Derivative Exchange Requirements Become Effective On October 2, 2013

Up to now, the over-the-counter (OTC) derivatives market has largely focused on compliance with mandates to centrally clear certain derivatives required to be settled by a regulated clearinghouse. However, "clearing," or settlement, is but one stage – in fact, it is the final stage – in the life cycle of a derivative, and now other stages in that life cycle are subject to new regulatory requirements with aggressive deadlines.

The U.S. Commodity Futures Trading Commission (CFTC) now shifts attention to the trade execution stage by making effective on October 2, 2013 its mandate to require certain derivatives to be executed on regulated exchanges, subject to conditions described in this Alert.