In an open meeting in Washington, D.C., the CFTC finalized three more Dodd-Frank rules Thursday. Two cover the commodity futures swap market, and the third addresses whistle-blower protection.
The most dramatic change to the regulatory landscape comes in the form of rulemaking “Part 49: Swap Data Repositories” (“SDRs”). Swap Data Repositories, as the name suggests, will gather and store information from swap counter-parties and swap execution facilities. The makers of Dodd-Frank intended SDRs be used for, in the words of CFTC Commissioner Bart Chilton, “‘letting the sunshine in’ to what we used to call these dark markets for swaps trading.” The rule lays out registration and compliance obligations for SDRs, including a registration form and core principles.
The initial proposed rule, first published and opened for comment in December 2010, requires SDRs to:
- Accept and confirm data
- Provide direct electronic access to the CFTC and other specified regulators
- Monitor, screen, and analyze data
- Safeguard data
- Create emergency procedures and system protections
SDRs would also be bound to accept all data in their selected asset class(es), protect the confidentiality of the data, and be prohibited from making commercial use of their data. In the final rule, CFTC regulators made a few changes based on public feedback to access rules, real-time reporting provisions, and governance requirements.
The other finalized rules concern Agricultural Swap treatment and the Whistleblower protection program. The Agriculture Swaps rule passed unanimously, and the other two passed by a wide margin of 4-1.