Source: http://www.jdsupra.com/legalnews/cftc-grants-substituted-swaps-compliance-17482/
Timestamp: 2015-04-27 18:55:59
Document Index: 648896457

Matched Legal Cases: ['arts 45', 'art 23', 'art 45', 'art 43', 'art 45', 'art 43', 'art 45', 'art 43', 'art 45', 'art 20', 'art 50', 'art 43', 'art 50', 'art 43', 'art 43']

CFTC Grants Substituted Swaps Compliance for Six Foreign Jurisdictions | Skadden, Arps, Slate, Meagher & Flom LLP - JDSupra
Maureen A. Donley, Theodore M. Kneller, Daniel S. Konar II, Mark D. Young | Skadden, Arps, Slate, Meagher & Flom LLP
less- Explore: CFTC Compliance Dodd-Frank Exemptive Orders Foreign Jurisdictions Swaps Tweet Send
In 2013, the Commodity Futures Trading Commission (CFTC) adopted final guidance describing the circumstances in which the Dodd-Frank Act requirements will apply to cross-border swap activities (Guidance). In conjunction with the Guidance, the CFTC issued an interim exemptive order phasing in the implementation of its Guidance (Exemptive Order). Since then, the CFTC has taken various other actions on cross-border swap activities that have resulted in a complicated mosaic of compliance obligations. Attached to this client alert are four tables showing the current compliance status of the CFTC’s swap regulations for cross-border swaps activities.
Delayed and Substituted Compliance -
The Exemptive Order delayed compliance with certain CFTC swap rules for non U.S. swap dealers (non-U.S. SDs), non-U.S. major swap participants (non-U.S. MSPs) and foreign branches of U.S. banks that are SD/MSPs (Foreign Branches) established in six jurisdictions: Australia (AU), Canada (CA), the European Union (EU), Japan (JP), Hong Kong (HK) and Switzerland (CH) (collectively the Six Jurisdictions)...
Download PDF In 2013, the Commodity Futures Trading Commission (CFTC) adopted final guidance describing the circumstances in which the Dodd-Frank Act requirements will apply to cross-border swap activities (Guidance).1 In conjunction with the Guidance, the CFTC issued an interim exemptive order phasing in the implementation of its Guidance (Exemptive Order).2 Since then, the CFTC has taken various other actions on cross-border swap activities that have resulted in a complicated mosaic of compliance obligations. Attached to this client alert are four tables showing the current compliance status of the CFTC’s swap regulations for cross-border swaps activities. Delayed and Substituted Compliance The Exemptive Order delayed compliance with certain CFTC swap rules for non-U.S. swap dealers (non-U.S. SDs), non-U.S. major swap participants (non-U.S. MSPs) and foreign branches of U.S. banks that are SD/MSPs (Foreign Branches) established in six jurisdictions: Australia (AU), Canada (CA), the European Union (EU), Japan (JP), Hong Kong (HK) and Switzerland (CH) (collectively the Six Jurisdictions). You can find Skadden’s analysis of the CFTC’s Guidance and Exemptive Order here.3 The Exemptive Order also permitted non-U.S. SD/MSPs and Foreign Branches to comply with local rules, if any, while the CFTC assessed whether the rules in each of the Six Jurisdictions were “comparable to and as comprehensive as” CFTC rules. If the rules were found to be comparable and comprehensive, the CFTC would permit “substituted compliance” with the home jurisdiction’s rules in lieu of CFTC rules. On December 21, 2013, the Exemptive Order expired. In the following days, the CFTC issued a series of substituted compliance determinations and related staff no-action letters. In general, the CFTC granted substituted compliance to non-U.S. SD/MSPs and Foreign Branches established in each of the Six Jurisdictions, but only for several of the CFTC’s internal business conduct standards.4 The CFTC did not make substituted compliance determinations for many other key CFTC regulations that affect SD/MSPs and non-SD/MSPs (e.g., small banks, funds, and commercial end-users) including: mandatory swap clearing, mandatory swap trade execution, real-time swap reporting, regulatory swap reporting and swap recordkeeping requirements. The result of this is a confused set of compliance obligations that vary depending on the status of the parties, whether such rules are eligible for a substituted compliance determination and whether CFTC staff has issued any relevant no-action letters or advisories. Request for Comment on Staff Advisory On January 3, 2014, the CFTC also issued a Request for Comment5 on a CFTC Staff Advisory from November 2013.6 The Staff Advisory stated that the Guidance requires a non-U.S. SD to comply with particular CFTC regulations when it enters into a swap with a non-U.S. counterparty if the swap is arranged, negotiated or executed by personnel or agents of the non-U.S. SD located in the U.S. Comments are due by March 10, 2014. If you have any questions regarding the matters discussed in this memorandum, please contact the following attorneys or call your regular Skadden contact. Mark D. Young Washington, D.C. 202.371.7680 mark.d.young@skadden.com Maureen A. Donley Washington, D.C. 202.371.7570 maureen.donley@skadden.com Daniel S. Konar II Chicago 312.407.0509 daniel.konar@skadden.com Theodore M. Kneller Washington, D.C. 202.371.7264 ted.kneller@skadden.com * * * This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws. WWW.SKADDEN.COM January 13, 2014 B e i j i n g • B o s t o n • B r u s s e l s • C H I C A GO • F r a n k f u r t • H o n g K o n g • H o u s t o n • L o n d o n • L o s A n g e l e s • M o s c o w • M UNI C H • N e w Yo r k pa l o a lt o • Pa r i s • SÃo pa u l o • Sha n g ha i • SING A PORE • Sy d n e y • T o k yo • T o r o n t o • wa s h i n g t o n , D . C . • W i l m i n g t o n Skadden Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates CFTC Grants Substituted Swaps Compliance for Six Foreign Jurisdictions Four Times Square, New York, NY 10036 Telephone: 212.735.30002 Pending Litigation Three industry associations recently challenged the validity of the CFTC’s Guidance in federal district court. The suit alleges that the CFTC did not properly adopt the Guidance pursuant to the requirements of the Commodity Exchange Act and Administrative Procedure Act, and the complaint requests broad relief, including that the Guidance be vacated.7 The outcome of the suit may have a material impact on any compliance obligations identified in the Guidance. Cross-Border Compliance Tables The tables on Page 4 set out the current compliance status of CFTC swap rules based on the CFTC’s substituted compliance determinations to date, the Staff Advisory and relevant staff no-action letters. The Guidance categorizes each of the substantive rule requirements (e.g., mandatory clearing) into two subsets: Entity-Level Requirements and Transaction-Level Requirements. The chart below describes which Entity-Level Requirements or Transaction-Level Requirements only apply to SD/MSPs or apply to any person that is a swap market participant. Entity-Level Requirements Transaction-Level Requirements Applicable to Any PersonSwap Data Repository (SDR) Reporting Mandatory Clearing Historical Swap Reporting Mandatory Trade-Execution Swap Recordkeeping (Parts 45 & 46) Real-Time Reporting Large Trader Reporting For Physical Commodity Swaps Applicable Only to SD/MSPsCapital Adequacy Daily Trading Records Chief Compliance Officer Trade Confirmation Risk Management Portfolio Reconciliation and Compression Swap Recordkeeping (Part 23) Swap Trade Relationship Documentation End-User Exception Documentation External Business Conduct Standards Margin and Segregation Each table specifies the kinds of swap counterparties that are relevant when determining the current compliance status for that particular category of rulemakings, following the kinds of counterparties considered by the CFTC in its Guidance.8 The tables identify the current status of CFTC relief either by: (1) “substituted compliance” with home jurisdiction rules (in lieu of compliance with CFTC rules); (2) “no-action relief” where CFTC staff has issued no action letters that further delay compliance with the identified Entity-Level or Transaction-Level requirements; or (3) “not applicable” where according to the Guidance the entity does not have to comply, or the swap between the relevant parties does not trigger compliance, with a specific requirement. 3 Since substituted compliance is not available to U.S. persons for Entity-Level Requirements, and substituted compliance with Transaction-Level Requirements is not available for swaps entered into with at least one U.S. person (other than a Foreign Branch), these circumstances are not addressed in the tables. Keep in mind that, except where it is noted in the table as “Not Yet In Effect,” U.S. persons already are required to comply with Entity-Level Requirements and compliance with Transaction-Level Requirements is required already for swaps entered into with at least one U.S. person (other than a Foreign Branch). As we progress into 2014, we expect additional developments related to the CFTC’s cross-border application of its rules. We will provide further updates as additional information becomes available. ___________________ END NOTES 1 Interpretive Guidance and Policy Statement Regarding Compliance With Certain Swap Regulations, 78 Fed. Reg. 45292 (July 26, 2013). 2 Exemptive Order Regarding Compliance With Certain Swap Regulations, 78 Fed. Reg. 43785 (July 22, 2013). 3 Skadden Client Alert: CFTC Issues Final Guidance and Accompanying Exemptive Order on Cross-Border Application of Certain Swap Regulations (July 31, 2013), available at http://www.skadden.com/sites/default/files/publications/CFTC_Issues_Final_Cross_Border_Guidance_and_Accompanying_Exemptive_Order.pdf. 4 See Table: Entity-Level Requirements Applicable to SD/MSPs. 5 Request for Comment on Application of Commission Regulations to Swaps Between Non-U.S. Swap Dealers and Non-U.S. Counterparties Involving Personnel or Agents of the Non-U.S. Swap Dealers Located in the United States, 79 Fed. Reg. 1347 (Jan. 8, 2014). 6 CFTC Staff Advisory No. 13-69 (Nov. 14, 2013), available at http://www.cftc.gov/PressRoom/PressReleases/pr6771-13. 7 Securities Industry and Financial Markets Association et al. v. CFTC, 1:13-cv-01916-ESH (D.D.C. Dec. 4, 2013). 