CFTC and SEC Propose Rule on Major Swap Participant and Major Security-Based Swap Participant Definition

The SEC and the Commodity Futures Trading Commission (CFTC) (together, the Commissions) have jointly issued a rule proposal (Proposed Rules) to define terms related to the swap and security-based swap markets as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd- Frank Act). The Proposed Rules offer definitions of the terms "swap dealer," "security-based swap dealer," "major swap participant," "major security-based swap participant," and "eligible contract participant." This article's focus is on the proposed definitions of "major swap participant" and "major security-based swap participant" (the Proposed Definitions).

The Dodd-Frank Act added the terms "major swap participant" and "major security-based swap participant" (collectively Major Participant) to the Commodity Exchange Act, as amended (the Commodity Act), and the Securities Exchange Act of 1934, as amended (the Exchange Act), respectively, to regulate entities with large