CFTC Adopts Final Rules Requiring Execution Of Swaps On Organized Facilities

On May 16, 2013, the U.S. Commodity Futures Trading Commission (the "CFTC") adopted several rules relating to swap execution. These much-anticipated rules make three significant changes to the regulatory framework of derivatives: first, they create a new regulated entity – the registered swap execution facility ("SEF"); second, they detail the minimum trading functionality required of SEFs; and, third, they implement a trade execution requirement that mandates that certain swaps be executed on a SEF or a designated contract market ("DCM"). Collectively, these rules, together with the mandatory clearing requirement for certain derivatives, will transform how derivatives are traded.