The U.S. Commodity Futures Trading Commission (â€śCFTCâ€ť) voted today to define what constitutes a â€śswapâ€ť under the Dodd-Frank Act.Â The CFTCâ€™s commissioners voted 4-1 to approve the definition.
Most notably, the â€śswapâ€ť definition includes such products as forward rate agreements, FX currency options, non-deliverable FX forwards, currency swaps, and cross-currency swaps.
While Dodd-Frank authorizes the Treasury Department to exempt foreign exchange swaps and forwards from clearing and trading requirements, the Treasury Department has yet to finalize the exemption.
The swap definition also includes a number of exemptions for insurance and retail transactions.Â Life, property, and casualty insurance were among those products said to be exempt.Â Interest rate caps on consumer mortgages and home heating oil agreements were also said to be exempt.
Within two months of the definitionâ€™s publication, swap dealers (â€śSDsâ€ť) and major swap participants (â€śMSPsâ€ť) must register themselves as such, and data on
interest-rate and credit swaps must be reported to the public.Â In addition, position limits on speculation in oil, natural gas, wheat and other commodities will also become effective two months after the definitionâ€™s publication.
The definition not only sheds light on what financial products can be expected to fall within regulatory oversight, but also triggers the compliance dates of roughly a dozen new swap rules.
At Shipkevich Law, regulatory compliance and registration with the CFTC and NFA is our specialty. If you have questions about the registration process, or would like our assistance registering as a CPO or CTA, contact us at 212-252-3003 or email@example.com.