8 For a description of the categories of counterparties, such as a U.S. person, conduit affiliate or guaranteed affiliate, as well as other terms used in this client alert and the tables on the following pages, see the Skadden Client Alert on CFTC Cross-Border Guidance.Non-U.S. SD/MSP (Ultimate parent is not a U.S. SD, U.S. MSP, U.S. bank, U.S. financial holding company, or U.S. bank holding company) Non-U.S. SD/MSP (Ultimate parent is a U.S. SD, U.S. MSP, U.S. bank, U.S. financial holding company, or U.S. bank holding company) U.S. Person Foreign Branch of U.S. Bank that is an SD/MSP Non-U.S. Person that is a Guaranteed Affiliate of a U.S. Person No-Action relief delays compliance until March 3, 2014 (no relief for HK). Compliance required as of October 9th, 2013.† Compliance required as of October 9th, 2013. Not Applicable Non-U.S. Person that is a Conduit Affiliate of a U.S. Person No-Action relief delays compliance until March 3, 2014 (no relief for HK). Compliance required as of October 9th, 2013.† Compliance required as of October 9th, 2013.† Not Applicable Non-U.S. Person that is Not a Guaranteed or Conduit Affiliate of a U.S. Person No-Action relief delays compliance until the earlier of December 1, 2014 or 30 days after a substituted compliance determination (no relief for HK). Not Applicable Not Applicable Not Applicable Compliance required as of relevant compliance date for U.S. persons. Substituted Compliance Determinations: Entity-Level Requirements Applicable to Any Person SDR Reporting Part 45 Compliance required as of relevant compliance date for U.S. persons Foreign Branch of a U.S. Bank Non-U.S. SD/MSP Non-SD/MSP, Non-U.S. Person that is a Conduit Affiliate Non-SD/MSP, Non-U.S. Person that is a Guaranteed Affiliate Non-SD/MSP, Non-U.S. person (not a Conduit Affiliate or Guaranteed Affiliate) Compliance required as of relevant compliance date for U.S. persons Compliance required as of relevant compliance date for U.S. persons Compliance required as of relevant compliance date for U.S. persons † If the swap is of a type or class subject to the CFTC's clearing mandate and at least one of the parties has elected the Inter-Affiliate Clearing Exemption (Rule 50.52) for another transaction, then the swap is subject to, and only subject to, the conditions of Rule 50.52 (e.g., clearing) and CFTC Real-Time Reporting requirements (Part 43). However, the language in the Federal Register notice could be read to support a different result. See 77 Fed. Reg. 45292, 45359.Non-U.S. SD/MSP (Ultimate parent is not a U.S. SD, U.S. MSP, U.S. bank, U.S. financial holding company, or U.S. bank holding company) Non-U.S. SD/MSP (Ultimate parent is a U.S. SD, U.S. MSP, U.S. bank, U.S. financial holding company, or U.S. bank holding company) Substituted Compliance Determinations: Entity-Level Requirements Applicable to Any Person SDR Reporting Part 45 Foreign Branch of a U.S. Bank Non-U.S. SD/MSP Non-SD/MSP, Non-U.S. Person that is a Conduit Affiliate Non-SD/MSP, Non-U.S. Person that is a Guaranteed Affiliate Non-SD/MSP, Non-U.S. person (not a Conduit Affiliate or Guaranteed Affiliate) U.S. Person Foreign Branch of U.S. Bank that is an SD/MSP Non-U.S. Person that is a Guaranteed Affiliate of a U.S. Person No-Action relief delays compliance until April 2, 2014 (no relief for HK). Compliance required as of October 9th, 2013.† Compliance required as of October 9th, 2013. Not Applicable Non-U.S. Person that is a Conduit Affiliate of a U.S. Person No-Action relief delays compliance until April 2, 2014 (no relief for HK). Compliance required as of October 9th, 2013.† Compliance required as of October 9th, 2013.† Not Applicable Non-U.S. Person that is Not a Guaranteed or Conduit Affiliate of a U.S. Person No-Action relief delays compliance until the earlier of December 1, 2014 or 30 days after a substituted compliance determination (no relief for HK). Not Applicable Not Applicable Not Applicable Compliance required as of relevant compliance date for U.S. persons. Historical Swap Reporting 46 Compliance required as of relevant compliance date for U.S. persons Compliance required as of relevant compliance date for U.S. persons Compliance required as of relevant compliance date for U.S. persons Compliance required as of relevant compliance date for U.S. persons † If the swap is of a type or class subject to the CFTC's clearing mandate and at least one of the parties has elected the Inter-Affiliate Clearing Exemption (Rule 50.52) for another transaction, then the swap is subject to, and only subject to, the conditions of Rule 50.52 (e.g., clearing) and CFTC Real-Time Reporting requirements (Part 43). However, the language in the Federal Register notice could be read to support a different result. See 77 Fed. Reg. 45292, 45359.Non-U.S. SD/MSP (Ultimate parent is not a U.S. SD, U.S. MSP, U.S. bank, U.S. financial holding company, or U.S. bank holding company) Non-U.S. SD/MSP (Ultimate parent is a U.S. SD, U.S. MSP, U.S. bank, U.S. financial holding company, or U.S. bank holding company) Substituted Compliance Determinations: Entity-Level Requirements Applicable to Any Person SDR Reporting Part 45 Foreign Branch of a U.S. Bank Non-U.S. SD/MSP Non-SD/MSP, Non-U.S. Person that is a Conduit Affiliate Non-SD/MSP, Non-U.S. Person that is a Guaranteed Affiliate Non-SD/MSP, Non-U.S. person (not a Conduit Affiliate or Guaranteed Affiliate) U.S. Person Foreign Branch of U.S. Bank that is an SD/MSP Non-U.S. Person that is a Guaranteed Affiliate of a U.S. Person Compliance Required as of December 21, 2013 Compliance required as of October 9th, 2013.