CFTC Action To Defer Effective Date For Swaps Regulation

On June 14, 2011, the Commodity Futures Trading Commission ("CFTC") issued a proposed order (the "CFTC Order") that would delay the effective date of many swap trading provisions of the Dodd-Frank Act until no later than December 31, 2011. On June 15, 2011, the Securities and Exchange Commission ("SEC") issued an Exemptive Order granting similar temporary relief for security-based swap transactions. The deferred operable dates also would affect the margin requirements recently proposed by the Federal Reserve and prudential regulators for bank swap dealers and prudentially regulated institutions.

The CFTC Order would grant transitional relief from those provisions of the Dodd-Frank Act that reference the terms "swap," "swap dealer," "major swap participant," or "eligible contract participant," which have not, as yet, been definitively defined by the CFTC and the SEC. Recognizing that final rulemakings on the definitions will not be in place by July 16, 2011 (the