UPDATE 7/15: The CFTC has issued a final order delaying the implementation of Category2 and 3 rules. “In our effort to protect the American public, the CFTC is now approving final rules called for in the Dodd-Frank Act with more final rules to be considered in upcoming meetings next week, in August and throughout the fall. Today, we are granting temporary relief from certain provisions that would otherwise apply to swaps or swap dealers on July 16,” said Chairman Gensler. “This order enables the Commission to continue its progress in finalizing rules.”
UPDATE: The CFTC has released the Category 1 list showing the areas which require rule-makings. Rules in these areas will not become effective until the rules are finalized. Each final rule will come with an implementation timetable.
The CFTC has also released the Category 4 list showing the self-effective rules that will not be subject to temporary relief. All of these provisions WILL GO INTO EFFECT ON JULY 16th.
The CFTC held an open meeting today to discuss the implementation on the Dodd-Frank Act. CFTC Rules and regulations required by the Dodd-Frank Act were set to go into effect in July, though many rules have not yet been finalized. This morning, the Commissioners voted to submit a proposal to the federal register that would delay the implementation of some self-executing elements of the law (such as entity and product definitions) until they had been finalized or until December 31st, 2011. Any amendments to the Commodity Exchange Act covered by the Dodd-Frank Act will also be delayed until finalization or December 31st.
Other Dodd-Frank rules (to be listed on the CFTC’s website as Category 1 rules) will not go into effect until commented on and finalized, irrespective of the December deadline, so they do not need to be addressed by this proposal. However, provisions like the designated contract market, DCM, and derivatives clearing organization, DCO, core principles will be implemented in July, as will anti-fraud and manipulation rules. The CFTC will provide special relief from the new swaps rules for swap execution facilities, major swap participants, and swap dealers.
Said Chairman Gensler: “Some might ask: why six months? Six months will provide the Commission with the opportunity to re-examine the status of final rulemaking in light of the changed regulatory landscape at the time. It would allow us, if appropriate at the time, to tailor relief from certain provisions of the Dodd-Frank Act at the end of the year.”
Commissioners O’Malia and Sommers voted to strike the December 31st deadline for temporary relief (the Sunset Provision), arguing that it will simply have to be extended in six months, but the other three Commissioners voted it down. The rule will be published to the federal register shortly, and the CFTC will provide a full explanation of which Dodd-Frank provisions fall under which types of relief. There will be a brief 14-day comment period on the proposal.