† Compliance required as of October 9th, 2013. Not Applicable Non-U.S. Person that is a Conduit Affiliate of a U.S. Person Compliance Required as of December 21, 2013 Compliance required as of October 9th, 2013.† Compliance required as of October 9th, 2013.† Not Applicable Non-U.S. Person that is Not a Guaranteed or Conduit Affiliate of a U.S. Person Compliance Required as of December 21, 2013 Not Applicable Not Applicable Not Applicable Compliance required as of relevant compliance date for U.S. persons. Swap Recordkeeping 45.2, 45.6, 46.2, 46.4 Compliance required as of relevant compliance date for U.S. persons Compliance required as of relevant compliance date for U.S. persons Compliance required as of relevant compliance date for U.S. persons Compliance required as of relevant compliance date for U.S. persons † If the swap is of a type or class subject to the CFTC's clearing mandate and at least one of the parties has elected the Inter-Affiliate Clearing Exemption (Rule 50.52) for another transaction, then the swap is subject to, and only subject to, the conditions of Rule 50.52 (e.g., clearing) and CFTC Real-Time Reporting requirements (Part 43). However, the language in the Federal Register notice could be read to support a different result. See 77 Fed. Reg. 45292, 45359.Non-U.S. SD/MSP (Ultimate parent is not a U.S. SD, U.S. MSP, U.S. bank, U.S. financial holding company, or U.S. bank holding company) Non-U.S. SD/MSP (Ultimate parent is a U.S. SD, U.S. MSP, U.S. bank, U.S. financial holding company, or U.S. bank holding company) Substituted Compliance Determinations: Entity-Level Requirements Applicable to Any Person SDR Reporting Part 45 Foreign Branch of a U.S. Bank Non-U.S. SD/MSP Non-SD/MSP, Non-U.S. Person that is a Conduit Affiliate Non-SD/MSP, Non-U.S. Person that is a Guaranteed Affiliate Non-SD/MSP, Non-U.S. person (not a Conduit Affiliate or Guaranteed Affiliate) U.S. Person Foreign Branch of U.S. Bank that is an SD/MSP Compliance Required as of July 12, 2013 Non-U.S. Person that is a Guaranteed or Conduit Affiliate of a U.S. Person Compliance Required as of July 12, 2013 Non-U.S. Person that is Not a Guaranteed or Conduit Affiliate of a U.S. Person Compliance Required as of July 12, 2013 Compliance required as of relevant compliance date for U.S. persons. Compliance required as of relevant compliance date for U.S. persons Compliance required as of relevant compliance date for U.S. persons Compliance required as of relevant compliance date for U.S. persons Large Trader Reporting for Physical Commodity Swaps Part 20 AU, CA, CH, EU, HK, JP Any jurisdiction other than AU, CA, CH, EU, HK, & JP, and the total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is >5% the SD’s aggregate notional swap dealing. Any jurisdiction other than AU, CA, CH, EU, HK, & JP, as long as total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is = 5% the SD’s aggregate notional swap dealing. U.S. Person Foreign Branch of U.S. Bank that is an SD/MSP Compliance required as of December 21, 2013 Compliance requirement clarified on November 14, 2013 Compliance required as of July 12, 2013 Compliance required as of December 21, 2013 Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Non-U.S. Person that is a Guaranteed Affiliate of a U.S. Person Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Compliance required on the later of October 9, 2013 or relevant compliance date for U.S. persons. Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013.† Compliance required as of October 9th, 2013. Not Applicable Non-U.S. Person that is a Conduit Affiliate of a U.S. Person Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Compliance required on the later of October 9, 2013 or relevant compliance date for U.S. persons. Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013.† Compliance required as of October 9th, 2013.† Not Applicable Non-U.S. Person that is Not a Guaranteed or Conduit Affiliate of a U.S. Person Not Applicable No-Action relief delays compliance until September 15, 2014. Compliance required on the later of July 12, 2013 or relevant compliance date for U.S. persons. Compliance required as of December 21, 2013 Compliance required as of October 9th, 2013. Keep records showing that notional swap dealing is = 5%. Comply with local laws. Not applicable, unless the Inter-Affiliate Clearing Exemption (Rule 50.52) is elected for another transaction, then compliance with the conditions of the Inter-Affiliate Clearing Exemption (e.g. , clearing) required as of October 9th, 2013. Not Applicable Not Applicable Substituted Compliance Determinations: Transaction-Level Requirements Applicable to Any Person Clearing & Swap Processing Part 50, 23.506, 23.610 Compliance required as of relevant compliance date for U.S. persons. Foreign Branch of a U.S. Bank that is an SD/MSP located in: Non-SD/MSP, Non-U.S. Person that is a Conduit Affiliate Non-SD/MSP, Non-U.S. Person that is a Guaranteed Affiliate Non-SD/MSP, Non-U.S. person (not a Conduit Affiliate or Guaranteed Affiliate) Non-U.S. SD/MSP established in AU, CA, CH, EU, HK, JP Non-U.S. SDs using personnel or