On April 9, the CFTC finalized rules to address the timing in which derivatives clearing organizations and members can accept or reject trades, the risk management policies of futures commissions merchants, swap dealers, and major swap participants, and the clearing documentation between a customer and a futures commission merchant.
Under the new regulations, the parties are prohibited to disclose the identity of a customer’s counterparty. The rules prohibit limitations on the number of counterparties that a customer can trade with and prohibit actions that would restrict the size of the position that a customer may take with an individual counterparty. Individuals are allowed access to execute a trade on reasonable terms. Finally, the rules ensure compliance with time frames for accepting a trade into clearing.
The rules require a clearing member to accept or reject a trade as soon as is technologically possible. The risk management rules require SDs, MSPs, and FCMs to establish certain risk management procedures related to credit limits and stress tests.