cfr_sections
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72 rows where part_number = 23 and title_number = 17 sorted by section_id
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 17:17:1.0.1.1.22.2.7.1 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | B | Subpart B—Registration | § 23.21 Registration of swap dealers and major swap participants. | CFTC | (a) Each person who comes within the definition of the term “swap dealer” in section 1a(49) of the Act, as such term may be further defined by the Commission, is subject to the registration provisions under the Act and to part 3 of this chapter. (b) Each person who comes within the definition of the term “major swap participant” in section 1a(33) of the Act, as such term may be further defined by the Commission, is subject to the registration provisions under the Act and to part 3 of this chapter. (c) Each affiliate of an insured depository institution described in section 716(c) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203 section 716(c), 124 Stat. 1376 (2010)) is required to be registered as a swap dealer if the affiliate is a swap dealer or as a major swap participant if the affiliate is a major swap participant. | |||||
| 17:17:1.0.1.1.22.2.7.2 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | B | Subpart B—Registration | § 23.22 Prohibition against statutory disqualification in the case of an associated person of a swap dealer or major swap participant. | CFTC | [77 FR 2628, Jan. 19, 2012, as amended at 78 FR 20792, Apr. 8, 2013; 78 FR 64175, Oct. 28, 2013; 83 FR 7996, Feb. 23, 2018] | (a) Definition. For purposes of this section, the term “person” means an “associated person of a swap dealer or major swap participant” as defined in section 1a(4) of the Act and § 1.3 of this chapter, but does not include an individual employed in a clerical or ministerial capacity. (b) Fitness. No swap dealer or major swap participant may permit a person who is subject to a statutory disqualification under section 8a(2) or 8a(3) of the Act to effect or be involved in effecting swaps on behalf of the swap dealer or major swap participant, if the swap dealer or major swap participant knows, or in the exercise of reasonable care should know, of the statutory disqualification; Provided, however, that the prohibition set forth in this paragraph (b) shall not apply to any person listed as a principal or registered as an associated person of a futures commission merchant, retail foreign exchange dealer, introducing broker, commodity pool operator, commodity trading advisor, or leverage transaction merchant, or any person registered as a floor broker or floor trader, notwithstanding that the person is subject to a disqualification from registration under section 8a(2) or 8a(3) of the Act. (c) Dual and multiple associations. (1) A person who is already associated as an associated person of a swap dealer or major swap participant may become associated as an associated person of another swap dealer or major swap participant if the other swap dealer or major swap participant meets the requirements set forth in § 3.60(b)(2)(i)(A) of this chapter. (2) Each swap dealer and major swap participant associated with such associated person shall supervise that associated person, and each swap dealer and major swap participant is jointly and severally responsible for the conduct of the associated person with respect to the: (i) Solicitation or acceptance of customer orders, (ii) Solicitation of funds, securities or property for a participation in a commodity pool, (iii) Solicitation of a client's or prospective client'… | ||||
| 17:17:1.0.1.1.22.2.7.3 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | B | Subpart B—Registration | § 23.23 Cross-border application. | CFTC | [85 FR 56997, Sept. 14, 2020, as amended at 85 FR 69499, Nov. 3, 2020; 89 FR 71810, Sept. 4, 2024] | (a) Definitions. Solely for purposes of this section the terms listed in this paragraph (a) have the meanings set forth in paragraphs (a)(1) through (24) of this section. A person may rely on a written representation from its counterparty that the counterparty does or does not satisfy the criteria for one or more of the definitions listed in paragraphs (a)(1) through (24) of this section, unless such person knows or has reason to know that the representation is not accurate; for the purposes of this rule a person would have reason to know the representation is not accurate if a reasonable person should know, under all of the facts of which the person is aware, that it is not accurate. (1) An affiliate of, or a person affiliated with a specific person, means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. (2) Control including the terms controlling, controlled by, and under common control with, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract, or otherwise. (3) Foreign branch means any office of a U.S. bank that: (i) Is located outside the United States; (ii) Operates for valid business reasons; (iii) Maintains accounts independently of the home office and of the accounts of other foreign branches, with the profit or loss accrued at each branch determined as a separate item for each foreign branch; and (iv) Is engaged in the business of banking and is subject to substantive regulation in banking or financing in the jurisdiction where it is located. (4) Foreign-based swap means: (i) A swap by a non-U.S. swap entity, except for a swap booked in a U.S. branch; or (ii) A swap conducted through a foreign branch. (5) Foreign counterparty means: (i) A non-U.S. person, except with respect to a swap booked in a U.S. branch of that non-U.S. person;… | ||||
