CFTC and SEC adopt joint final rule defining “swap dealer,” “security-based swap dealer,” “major swap participant” and “major security-based swap participant”

On May 23, 2012 the Commodity Futures Trading Commission (the “CFTC”) and the Securities and Exchange
Commission (the “SEC” and together with the CFTC, the “Commissions”) published final rules (the “Final Rules”)1 and interpretive guidance (the “Adopting Release”) under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) defining “swap dealer,” “security-based swap dealer,” “major swap participant,” and “major security-based swap participant.” The Final Rules in some cases adopt and in other cases modify the rules (the “Proposed Rules”) and guidance (the “Proposing Release”) proposed by the Commissions in December 2010. Taking into account comments received from various commenters, the Final Rules will capture a smaller number of market participants than would have been covered by the Proposed Rules. The SEC estimates that 50 or fewer market participants will be classified as security-based swap dealers and that five – and possibly zero – market participants will be classified as major security-based swap participants. The CFTC estimates that approximately 125 market
participants will be covered by the definitions of swap dealer and major swap participants.

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