Commodity Futures Trading Commission 

 Office of Public Affairs 

 Three Lafayette Centre 

 1155 21st Street, NW 

 Washington, DC 20581 

 www.cftc.gov

Proposed Rule on Conflicts of Interest for Swap Dealers, Major Swap 

Participants, Futures Commission Merchants, and Introducing Brokers 

The Commodity Futures Trading Commission (Commission) is proposing rules establishing conflicts of interest 

requirements for swap dealers, major swap participants, futures commission merchants, and introducing brokers.

Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) 

Section 731 of the Dodd-Frank Act amends the Commodity Exchange Act (CEA) by inserting a new section 

4s(j)(5), which requires that swap dealers and major swap participants establish appropriate informational partitions 

between persons researching or analyzing the price or market for any commodity or swap and persons whose 

involvement in pricing, trading or clearing activities might potentially bias the judgment or supervision of persons 

engaged in research. Section 731 also requires additional partitions between persons “acting in a role of providing 

clearing activities or making determinations as to accepting clearing customers” from persons involved in pricing, 

trading or clearing activities. 

Section 732 of the Dodd-Frank Act similarly amends section 4d of the CEA by directing futures commission 

merchants and introducing brokers to implement similar informational partitions between those researching or 

analyzing prices or markets for commodities and those involved in trading or clearing activities. 

Influence on Research 

The proposed rules will place restrictions on non-research personnel influencing the content of research reports 

prepared by research analysts employed by a swap dealer, major swap participant, futures commission merchant, or 

introducing broker. Additionally, the rule would prohibit the supervision of research analysts by certain trading and 

clearing personnel. The proposed rules also will prohibit swap dealer, major swap participant, futures commission 

merchant, or introducing broker from considering a research analyst’s contributions to the trading or clearing 

business when setting the research analyst’s compensation.

Prohibition of Promise of Favorable Research 

The proposed rules will prohibit swap dealers, major swap participants, futures commission merchants, and 

introducing brokers from offering favorable research, or threatening to change research, for existing or prospective 

counterparties in exchange for business or compensation. 

Disclosure of Personal Conflicts of Interest 

A futures commission merchant or introducing broker must disclose in research reports and a research analyst must 

disclose in public appearances whether the research analyst maintains a financial interest in any derivative of a type 

that the research analyst follows, and the general nature of the financial interest. 

Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080 
Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080 

Under the proposed rules, swap dealers, major swap participants, futures commission merchants, and introducing 

brokers will be required to disclose whether a research analyst maintains a financial interest in any derivative of a 

type that the research analyst follows, and the general nature of the financial interest. Research analysts must make 

the same disclosure when making public appearances. 

Prohibition on Retaliation 

The proposed rules will prohibit swap dealers, major swap participants, futures commission merchants, and 

introducing brokers from retaliating against any research analyst who produces a research report that may adversely 

impact certain of the firm’s business activities. 

Conflicts of Interest in Clearing Activities 

Under the proposed rules, swap dealers or major swap participants are prohibited from interfering with or 

attempting to influence decisions related to the provision of clearing or the acceptance of clearing customers. Swap 

dealers and major swap participants also must maintain appropriate partitions between business trading personnel 

and the personnel of an affiliated clearing member. Additionally, no futures commission merchant shall permit an 

affiliated swap dealer or major swap participant from interfering with or attempting to influence decisions related to 

the provision of clearing or the acceptance of clearing customers.