Sweeping derivative reform legislation contains momentous
changes to the way swaps and security-based swaps are regulated and
reported.
On July 21, the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the Act) was signed into law by President Obama.
Title VII of the Act, titled the Wall Street Transparency and
Accountability Act of 2010, contains significant changes to the
ways in which derivatives are regulated. Some important aspects of
the new regulations are summarized below.
Regulation of Swaps and Security-Based Swaps
The Act will regulate the over-the-counter derivatives market by
doing the following:
- Defining the terms "swap" and "security-based
swap" broadly, to include almost any agreement or transaction
where payments under the agreement or transaction are determined by
reference to the value or level of an underlying asset, index, or
quantitative measure; and