| 17:17:1.0.1.1.22.2.7.4 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | B | Subpart B—Registration | §§ 23.24-23.40 [Reserved] | CFTC | ||||||
| 17:17:1.0.1.1.22.3.7.1 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.100 Definitions applicable to capital requirements. | CFTC | [85 FR 57547, Sept. 15, 2020, as amended at 89 FR 45585, May 23, 2024] | For purposes of §§ 23.101 through 23.106 of subpart E, the following terms are defined as follows: Actual daily net trading profit and loss. This term is used in assessing the performance of a swap dealer's VaR measure and refers to changes in the swap dealer's portfolio value that would have occurred were end-of-day positions to remain unchanged (therefore, excluding fees, commissions, reserves, net interest income, and intraday trading). Advanced approaches Board-regulated institution. The term shall have the meaning ascribed to it in 12 CFR part 217. BHC equivalent risk-weighted assets. This term means the risk-weighted assets of a swap dealer that elects to meet the capital requirements in § 23.101(a)(1)(i) calculated as follows: (1) If the swap dealer is not approved to use internal models to calculate credit risk exposure under § 23.102, it shall calculate its credit risk-weighted assets using the bank holding company regulations in subpart D of 12 CFR part 217, as if the swap dealer itself were a bank holding company, with the swap dealer permitted to calculate its exposure amount for OTC derivative contracts using either the current exposure method or the standardized approach for counterparty credit risk, without regard to the status of any affiliate of the swap dealer as an advanced approaches Board-regulated institution; (2) If the swap dealer is approved to use internal models to calculate credit risk exposure under § 23.102, it shall calculate its credit risk-weighted assets using the bank holding company regulations in subpart E of 12 CFR part 217, as if the swap dealer itself were a bank holding company, with the swap dealer permitted to calculate its exposure amount for OTC derivative contracts using either the internal models methodology or the standardized approach for counterparty credit risk, without regard to the status of any affiliate of the swap dealer as an advanced approaches Board-regulated institution; (3) If the swap dealer is not approved to use internal models to calculate … | ||||
| 17:17:1.0.1.1.22.3.7.10 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.151 Definitions applicable to margin requirements. | CFTC | [81 FR 695, Jan. 6, 2016, as amended at 83 FR 60346, Nov. 26, 2018; 85 FR 27678, May 11, 2020; 86 FR 246, Jan. 5, 2021; 86 FR 6857, Jan. 25, 2021] | For the purposes of §§ 23.150 through 23.161: Bank holding company has the meaning specified in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841). Broker has the meaning specified in section 3(a)(4) the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)). Business day means any day other than a Saturday, Sunday, or legal holiday. Company means a corporation, partnership, limited liability company, business trust, special purpose entity, association, or similar organization. Counterparty means the other party to a swap to which a covered swap entity is a party. Covered counterparty means a financial end user with material swaps exposure or a swap entity that enters into a swap with a covered swap entity. Covered swap entity means a swap dealer or major swap participant for which there is no prudential regulator. Cross-currency swap means a swap in which one party exchanges with another party principal and interest rate payments in one currency for principal and interest rate payments in another currency, and the exchange of principal occurs on the date the swap is entered into, with a reversal of the exchange of principal at a later date that is agreed upon when the swap is entered into. Currency of Settlement means a currency in which a party has agreed to discharge payment obligations related to an uncleared swap or a group of uncleared swaps subject to a master netting agreement at the regularly occurring dates on which such payments are due in the ordinary course. Data source means an entity and/or method from which or by which a covered swap entity obtains prices for swaps or values for other inputs used in a margin calculation. Day of execution means the calendar day at the time the parties enter into an uncleared swap, provided: (1) If each party is in a different calendar day at the time the parties enter into the uncleared swap, the day of execution is deemed the latter of the two dates; and (2) If an uncleared swap is— (i) Entered into after 4:00 p.m. in the lo… | ||||