agents located in the U.S. to arrange, negotiate, or execute such swaps U.S. Branch of a Non-U.S. SD/MSP Refer to Columns on Foreign Branches † If the swap is of a type or class subject to the CFTC's clearing mandate and at least one of the parties has elected the Inter-Affiliate Clearing Exemption (Rule 50.52) for another transaction, then the swap is subject to, and only subject to, the conditions of Rule 50.52 (e.g., clearing) and CFTC Real-Time Reporting requirements (Part 43). However, the language in the Federal Register notice could be read to support a different result. See 77 Fed. Reg. 45292, 45359.AU, CA, CH, EU, HK, JP Any jurisdiction other than AU, CA, CH, EU, HK, & JP, and the total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is >5% the SD’s aggregate notional swap dealing. Any jurisdiction other than AU, CA, CH, EU, HK, & JP, as long as total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is = 5% the SD’s aggregate notional swap dealing. Substituted Compliance Determinations: Transaction-Level Requirements Applicable to Any Person Clearing & Swap Processing Part 50, 23.506, 23.610 Foreign Branch of a U.S. Bank that is an SD/MSP located in: Non-SD/MSP, Non-U.S. Person that is a Conduit Affiliate Non-SD/MSP, Non-U.S. Person that is a Guaranteed Affiliate Non-SD/MSP, Non-U.S. person (not a Conduit Affiliate or Guaranteed Affiliate) Non-U.S. SD/MSP established in AU, CA, CH, EU, HK, JP Non-U.S. SDs using personnel or agents located in the U.S. to arrange, negotiate, or execute such swaps U.S. Branch of a Non-U.S. SD/MSP U.S. Person Foreign Branch of U.S. Bank that is an SD/MSP Non-U.S. Person that is a Guaranteed Affiliate of a U.S. Person Not Yet In Effect † Not Yet In Effect Not Applicable Non-U.S. Person that is a Conduit Affiliate of a U.S. Person Not Yet In Effect † Not Yet In Effect † Not Applicable Non-U.S. Person that is Not a Guaranteed or Conduit Affiliate of a U.S. Person Not Applicable Not Yet In Effect No-Action relief delays compliance until September 15, 2014 Keep records showing that notional swap dealing is = 5%. Comply with local laws. Not Applicable Not Applicable Not Applicable U.S. Person Foreign Branch of U.S. Bank that is an SD/MSP Compliance required as of December 21, 2013 Compliance requirement clarified on November 14, 2013 Compliance required as of July 12, 2013 Compliance required as of December 21, 2013 Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Non-U.S. Person that is a Guaranteed Affiliate of a U.S. Person Compliance required as of September 30, 2013. Compliance required as of September 30, 2013. Compliance required as of July 12, 2013 Compliance required as of September 30, 2013. Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Not Applicable Non-U.S. Person that is a Conduit Affiliate of a U.S. Person Compliance required as of September 30, 2013. Compliance required as of September 30, 2013. Compliance required as of July 12, 2013 Compliance required as of September 30, 2013. Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Compliance required as of October 9th, 2013. Not Applicable Non-U.S. Person that is Not a Guaranteed or Conduit Affiliate of a U.S. Person Not Applicable No-Action relief delays compliance until September 15, 2014. Compliance required as of July 12, 2013 Compliance required as of December 21, 2013 Compliance required as of October 9th, 2013. Keep records showing that notional swap dealing is = 5%. Comply with local laws. Not Applicable Not Applicable Not Applicable Not Yet In Effect Not Yet In Effect Trade Execution 37.12 and 38.11 Not Yet In Effect Not Yet In Effect Real-Time Reporting 23.205 & Part 43 Not Yet In Effect Refer to Columns on Foreign Branches Refer to Columns on Foreign Branches Compliance required as of compliance date for U.S. persons. † If the swap is of a type or class subject to the CFTC's clearing mandate and at least one of the parties has elected the Inter-Affiliate Clearing Exemption (Rule 50.52) for another transaction, then the swap is subject to, and only subject to, the conditions of Rule 50.52 (e.g., clearing) and CFTC Real-Time Reporting requirements (Part 43). However, the language in the Federal Register notice could be read to support a different result. See 77 Fed. Reg. 45292, 45359.AU CA EU JP CH HK Capital Adequacy Rules CCO Rules 3.3(a)-(d), (g) Annual Compliance Report 3.3(e) Compliance Required as of December 21, 2013 CEO/CCO Certification of Annual Compliance Report 3.3(f) Swap Data Recordkeeping 23.201,1 23.203 Substituted Compliance Risk Management Program 23.600 (except 23.600(c)(2)) Periodic Risk Exposure Reports 23.600(c)(2) Compliance Required as of December 21, 2013 Position Limits /Supervision /Business Continuity 23.601 – 23.603 Conflict of Interest Policies & Procedures 23.605 Business Records Availability for Disclosure and Inspection 23.606 Substituted Compliance Restrictions on Counterparty Clearing Relationships 23.608 Compliance Required as of December 21, 2013 Clearing Member Risk Management 23.609 Comply (No-Action Relief Delays Compliance Until March 3, 2014) Compliance Required as of December 21, 2013 2 The CFTC substituted compliance determination does not extend to an SD/MSP's obligation to provide direct access