Sixty-five firms and affiliates, including Goldman Sachs, Newedge, Bank of America Merrill Lynch, Morgan Stanley and JPMorgan, have registered with American regulators as swap dealers as mandated by the Dodd-Frank Act.
“Two of the most significant Dodd-Frank reforms began implementation this week,” CFTC Chairman Gary Gensler said, according to Waters Technology. “Real-time reporting brings transparency to the formerly opaque swaps market. Also this week, the largest entities dealing in the swaps market became provisionally registered as swap dealers.”
Interest rate and credit index swaps were supposed to begin reporting on Dec. 31, as well, though swaps participants are also expected to adhere to record-keeping and reporting requirements for swap data repositories. The public will have access to the reporting data through SDR websites.
“With these historic reforms, the public, for the first time, can see the price and volume of swaps transactions, just as it has benefitted from the transparency ford decades in the securities and futures markets,” Gensler said, Waters Technology reports. “The public will also benefit as swap dealers now will be subject to commonsense standards for sales practices, record-keeping and business conduct rules that will help lower risk to the rest of the economy.”
Additional swap transaction reporting will be phased in over the next few months. Swap dealer reporting for foreign exchange, equity and physical commodity swaps will take effect in February. All other market participants subject to reporting requirements must begin reporting in April.
“This week’s implementation of transparency and oversight reforms begins to fulfill key goals of the Dodd-Frank Act,” Gensler said, according to Waters Technology. “They are an historic change for the markets that will benefit the public and the economy at large.”