WASHINGTON Feb 16 The U.S. futures
regulator said on Thursday it will unveil on Feb. 23 rules that
will shed more light on which firms will be forced to set aside
additional funds to cover their transactions in the swap market
as it moves to toughen oversight in the once opaque market.
The U.S. Commodity Futures Trading Commission is expected to
vote on a final rule that would define a swap dealer and a major
swap participant. The Securities and Exchange Commission, which
is working with the CFTC on the joint rules, may also vote on a
similar measure next week.
When the measure was first proposed in December 2010, a firm
would be designated as a dealer if the aggregate notional
amount of swaps entered into in a year exceeded $100 million.
Some industry watchers and CFTC officials have expressed
concern that many end users will be unintentionally swept up in
the dealer definition if it is too broad, subjecting them to
higher costs to hedge their commercial risk.
The rules have drawn intense lobbying by companies ranging
from Morgan Stanley to utilities such as Exelon that have argued
they should not be required to tie up additional capital
The CFTC is working to complete a regulatory framework for
the previously opaque $700 trillion over-the-counter derivatives
market required under the 2010 Dodd-Frank law.
The regulator so far has finalized more than 20 rules, and
has laid out an aggressive agenda to complete about 20 more,
including capital and margin rules, and end user exemptions.
The CFTC also will vote next week on a proposed rule on
procedures to set minimum block sizes for large notional
off-facility swaps and block Trades; and further measures to
protect the identities of parties to swap transactions.