| 17:17:1.0.1.1.22.3.7.11 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.152 Collection and posting of initial margin. | CFTC | [81 FR 695, Jan. 6, 2016, as amended at 86 FR 6857, Jan. 25, 2021] | (a) Collection —(1) Initial obligation. On or before the business day after execution of an uncleared swap between a covered swap entity and a covered counterparty, the covered swap entity shall collect initial margin from the covered counterparty in an amount equal to or greater than an amount calculated pursuant to § 23.154, in a form that complies with § 23.156, and pursuant to custodial arrangements that comply with § 23.157. (2) Continuing obligation. The covered swap entity shall continue to hold initial margin from the covered counterparty in an amount equal to or greater than an amount calculated each business day pursuant to § 23.154, in a form that complies with § 23.156, and pursuant to custodial arrangements that comply with § 23.157, until such uncleared swap is terminated or expires. (b) Posting —(1) Initial obligation. On or before the business day after execution of an uncleared swap between a covered swap entity and a financial end user with material swaps exposure, the covered swap entity shall post initial margin with the counterparty in an amount equal to or greater than an amount calculated pursuant to § 23.154, in a form that complies with § 23.156, and pursuant to custodial arrangements that comply with § 23.157. (2) Continuing obligation. The covered swap entity shall continue to post initial margin with the counterparty in an amount equal to or greater than an amount calculated each business day pursuant to § 23.154, in a form that complies with § 23.156, and pursuant to custodial arrangements that comply with § 23.157, until such uncleared swap is terminated or expires. (3) Minimum transfer amount. A covered swap entity is not required to collect or to post initial margin pursuant to §§ 23.150 through 23.161 with respect to a particular counterparty unless and until the combined amount of initial margin and variation margin that is required pursuant to §§ 23.150 through 23.161 to be collected or posted and that has not been collected or posted with respect to the counterp… | ||||
| 17:17:1.0.1.1.22.3.7.12 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.153 Collection and posting of variation margin. | CFTC | [81 FR 695, Jan. 6, 2016, as amended at 86 FR 6857, Jan. 25, 2021] | (a) Initial obligation. On or before the business day after the day of execution of an uncleared swap between a covered swap entity and a counterparty that is a swap entity or a financial end user, the covered swap entity shall collect the variation margin amount from the counterparty when the amount is positive, or post the variation margin amount with the counterparty when the amount is negative as calculated pursuant to § 23.155 and in a form that complies with § 23.156. (b) Continuing obligation. The covered swap entity shall continue to collect the variation margin amount from, or to post the variation margin amount with, the counterparty as calculated each business day pursuant to § 23.155 and in a form that complies with § 23.156 each business day until such uncleared swap is terminated or expires. (c) Minimum transfer amount. A covered swap entity is not required to collect or to post variation margin pursuant to §§ 23.150 through 23.161 with respect to a particular counterparty unless and until the combined amount of initial margin and variation margin that is required pursuant to §§ 23.150 through 23.161 to be collected or posted and that has not been collected or posted with respect to the counterparty is greater than the minimum transfer amount, as the term is defined in § 23.151. (d) Netting. (1) To the extent that more than one uncleared swap is executed pursuant to an eligible master netting agreement between a covered swap entity and a counterparty, a covered swap entity may calculate and comply with the applicable variation margin requirements of this section on an aggregate basis with respect to all uncleared swaps governed by such agreement subject to paragraph (d)(2) of this section. (2)(i) Except as permitted in paragraph (d)(2)(ii) of this section, if an eligible master netting agreement covers uncleared swaps entered into on or after the applicable compliance date set forth in § 23.161, all the uncleared swaps covered by that agreement are subject to the requirements of §§ 23.15… | ||||
| 17:17:1.0.1.1.22.3.7.13 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.154 Calculation of initial margin. | CFTC | [81 FR 695, Jan. 6, 2016, as amended at 86 FR 246, Jan. 5, 2021] | (a) Means of calculation. (1) Each business day each covered swap entity shall calculate an initial margin amount to be collected from each covered counterparty using: (i) A risk-based model that meets the requirements of paragraph (b) of this section; or (ii) The table-based method set forth in paragraph (c) of this section. (2) Each business day each covered swap entity shall calculate an initial margin amount to be posted with each financial end user with material swaps exposure using: (i) A risk-based model that meets the requirements of paragraph (b) of this section; or (ii) The table-based method set forth in paragraph (c) of this section. (3) Each covered swap entity may reduce the amounts calculated pursuant to paragraphs (a)(1) and (2) of this section by the initial margin threshold amount provided that the reduction does not include any portion of the initial margin threshold amount already applied by the covered swap entity or its margin affiliates in connection with other uncleared swaps with the counterparty or its margin affiliates. (4) The amounts calculated pursuant to paragraph (a)(3) of this section shall not be less than zero. (5) A covered swap entity would be deemed to calculate initial margin as required by paragraph (a)(1) of this section if it uses the amount of initial margin calculated by a counterparty that is a swap entity and the initial margin amount is calculated using the swap entity's risk-based model that meets the requirements of paragraph (b) of this section or is approved by a prudential regulator, provided that initial margin calculated in such manner is used only with respect to uncleared swaps entered into by the covered swap entity and the swap entity for the purpose of hedging the covered swap entity's swaps with non-swap entity counterparties. (b) Risk-based models —(1) Commission or registered futures association approval. (i) A covered swap entity shall obtain the written approval of the Commission or a registered futures association to use a model to cal… | ||||
