Clifford Chance

CFTC and SEC approve Final Rule and Interpretation for Swap Product Definitions

11 July 2012

At a meeting held on July 10, 2012, the Commodity Futures Trading Commission ("CFTC") voted to issue final rules pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act") further defining the terms "swap", "security-based swap", "mixed swap", and "security-based swap agreement" ("Product Rule"). The Securities and Exchange Commission ("SEC") unanimously approved the Product Rule in a private meeting. Once the Product Rule is published in the Federal Register ("FR"), the timetable will be fixed for compliance with several of the critical rules imposing substantive obligations with respect to swaps. The CFTC also issued a final rule regarding the end-user exemption from the swap clearing requirement ("End-user Rule") and a proposed rule exempting certain swaps entered into between cooperatives and their members from the clearing requirement ("Proposed Cooperative Exemption"). Below is an overview of points discussed during the meeting, based on the fact sheet and Q&A released by the CFTC and the discussions themselves.  This overview is subject to the release of the final text of the Product Rule.

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