to or produce records required to be maintained. Substituted Compliance Determinations: Chief Compliance Officer Not Yet In Effect Capital Adequacy Rules Non-U.S. SD or MSP Entity-Level Requirements Only Applicable to SD/MSPs 1 The substituted compliance with Rule 23.201(b)(3) [complaints] and 23.201(b)(4) [marketing materials] is not available for swaps with a counterparty that is a U.S. person. Substituted Compliance Substitute Compliance Substituted Compliance Compliance Required as of December 21, 2013 Comply (No-Action Relief Delays Compliance Until March 3, 2014) Substituted Compliance Substituted Compliance Substituted Compliance2 Substituted Compliance2 Comply (No-Action Relief Delays Compliance Until March 3, 2014) Substituted Compliance Risk Management Substituted Compliance2 Substituted Compliance2 Swap Data RecordkeepingAU, CA, CH, HK EU JP AU, CA CH, HK EU JP Any jurisdiction other than AU, CA, CH, EU, HK, & JP, and the total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is >5% the SD’s aggregate notional swap dealing. Any jurisdiction other than AU, CA, CH, EU, HK, & JP, as long as total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is = 5% the SD’s aggregate notional swap dealing. U.S. Person Foreign Branch of U.S. Bank that is an SD/MSP Compliance required as of December 21, 2013 Substituted Compliance with Certain Provisions Compliance with 23.202(a)(1) and (b)(1) and Direct Access Requirements Required as of December 21, 2013 Substituted Compliance Compliance requirement clarified on November 14, 2013 Compliance required as of July 12, 2013 Compliance required as of December 21, 2013 Substituted Compliance with Certain Provisions Compliance with 23.202(a)(1) and (b)(1) and Direct Access Requirements Required as of December 21, 2013 Substituted Compliance Compliance required as of relevant compliance date for U.S. persons. Compliance required as of relevant compliance date for U.S. persons. Non-U.S. Person that is a Guaranteed or Conduit Affiliate of a U.S. Person Compliance required as of December 21, 2013 Substituted Compliance with Certain Provisions Compliance with 23.202(a)(1) and (b)(1) and Direct Access Requirements Required as of December 21, 2013 Substituted Compliance Compliance requirement clarified on November 14, 2013 Compliance required on the later of July 12, 2013 or relevant compliance date for U.S. persons. Compliance required as of December 21, 2013 Substituted Compliance with Certain Provisions Compliance with 23.202(a)(1) and (b)(1) and Direct Access Requirements Required as of December 21, 2013 Substituted Compliance Compliance required as of October 9, 2013 Compliance required as of October 9, 2013 Non-U.S. Person that is Not a Guaranteed or Conduit Affiliate of a U.S. Person Not Applicable Not Applicable Not Applicable No-Action relief delays compliance until September 15, 2014 Compliance required on the later of July 12, 2013 or relevant compliance date for U.S. persons. Compliance Required as of December 21, 2013 Substituted Compliance with Certain Provisions Compliance with 23.202(a)(1) and (b)(1) and Direct Access Requirements Required as of December 21, 2013 Substituted Compliance Compliance required as of October 9, 2013 Keep records showing that notional swap dealing is = 5%. Comply with local laws. Substituted Compliance Determinations: Transaction-Level Requirements Only Applicable to SD/MSPs Daily Trading Records -23.202 U.S. Branch of a Non-U.S. SD Foreign Branch of U.S. Bank that is Non-U.S. SD/MSP an SD/MSP located in: Non-U.S. SDs using personnel or agents located in the U.S. to arrange, negotiate, or execute such swaps Compliance required as of relevant compliance date for U.S. persons.AU, CA, CH, HK EU JP AU, CA CH, HK EU JP Any jurisdiction other than AU, CA, CH, EU, HK, & JP, and the total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is >5% the SD’s aggregate notional swap dealing. Any jurisdiction other than AU, CA, CH, EU, HK, & JP, as long as total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is = 5% the SD’s aggregate notional swap dealing. Substituted Compliance Determinations: Transaction-Level Requirements Only Applicable to SD/MSPs Daily Trading Records -23.202 U.S. Branch of a Non-U.S. SD Foreign Branch of U.S. Bank that is Non-U.S. SD/MSP an SD/MSP located in: Non-U.S. SDs using personnel or agents located in the U.S. to arrange, negotiate, or execute such swaps U.S. Person Foreign Branch of U.S. Bank that is an SD/MSP Compliance required as of December 21, 2013 Substituted Compliance Compliance required as of December 21, 2013 Compliance requirement clarified on November 14, 2013 Compliance required as of July 12, 2013 Compliance required as of December 21, 2013 Substituted Compliance Compliance required as of December 21, 2013 Compliance required as of relevant compliance date for U.S. persons. Compliance required as of relevant compliance date for U.S. persons. Non-U.S. Person that is a Guaranteed or Conduit Affiliate of a U.S. Person Compliance required as of December 21, 2013 Substituted Compliance Compliance required as of December 21, 2013 Compliance requirement clarified on November 14, 2013 Compliance required on the later of July 12, 2013 or relevant compliance