| 17:17:1.0.1.1.22.3.7.14 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.155 Calculation of variation margin. | CFTC | (a) Means of calculation. (1) Each business day each covered swap entity shall calculate variation margin for itself and for each counterparty that is a swap entity or a financial end user using methods, procedures, rules, and inputs that to the maximum extent practicable rely on recently-executed transactions, valuations provided by independent third parties, or other objective criteria. (2) Each covered swap entity shall have in place alternative methods for determining the value of an uncleared swap in the event of the unavailability or other failure of any input required to value a swap. (b) Control mechanisms. (1) Each covered swap entity shall create and maintain documentation setting forth the variation methodology with sufficient specificity to allow the counterparty, the Commission, the registered futures association, and any applicable prudential regulator to calculate a reasonable approximation of the margin requirement independently. (2) Each covered swap entity shall evaluate the reliability of its data sources at least annually, and make adjustments, as appropriate. (3) The Commission or the registered futures association at any time may require a covered swap entity to provide further data or analysis concerning the methodology or a data source, including: (i) An explanation of the manner in which the methodology meets the requirements of this section; (ii) A description of the mechanics of the methodology; (iii) The conceptual basis of the methodology; (iv) The empirical support for the methodology; and (v) The empirical support for the assessment of the data sources. | |||||
| 17:17:1.0.1.1.22.3.7.15 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.156 Forms of margin. | CFTC | [81 FR 695, Jan. 6, 2016, as amended at 82 FR 56169, Nov. 28, 2017] | (a) Initial margin —(1) Eligible collateral. A covered swap entity shall collect and post as initial margin for trades with a covered counterparty only the following types of collateral: (i) Immediately available cash funds denominated in: (A) U.S. dollars; (B) A major currency; (C) A currency of settlement for the uncleared swap; (ii) A security that is issued by, or unconditionally guaranteed as to the timely payment of principal and interest by, the U.S. Department of Treasury; (iii) A security that is issued by, or unconditionally guaranteed as to the timely payment of principal and interest by, a U.S. government agency (other than the U.S. Department of Treasury) whose obligations are fully guaranteed by the full faith and credit of the U.S. government; (iv) A security that is issued by, or fully guaranteed as to the payment of principal and interest by, the European Central Bank or a sovereign entity that is assigned no higher than a 20 percent risk weight under the capital rules applicable to swap dealers subject to regulation by a prudential regulator; (v) A publicly traded debt security issued by, or an asset-backed security fully guaranteed as to the timely payment of principal and interest by, a U.S. Government-sponsored enterprise that is operating with capital support or another form of direct financial assistance received from the U.S. government that enables the repayments of the U.S. Government-sponsored enterprise's eligible securities; (vi) A security that is issued by, or fully guaranteed as to the payment of principal and interest by, the Bank for International Settlements, the International Monetary Fund, or a multilateral development bank; (vii) Other publicly-traded debt that has been deemed acceptable as initial margin by a prudential regulator; (viii) A publicly traded common equity security that is included in: (A) The Standard & Poor's Composite 1500 Index or any other similar index of liquid and readily marketable equity securities as determined by the Commission; or (B… | ||||
| 17:17:1.0.1.1.22.3.7.16 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.157 Custodial arrangements. | CFTC | [81 FR 695, Jan. 6, 2016, as amended at 85 FR 27678, May 11, 2020] | (a) Initial margin posted by covered swap entities. Each covered swap entity that posts initial margin with respect to an uncleared swap shall require that all funds or other property that the covered swap entity provides as initial margin be held by one or more custodians that are not the covered swap entity, the counterparty, or margin affiliates of the covered swap entity or the counterparty. (b) Initial margin collected by covered swap entities. Each covered swap entity that collects initial margin required by § 23.152 with respect to an uncleared swap shall require that such initial margin be held by one or more custodians that are not the covered swap entity, the counterparty, or margin affiliates of the covered swap entity or the counterparty. (c) Custodial agreement. Each covered swap entity shall enter into an agreement with each custodian that holds funds pursuant to paragraphs (a) or (b) of this section that: (1) Prohibits the custodian from rehypothecating, repledging, reusing, or otherwise transferring (through securities lending, securities borrowing, repurchase