore, on Thursday, the US regulator approved an Amendment order regarding European Union trading facilities, exempting 16 extra multilateral trading facilities (MTFs) and organised trading facilities (OTFs) authorised in the EU from the requirement to register as swap execution facilities.

In addition, the CFTC also clarified the application of the existing order to MTFs and OTFs based in the United Kingdom during the Brexit transition period which is set to close at the end of this year.

“Under the existing order, the CFTC allowed the European Commission to request that additional MTFs and OTFs, which satisfy certain legal requirements, be added to the list of MTFs and OTFs that were granted exempt SEF status under the order,” the regulator said in the statement.