Recent Developments in Swaps Regulatory Framework

Dechert’s Global Commodities & Derivatives Team prepared the paper below at the request of the Investment Company Institute (“ICI”) describing recent developments in the swaps regulatory framework of the U.S. Commodity Futures Trading Commission (“CFTC”), in connection with the December 11, 2013 ICI Securities Law Developments Conference (which was cancelled due to weather events). This paper discusses, among other things:

• the CFTC’s new swap clearing and exchange trading mandates and processes,
• proposed margin requirements for uncleared swaps,
• the CFTC’s “U.S. person” definition and interpretative guidance regarding its cross-border authority over non-US person swap market participants and transactions, and
• certain other regulatory developments relevant to buy-side market participants.

Many investment managers and other swap market participants are currently grappling with the issues raised in this paper in the rapidly changing international regulatory environment.

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