agreement, reverse repurchase agreement or other means) the collateral held by the custodian except that cash collateral may be held in a general deposit account with the custodian if the funds in the account are used to purchase an asset described in § 23.156(a)(1)(ii) through (x), such asset is held in compliance with this section, and such purchase takes place within a time period reasonably necessary to consummate such purchase after the cash collateral is posted as initial margin; and (2) Is a legal, valid, binding, and enforceable agreement under the laws of all relevant jurisdictions including in the event of bankruptcy, insolvency, or a similar proceeding. (3) Notwithstanding paragraph (c)(1) of this section, a custody agreement may permit the posting party to substitute or direct any reinvestment of posted collateral held by the custodian, provided that, with respect to collateral posted or collected pursuant to § 23.152,… | ||||
| 17:17:1.0.1.1.22.3.7.17 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.158 Margin documentation. | CFTC | [81 FR 695, Jan. 6, 2016, as amended at 86 FR 6858, Jan. 25, 2021] | (a) General requirement. Each covered swap entity shall execute documentation with each counterparty that complies with the requirements of § 23.504 and that complies with this section, as applicable. For uncleared swaps between a covered swap entity and a counterparty that is a swap entity or a financial end user, the documentation shall provide the covered swap entity with the contractual right and obligation to exchange initial margin and variation margin in such amounts, in such form, and under such circumstances as are required by §§ 23.150 through 23.161. With respect to the minimum transfer amount, if a covered swap entity and a counterparty that is a swap entity or a financial end user agree to have separate minimum transfer amounts for initial and variation margin, the documentation shall specify the amounts to be allocated for initial margin and variation margin. Such amounts, on a combined basis, must not exceed the minimum transfer amount, as the term is defined in § 23.151. (b) Contents of the documentation. The margin documentation shall: (1) Specify the methods, procedures, rules, inputs, and data sources to be used for determining the value of uncleared swaps for purposes of calculating variation margin; (2) Describe the methods, procedures, rules, inputs, and data sources to be used to calculate initial margin for uncleared swaps entered into between the covered swap entity and the counterparty; and (3) Specify the procedures by which any disputes concerning the valuation of uncleared swaps, or the valuation of assets collected or posted as initial margin or variation margin may be resolved. | ||||
| 17:17:1.0.1.1.22.3.7.18 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.159 Special rules for affiliates. | CFTC | (a) Initial margin. (1) Except as provided in paragraph (c) of this section, a covered swap entity shall not be required to collect initial margin from a margin affiliate provided that the covered swap entity meets the following conditions: (i) The swaps are subject to a centralized risk management program that is reasonably designed to monitor and to manage the risks associated with the inter-affiliate swaps; and (ii) The covered swap entity exchanges variation margin with the margin affiliate in accordance with paragraph (b) of this section. (2)(i) A covered swap entity shall post initial margin to any margin affiliate that is a swap entity subject to the rules of a Prudential Regulator in an amount equal to the amount that the swap entity is required to collect from the covered swap entity pursuant to the rules of the Prudential Regulator. (ii) A covered swap entity shall not be required to post initial margin to any other margin affiliate pursuant to §§ 23.150 through 23.161. (b) Variation margin. Each covered swap entity shall post and collect variation margin with each margin affiliate that is a swap entity or a financial end user in accordance with all applicable provisions of §§ 23.150 through 23.161. (c) Foreign margin affiliates. (1) For purposes of this section, the term outward facing margin affiliate means a margin affiliate that enters into swaps with third parties. (2) Except as provided in paragraph (c)(3) of this section, each covered swap entity shall collect initial margin in accordance with all applicable provisions of §§ 23.150 through 23.161 from each margin affiliate that meets the following criteria: (i) The margin affiliate is a financial end user; (ii) The margin affiliate enters into swaps with third parties, or enters into swaps with any other margin affiliate that, directly or indirectly (including through a series of transactions), enters into swaps with third parties, for which the provisions of §§ 23.150 through 23.161 would apply if any such margin affiliate were a … | |||||
