The New CFTC and SEC Swap "Entity" Definitions – Highlights

Originally published April 30, 2012

Keywords: CFTC, SEC, Swap "Entity" Definitions, Commodity Futures, Trading Commission, adopting release

Introduction

On April 27, 2012, the US Commodity Futures Trading Commission ("CFTC") and Securities and Exchange Commission ("SEC") (collectively, the "Commissions") released the text (the "Adopting Release")¹ of their final rulemaking further defining the terms "swap dealer," "security-based swap dealer," "major swap participant," "major security-based swap participant" and "eligible contract participant."² We offer below selected observations on the final rules and the Commissions' interpretive guidance in the Adopting Release. One significant question generally not addressed by the Commissions is how these definitions and the various exemptions will ultimately apply to the swap activities of entities outside of the United States. The Commissions note that extraterritoriality issues will be addressed separately.