CFTC Update: Product Rules Defining "Swap" And "Security-Based Swap"

The Commodity Futures Trading Commission (the "CFTC") and the Securities and Exchange Commission (the "SEC", and together with the CFTC, the "Commissions") recently adopted final rules (the "Product Rules")¹ defining the terms "swap" and "security-based swap" and providing related interpretive guidance on a wide range of issues. Among other things, these rules will affect private fund managers as they evaluate whether they may claim an exemption from registration as a commodity pool operator ("CPO") or a commodity trading advisor ("CTA") under the Commodity Exchange Act (the "CEA") or whether they may have to register.² The Product Rules become effective sixty days after publication in the Federal Register, which is expected to occur shortly. This CFTC Update provides a high-level summary of some of the most significant aspects of a lengthy and extraordinarily complex document, and is not intended to be detailed or comprehensive.