| 17:17:1.0.1.1.22.3.7.19 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.160 Cross-border application. | CFTC | [81 FR 34847, May 31, 2016, as amended at 89 FR 71810, Sept. 4, 2024] | (a) Definitions. For purposes of this section only: (1) Foreign Consolidated Subsidiary means a non-U.S. CSE in which an ultimate parent entity that is a U.S. person has a controlling financial interest, in accordance with U.S. GAAP, such that the U.S. ultimate parent entity includes the non-U.S. CSE's operating results, financial position and statement of cash flows in the U.S. ultimate parent entity's consolidated financial statements, in accordance with U.S. GAAP. (2) Guarantee means an arrangement pursuant to which one party to an uncleared swap has rights of recourse against a guarantor, with respect to its counterparty's obligations under the uncleared swap. For these purposes, a party to an uncleared swap has rights of recourse against a guarantor if the party has a conditional or unconditional legally enforceable right to receive or otherwise collect, in whole or in part, payments from the guarantor with respect to its counterparty's obligations under the uncleared swap. In addition, in the case of any arrangement pursuant to which the guarantor has a conditional or unconditional legally enforceable right to receive or otherwise collect, in whole or in part, payments from any other guarantor with respect to the counterparty's obligations under the uncleared swap, such arrangement will be deemed a guarantee of the counterparty's obligations under the uncleared swap by the other guarantor. (3) International standards mean the margin policy framework for non-cleared, bilateral derivatives issued by the Basel Committee on Banking Supervision and the International Organization of Securities in September 2013, as subsequently updated, revised, or otherwise amended, or any other international standards, principles or guidance relating to margin requirements for non-cleared, bilateral derivatives that the Commission may in the future recognize, to the extent that they are consistent with United States law (including the margin requirements in the Commodity Exchange Act). (4) Non-U.S. CSE means a cov… | ||||
| 17:17:1.0.1.1.22.3.7.2 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.101 Minimum financial requirements for swap dealers and major swap participants. | CFTC | [85 FR 57548, Sept. 15, 2020, as amended at 89 FR 45586, May 23, 2024] | (a)(1) Except as provided in paragraphs (a)(2) through (a)(5) of this section, each swap dealer must elect to be subject to the minimum capital requirements set forth in either paragraphs (a)(1)(i) or (a)(1)(ii) of this section: (i) A swap dealer that elects to meet the capital requirements in this paragraph (a)(1)(i) must at all times maintain regulatory capital that meets the following: (A) $20 million of common equity tier 1 capital, as defined under the bank holding company regulations in 12 CFR 217.20, as if the swap dealer itself were a bank holding company subject to 12 CFR part 217; (B) An aggregate of common equity tier 1 capital, additional tier 1 capital, and tier 2 capital, all as defined under the bank holding company regulations in 12 CFR 217.20, equal to or greater than eight percent of the swap dealer's BHC equivalent risk-weighted assets; provided, however, that the swap dealer must maintain a minimum of common equity tier 1 capital equal to six point five percent of its BHC equivalent risk-weighted assets; provided further, that any capital that is subordinated debt under 12 CFR 217.20 and that is included in the swap dealer's capital for purposes of this paragraph (a)(1)(i)(B) must qualify as subordinated debt under § 240.18a-1d of this title in accordance with a qualification determination of the Commission or a registered futures association of which the swap dealer is a member; (C) An aggregate of common equity tier 1 capital, additional tier 1 capital, and tier 2 capital, all as defined under the bank holding company regulations in 12 CFR 217.20, equal to or greater than eight percent of the amount of uncleared swap margin, as that term is defined in § 23.100 of this part, for each uncleared swap position open on the books of the swap dealer, computed on a counterparty by counterparty basis pursuant to § 23.154 of this part; and (D) The amount of capital required by a registered futures association of which the swap dealer is a member. (ii)(A) A swap dealer that elects to meet the… | ||||
| 17:17:1.0.1.1.22.3.7.20 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.161 Compliance dates. | CFTC | [81 FR 695, Jan. 6, 2016, as amended at 83 FR 60346, Nov. 26, 2018; 84 FR 12071, Apr. 1, 2019; 85 FR 19882, Apr. 9, 2020; 85 FR 41352, July 10, 2020; 85 FR 71251, Nov. 9, 2020] | (a) Covered swap entities shall comply with the minimum margin requirements for uncleared swaps on or before the following dates for uncleared swaps entered into on or after the following dates: (1) September 1, 2016 for the requirements in § 23.152 for initial margin and in § 23.153 for variation margin for any uncleared swaps where both— (i) The covered swap entity combined with all its margin affiliates; and (ii) Its counterparty combined with all its margin affiliates, have an average daily aggregate notional amount of uncleared swaps, uncleared security-based swaps, foreign exchange forwards, and foreign exchange swaps in March, April, and May 2016 that exceeds $3 trillion, where such amounts are calculated only for business days; and where (iii) In calculating the amounts in paragraphs (a)(1)(i) and (ii) of this section, an entity shall count the average daily notional amount of an uncleared swap, an uncleared security-based swap, a foreign-exchange forward, or a foreign exchange swap between the entity and a margin affiliate only one time and shall not count a swap that is exempt pursuant to § 23.150(b) or a security-based swap that is exempt pursuant to section 15F(e) of the Securities Exchange Act of 1934 (15 U.S.C. 78o-10(e)). (2) March 1, 2017 for the requirements in § 23.153 for variation margin for any other covered swap entity for uncleared swaps entered into with any other counterparty. (3) September 1, 2017 for the requirements in § 23.152 for initial margin for any uncleared swaps where both— (i) The covered swap entity combined with all its margin affiliates; and (ii) Its counterparty combined with all its margin affiliates, have an average daily aggregate notional amount of uncleared swaps, uncleared security-based swaps, foreign exchange forwards, and foreign exchange swaps in March, April, and May 2017 that exceeds $2.25 trillion, where such amounts are calculated only for business days; and where (iii) In calculating the amounts in paragraphs (a)(3)(i) and (ii) of this section, an e… | ||||
