Co-authored by Blake J. Brockway.
On April 18, the Commodity Futures Trading Commission unanimously adopted a final rule and an interim final rule regarding commodity options. The Dodd-Frank Wall Street Reform and Consumer Protection Act defines the term “swap” to include commodity options. The final rule revises CFTC regulations to make over-the-counter commodity options subject to the same requirements as other swaps.
The interim final rule provides a “trade option” exemption from certain of the rules relating to swaps, subject to compliance with position limit, large trader reporting, recordkeeping and reporting requirements and applicable antifraud and anti-manipulation rules. Swap dealers and major swap participants will be subject to a more limited set of exemptions, however.
The final rule and interim final rule will become effective 60 days after publication in the Federal Register, but the compliance date for both of those rules will be 60 days after publication of a rule defining the term “swap.”
Click here for the CFTC fact sheet.