date for U.S. persons. Compliance required as of December 21, 2013 Substituted Compliance Compliance required as of December 21, 2013 Compliance required as of October 9, 2013 Compliance required as of October 9, 2013 Non-U.S. Person that is Not a Guaranteed or Conduit Affiliate of a U.S. Person Not Applicable Not Applicable Not Applicable No-Action relief delays compliance until September 15, 2014 Compliance required on the later of July 12, 2013 or relevant compliance date for U.S. persons. Compliance required as of December 21, 2013 Substituted Compliance Compliance required as of December 21, 2013 Compliance required as of October 9, 2013 Keep records showing that notional swap dealing is = 5%. Comply with local laws. Compliance required as of relevant compliance date for U.S. persons. Trade Confirmation -23.501AU, CA, CH, HK EU JP AU, CA CH, HK EU JP Any jurisdiction other than AU, CA, CH, EU, HK, & JP, and the total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is >5% the SD’s aggregate notional swap dealing. Any jurisdiction other than AU, CA, CH, EU, HK, & JP, as long as total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is = 5% the SD’s aggregate notional swap dealing. U.S. Person Foreign Branch of U.S. Bank that is an SD/MSP Compliance required as of December 21, 2013 Substituted Compliance Compliance required as of December 21, 2013 Compliance requirement clarified on November 14, 2013 Compliance required as of July 12, 2013 Compliance required as of December 21, 2013 Substituted Compliance Compliance required as of December 21, 2013 Compliance required as of relevant compliance date for U.S. persons. Compliance required as of relevant compliance date for U.S. persons. Non-U.S. Person that is a Guaranteed or Conduit Affiliate of a U.S. Person Compliance required as of December 21, 2013 Substituted Compliance Compliance required as of December 21, 2013 Compliance requirement clarified on November 14, 2013 Compliance required on the later of July 12, 2013 or relevant compliance date for U.S. persons. Compliance required as of December 21, 2013 Substituted Compliance Compliance required as of December 21, 2013 Compliance required as of October 9, 2013 Compliance required as of October 9, 2013 Non-U.S. Person that is Not a Guaranteed or Conduit Affiliate of a U.S. Person Not Applicable Not Applicable Not Applicable No-Action relief delays compliance until September 15, 2014* Compliance required on the later of July 12, 2013 or relevant compliance date for U.S. persons. Compliance required as of December 21, 2013 Substituted Compliance Compliance required as of December 21, 2013 Compliance required as of October 9, 2013 Keep records showing that notional swap dealing is = 5%. Comply with local laws. * No-Action relief does not extend to compliance with 23.503 for transactions with other Non-U.S. SDs. However, Non-U.S. SDs established in the European Union or Japan may rely on substituted compliance for 23.503. Substituted Compliance Determinations: Portfolio Reconciliation & Compression -23.502 -23.503 Transaction-Level Requirements Only Applicable to SD/MSPs Non-U.S. SD/MSP Non-U.S. SDs using personnel or agents located in the U.S. to arrange, negotiate, or execute such swaps U.S. Branch of a Non-U.S. SD Foreign Branch of U.S. Bank that is an SD/MSP located in: Compliance required as of relevant compliance date for U.S. persons.AU, CA, CH, HK EU JP AU, CA CH, HK EU JP Any jurisdiction other than AU, CA, CH, EU, HK, & JP, and the total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is >5% the SD’s aggregate notional swap dealing. Any jurisdiction other than AU, CA, CH, EU, HK, & JP, as long as total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is = 5% the SD’s aggregate notional swap dealing. Substituted Compliance Determinations: Portfolio Reconciliation & Compression -23.502 -23.503 Transaction-Level Requirements Only Applicable to SD/MSPs Non-U.S. SD/MSP Non-U.S. SDs using personnel or agents located in the U.S. to arrange, negotiate, or execute such swaps U.S. Branch of a Non-U.S. SD Foreign Branch of U.S. Bank that is an SD/MSP located in: U.S. Person Foreign Branch of U.S. Bank that is an SD/MSP Compliance required as of December 21, 2013 Substituted Compliance for 23.504(b)(2) and (b)(4) Compliance With All Other Provisions of 23.504 Required as of December 21, 2013 Substituted Compliance for 23.504, other than 23.504(b)(5) and (b)(6) Compliance With 23.504(b)(5) and (b)(6) Required as of December 21, 2013 Compliance requirement clarified on November 14, 2013 Compliance required as of July 12, 2013 Compliance required as of December 21, 2013 Substituted Compliance for 23.504(b)(2) and (b)(4) Compliance With All Other Provisions of 23.504 Required as of December 21, 2013 Substituted Compliance for 23.504, other than 23.504(b)(5) and (b)(6) Compliance With 23.504(b)(5) and (b)(6) Required as of December 21, 2013 Compliance required as of relevant compliance date for U.S. persons. Compliance required as of relevant compliance date for U.S. persons. Non-U.S. Person that is a Guaranteed or Conduit Affiliate of a U.S. Person Compliance required as of December 21, 2013 Substituted Compliance for 23.504(b)(2) and (b)(4) Compliance