| 17:17:1.0.1.1.22.3.7.21 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | §§ 23.162-23.199 [Reserved] | CFTC | ||||||
| 17:17:1.0.1.1.22.3.7.3 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.102 Calculation of market risk exposure requirement and credit risk exposure requirement using internal models. | CFTC | [85 FR 57550, Sept. 15, 2020, as amended at 89 FR 45586, May 23, 2024; 89 FR 71810, Sept. 4, 2024] | (a) A swap dealer may apply to the Commission or to a registered futures association of which the swap dealer is a member to obtain approval to use internal models under terms and conditions required by the Commission or the registered futures association and by these regulations, when calculating the swap dealer's market risk exposure and credit risk exposure under §§ 23.101(a)(1)(i)(B), 23.101(a)(1)(ii)(A), or 23.101(a)(2)(ii)(A); Provided however, that the Commission must issue a determination that the registered futures association's model requirements and review process are comparable to the Commission's requirements and review process in order for the registered futures association's model approval to be accepted as an alternative means of compliance with this section. (b) The swap dealer's application to use internal models to compute market risk exposure and credit risk exposure must be in writing and must be filed with the Commission and with a registered futures association of which the swap dealer is a member. The swap dealer must file the application in accordance with instructions established by the Commission and the registered futures association. (c) A swap dealer's application must include the following: (1) In the case of a swap dealer subject to the minimum capital requirements in § 23.101(a)(1)(i) applying to use internal models to compute market risk exposure, the information required under subpart F of 12 CFR part 217, as if the swap dealer were itself a bank holding company subject to 12 CFR part 217. (2) In the case of a swap dealer subject to the minimum capital requirements in § 23.101(a)(1)(i) applying to use internal models to compute credit risk exposure, the information required under subpart E of 12 CFR part 217 in order to calculate credit risk-weighted assets in accordance with sections 217.131 through 217.155 of that subpart, as if the swap dealer were itself a bank holding company subject to 12 CFR part 217. (3) In the case of a swap dealer subject to the minimum capital … | ||||
| 17:17:1.0.1.1.22.3.7.4 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.103 Calculation of market risk exposure requirement and credit risk requirement when models are not approved. | CFTC | [85 FR 57551, Sept. 15, 2020, as amended at 89 FR 45586, May 23, 2024] | (a) Non-model approach. A swap dealer that: (1) Computes its regulatory capital requirements under § 23.101(a)(1)(ii) or (a)(2), and (2) Either: (A) has not received approval from the Commission or from a registered futures association of which the swap dealer is a member to compute its market risk exposure requirement and/or credit risk exposure requirement pursuant to internal models under § 23.102, or (B) has had its approval to compute its market risk exposure requirement and/or credit risk exposure requirement pursuant to internal models under § 23.102 revoked by the Commission or registered futures association must compute its market risk exposure requirement and/or credit risk exposure requirement pursuant to paragraphs (b) and/or (c) of this section. (b) Market risk exposure requirements. (1) A swap dealer that computes its regulatory capital under § 23.101(a)(1)(ii) or (a)(2) shall compute a market risk capital charge for the positions that the swap dealer holds in its proprietary accounts using the applicable standardized market risk charges set forth in § 240.18a-1 of this title and § 1.17 of this chapter for such positions. (2) In computing its net capital under § 23.101(a)(1)(ii), a swap dealer shall deduct from its tentative net capital the sum of the market risk capital charges computed under paragraph (b)(1) of this section. (3) In computing its minimum capital requirement under § 23.101(a)(2), a swap dealer must add the amount of the market risk capital charge computed under this section to the $20 million minimum capital requirement. (c) Credit risk charges. (1) A swap dealer that computes regulatory capital under § 23.101(a)(1)(ii) or (a)(2) shall compute counterparty credit risk charges using the applicable standardized credit risk charges set forth in § 240.18a-1 of this title and § 1.17 of this chapter for such positions. (2) In computing its net capital under § 23.101(a)(1)(ii), a swap dealer shall reduce its tentative net capital by the sum of the counterparty credit risk … | ||||
