Derivatives Oversight Under the Financial Reform Legislation
Preparing to Comply With the Sweeping Federal Regulation of the Derivatives Market
The financial reform law includes new oversight of over-the-counter derivatives with regulation by the US Commodity Futures Trading Commission and the SEC. The law regulates swap dealers and major swap participants like banks and large hedge funds and may also impact insurance and finance companies.
Among the new statutory requirements are registration, posting of margins for trades, capital requirements and reporting and recordkeeping requirements. End-user businesses are exempt if their derivative transactions are for hedging and other commercial risk purposes.
The law requires mandatory clearing of swaps on clearinghouses with oversight by the CFTC. There is a narrow exemption for commercial end users that are not financial entities. With some exceptions, banks must now segregate their derivative trading into separately capitalized subsidiaries.
Listen as our authoritative panel of financial services attorneys prepares you for the substantial federal regulatory oversight of the derivatives market.