The Commodity Futures Trading Commission published swaps definitions and a timetable related to registration requirements this week that will allow swaps dealers until January to come into compliance with the new rules.
“You don’t start counting your dealer positions until Oct. 12,” Andrea Kramer, a partner and head of financial products, trading and derivatives at the law firm McDermott Will & Emery LLP, said, according to Businessweek. “It would make no sense to apply the rules on the same day you start counting dealer positions.”
Lobby groups and banks, including Bank of America , Citigroup and JPMorgan, have pressured the CFTC to delay the effective date of registration requirements due to uncertainty surrounding the new rules.
“The CFTC could be clearer in outlining deadlines and when exceptions are available,” Donald N. Lamson, counsel at Shearman & Sterling LLP, said, Businessweek reports.
Approximately 125 firms are estimated to register with the CFTC and will face heightened collateral, conduct and capital trading standards.
A timeline published by the CFTC defines when and how financial institutions will determine whether they meet the definition of “swap-dealer.” Firms must first determine whether they conduct at least $8 billion in aggregate gross notional swap-dealing with counterparties, according to Businessweek.
The swap-definition rule takes effect Oct. 12, after with firms given two months from the end of the month they cross the $8 billion threshold to register with the CFTC as dealers, though firms do have the option to register earlier than required.