Final Rules Regarding Registration of Swap Dealers and Major Swap Participants
Co-authored by Christopher H. Mendoza and Christian B. Hennion.
The Commodity Futures Trading Commission adopted final rules establishing a registration process for SDs and MSPs. Registration requirements will not be mandatory until certain swap definitions are finalized and become effective. Persons who believe that they are SDs or MSPs will be able–but not required–to register before that time. As part of the registration requirements, SDs and MSPs are required to become and remain members of a registered futures association. Push-out affiliates will also be subject to the foregoing requirements. A push-out affiliate is a non-insured depository institution affiliate that is an SD or MSP.
Further, the final rules prohibit any SD or MSP from permitting any person associated with it who is subject to a statutory disqualification to effect or be involved in effecting swaps on its behalf if the SD or MSP knows, or in the exercise of reasonable care should know, of the statutory disqualification. The final rules also provide a limited exception to this prohibition for any person associated with a SD or MSP who has been duly listed as a principal or registered as an associated person of another registrant notwithstanding that such person is subject to a statutory disqualification.
In addition, the final rules provide that a statutory disqualification for purposes of this prohibition refers to a statutory disqualification under § 8a(2) or 8a(3) of the CEA and clarifies that a “person associated with a SD or MSP” for purposes of this prohibition refers to an associated person defined by the final regulations to mean a natural person with respect to a SD or MSP.
The final rules regarding registration of SDs and MSPs will take effect 60 days after publication in the Federal Register. A copy of the final rules may be found here.
