The CFTC proposed rules establishing minimum capital, liquidity, financial reporting and other related requirements applicable to CFTC-registered swap dealers ("SDs") and major swap participants ("MSPs"). Comments on the proposed rules, which were published in the Federal Register, must be submitted by March 16, 2017.
The proposed rules cover the following areas relating to SDs and MSPs: (i) capital requirements; (ii) liquidity requirements; (iii) financial recordkeeping and financial reporting; (iv) obligation to notify regulators if a firm's capital drops below certain levels; and (v) limitations on the withdrawal of capital and liquid assets.
As previously indicated, the proposal would obligate entities covered by the proposal to keep current books and records in accordance with U.S. Generally Accepted Accounting Principles. Firms would be able to use models, although the models would have to be approved by the regulators. In addition, the rules provide for a "comparability" determination that will allow non-U.S. swap dealers that are not subject to regulation by the Federal Reserve Board to be subject to their home country capital rules.
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