CFTC Chairman Reaffirms Commitment To Implementing Dodd-Frank Act Mandate On Swap Regulations

On May 11, 2011, U.S. Commodities Futures Trading Commission ("CFTC") Chairman Gary Gensler addressed managers of private equity funds at the 13th Annual Global Private Equity Conference. The chairman's remarks centered around the CFTC's proposed rulemaking on swap transactions in light of the Dodd-Frank Act. Although some stakeholders suggest that the Dodd-Frank Act's requirements over swap transactions are too restrictive or that the CFTC's interpretation of the Dodd-Frank Act mandate is too narrow, Chairman Gensler confirmed that the CFTC will adhere to its perceived mandate under the Dodd-Frank Act when issuing its new swaps rules on or prior to July 21, 2011.

A swap is a financial transaction where a financial instrument or commodity is exchanged (or swapped) for another financial instrument or commodity. A common example is the airline industry's use of swap transactions to hedge against the price of crude oil. In these transactions, the airlines purchase