With All Other Provisions of 23.504 Required as of December 21, 2013 Substituted Compliance for 23.504, other than 23.504(b)(5) and (b)(6) Compliance With 23.504(b)(5) and (b)(6) Required as of December 21, 2013 Compliance requirement clarified on November 14, 2013 Compliance required on the later of July 12, 2013 or relevant compliance date for U.S. persons. Compliance Required as of December 21, 2013 Substituted Compliance for 23.504(b)(2) and (b)(4) Compliance With All Other Provisions of 23.504 Required as of December 21, 2013 Substituted Compliance for 23.504, other than 23.504(b)(5) and (b)(6) Compliance With 23.504(b)(5) and (b)(6) Required as of December 21, 2013 Compliance required on the later of October 9, 2013 or the relevant compliance date for U.S. persons. Compliance required on the later of October 9, 2013 or the relevant compliance date for U.S. persons. Non-U.S. Person that is Not a Guaranteed or Conduit Affiliate of a U.S. Person Not Applicable Not Applicable Not Applicable No-Action relief delays compliance until September 15, 2014* Compliance required on the later of July 12, 2013 or relevant compliance date for U.S. persons. Compliance required as of December 21, 2013 Substituted Compliance for 23.504(b)(2) and (b)(4) Compliance With All Other Provisions of 23.504 Required as of December 21, 2013 Substituted Compliance for 23.504, other than 23.504(b)(5) and (b)(6) Compliance With 23.504(b)(5) and (b)(6) Required as of December 21, 2013 Compliance required on the later of October 9, 2013 or the relevant compliance date for U.S. persons. Keep records showing that notional swap dealing is = 5%. Comply with local laws. * No-Action relief does not extend to compliance with 23.504 for transactions with other Non-U.S. SDs. However, Non-U.S. SDs established in the European Union or Japan may rely on substituted compliance for 23.504. Compliance required as of relevant compliance date for U.S. persons. Swap Trade Relationship Documentation -23.504AU, CA, CH, HK EU JP AU, CA CH, HK EU JP Any jurisdiction other than AU, CA, CH, EU, HK, & JP, and the total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is >5% the SD’s aggregate notional swap dealing. Any jurisdiction other than AU, CA, CH, EU, HK, & JP, as long as total notional of all the SD's swap dealing in branches outside these jurisdictions and the US is = 5% the SD’s aggregate notional swap dealing. U.S. Person Non-U.S. Person that is a Guaranteed or Conduit Affiliate of a U.S. Person Compliance required as of December 21, 2013 Compliance required as of December 21, 2013 Compliance required as of December 21, 2013 Compliance requirement clarified on November 14, 2013 Compliance required on the later of July 12, 2013 or relevant compliance date for U.S. persons. Compliance required as of December 21, 2013 Compliance required as of December 21, 2013 Compliance required as of December 21, 2013 Compliance required as of October 9, 2013 Compliance required as of October 9, 2013 Non-U.S. Person that is Not a Guaranteed or Conduit Affiliate of a U.S. Person Not Applicable Not Applicable Not Applicable No-Action relief delays compliance until September 15, 2014 Compliance required on the later of July 12, 2013 or relevant compliance date for U.S. persons. Compliance required as of December 21, 2013 Compliance required as of December 21, 2013 Compliance required as of December 21, 2013 Compliance required as of October 9, 2013 Keep records showing that notional swap dealing is = 5%. Comply with local laws. U.S. Person Foreign Branch of U.S. Bank that is an SD/MSP Not Applicable Not Applicable Not Applicable Compliance requirement clarified on November 14, 2013 Compliance requirement clarified on November 14, 2013 Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Non-U.S. Person that is a Guaranteed or Conduit Affiliate of a U.S. Person Not Applicable Not Applicable Not Applicable Compliance requirement clarified on November 14, 2013 Compliance requirement clarified on November 14, 2013 Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Non-U.S. Person that is Not a Guaranteed or Conduit Affiliate of a U.S. Person Not Applicable Not Applicable Not Applicable No-Action relief delays compliance until September 15, 2014 Compliance requirement clarified on November 14, 2013 Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Any Person Substituted Compliance Determinations: End-User Exception Documentation -23.505 External Business Conduct Standards -23.400 -23.451 Margin & Segregation Not Yet In Effect Transaction-Level Requirements Only Applicable to SD/MSPs Non-U.S. SD/MSP Non-U.S. SDs using personnel or agents located in the U.S. to arrange, negotiate, or execute such swaps U.S. Branch of a Non-U.S. SD Foreign Branch of U.S. Bank that is an SD/MSP located in: Compliance required as of relevant compliance date for U.S. persons. Compliance required as of relevant compliance date for U.S. persons.
Download PDF[1285KB]
Prudential Regulators and CFTC Re-Propose Margin Requirements for Non-Cleared Swaps
"CFTC Announces February 12 Public Meeting on Cross-Border Guidance"
"CFTC Effective Dates Timeline for Swaps Rules"
Latest Posts"MSRB’s Rule G-42 Submitted to SEC for Approval; Rule G-44 Now in Effect"