04.14.2011

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Updates

CFTC and SEC Release Joint Study regarding Algorithmic Descriptions for Derivatives

On Friday, April 8, 2011, the CFTC and SEC released a joint study regarding the feasibility of requiring the derivatives industry to utilize algorithmic descriptions in order to describe financial derivatives.  The study concludes that the industry is capable of using a "common set of computer-readable descriptions" to represent derivatives.  The study adds that prior to any implementation, the following will be needed: the establishment of certain identifiers, further analysis of the costs and benefits, and a uniform way to represent certain financial terms.

Read the CFTC and SEC press releases 

CFTC Proposes Rules on Swap Data Recordkeeping and Reporting Requirements

On Tuesday, April 12, the CFTC proposed rules establishing swap data recordkeeping and reporting requirements applicable to counterparties to pre-enactment swaps and transition swaps.  The proposed rules clarify what records must be kept and what data must be reported.

Read the CFTC press release

Five Federal Agencies Propose Rule on Swap Margin and Capital Requirements

On Tuesday, April 12, 2011, five federal agencies proposed a rule to establish margin and capital requirements for swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants.  The five agencies include the Federal Reserve Board, the Farm Credit Administration, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, and the Office of the Comptroller of the Currency.  The proposed rule is required under the Dodd-Frank Act.  The amount of margin required varies under the proposed rule based on the relative risk of the counterparty of the swap or security-based swap.  Additionally, the proposed rule requires swap entities to comply with existing capital requirement standards applied as part of their prudential regulation.

Read the Federal Reserve press release

Federal Reserve and FDIC Propose Rule on Resolution Plan Reporting

On Tuesday, April 12, 2011, the Federal Reserve Board and the Federal Deposit Insurance Corporation proposed a rule requiring large, systemically significant bank holding companies and nonbank financial companies to submit annual resolution plans and quarterly credit exposure reports.  The proposed rule implements certain requirements under the Dodd-Frank Act and only apples to bank holding companies with assets in excess of $50 billion and nonbank financial companies designated by the Financial Stability Oversight Council.

Read the Federal Reserve press release

 

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