| 17:17:1.0.1.1.22.3.7.5 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.104 Equity Withdrawal Restrictions. | CFTC | [85 FR 57551, Sept. 15, 2020] | (a) Equity withdrawal restrictions. The capital of a swap dealer, including the capital of any affiliate or subsidiary whose liabilities or obligations are guaranteed, endorsed, or assumed by the swap dealer may not be withdrawn by action of the swap dealer or its equity holders, or by redemption of shares of stock by the swap dealer or by such affiliates or subsidiaries, or through the payment of dividends or any similar distribution, nor may any unsecured advance or loan be made to an equity holder or employee if, after giving effect thereto and to any other such withdrawals, advances, or loans which are scheduled to occur within six months following such withdrawal, advance or loan, the swap dealer's regulatory capital is less than 120 percent of the minimum regulatory capital required under § 23.101 of this part. The equity withdrawal restrictions, however, do not preclude a swap dealer from making required tax payments or from paying reasonable compensation to equity holders. The Commission may, upon application by the swap dealer, grant relief from this paragraph (a) if the Commission deems such relief to be in the public interest. (b) Temporary equity withdrawal restrictions by Commission order. (1) The Commission may by order restrict, for a period of up to twenty business days, any withdrawal by a swap dealer of capital or any unsecured loan or advance to a stockholder, partner, member, employee or affiliate under such terms and conditions as the Commission deems appropriate in the public interest if the Commission, based on the information available, concludes that such withdrawal, loan or advance may be detrimental to the financial integrity of the swap dealer, or may unduly jeopardize the swap dealer's ability to meet its financial obligations to counterparties or to pay other liabilities which may cause a significant impact on the markets or expose the counterparties and creditors of the swap dealer to loss. (2) An order temporarily prohibiting the withdrawal of capital shall be rescinded if th… | ||||
| 17:17:1.0.1.1.22.3.7.6 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.105 Financial recordkeeping, reporting and notification requirements for swap dealers and major swap participants. | CFTC | [85 FR 57551, Sept. 15, 2020, as amended at 89 FR 45586, May 23, 2024] | (a) Scope. (1) Except as provided in paragraphs (a)(2) and (a)(3) of this section, a swap dealer or major swap participant must comply with the applicable requirements set forth in paragraphs (b) through (p) of this section. (2) The requirements in paragraphs (b) through (o) of this section do not apply to any swap dealer or major swap participant that is subject to the capital requirements of a prudential regulator. (3) The requirements in paragraph (p) of this section do not apply to any swap dealer or major swap participant that is subject to the capital requirements of the Commission. (b) Current books and records. A swap dealer or major swap participant shall prepare and keep current ledgers or other similar records which show or summarize, with appropriate references to supporting documents, each transaction affecting its asset, liability, income, expense, and capital accounts, and in which all its asset, liability, and capital accounts are classified in accordance with U.S. generally accepted accounting principles, and as otherwise may be necessary for the capital calculations required under § 23.101 of this part: Provided, however, that a swap dealer or major swap participant that is not otherwise required to prepare financial statements in accordance with U.S. generally accepted accounting principles, may prepare and keep records required by this section in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board. Such records must be maintained in accordance with § 1.31 of this chapter. (c) Notices. (1) A swap dealer or major swap participant who knows or should have known that its regulatory capital at any time is less than the minimum required by § 23.101 of this part, must: (i) Provide immediate written notice to the Commission and to the registered futures association of which it is a member that the swap dealer's or major swap participant's regulatory capital is less than that required by § 23.101 of this part; and (ii) Provide… | ||||
| 17:17:1.0.1.1.22.3.7.7 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.106 Substituted compliance for swap dealer's and major swap participant's capital and financial reporting. | CFTC | [85 FR 57556, Sept. 15, 2020] | (a)(1) Eligibility requirements. The following persons may, either individually or collectively, request a Capital Comparability Determination with respect to the Commission's capital adequacy and financial reporting requirements for swap dealers or major swap participants: (i) A swap dealer or major swap participant that is eligible for substituted compliance under § 23.101 or a trade association or other similar group on behalf of its members who are swap dealers or major swap participants; or (ii) A foreign regulatory authority that has direct supervisory authority over one or more swap dealers or major swap participants that are eligible for substituted compliance under § 23.101, and such foreign regulatory authority is responsible for administering the relevant foreign jurisdiction's capital adequacy and financial reporting requirements over the swap dealer or major swap participant. (2) Submission requirements. A person requesting a Capital Comparability Determination must electronically submit to the Commission: (i) A description of the objectives of the relevant foreign jurisdiction's capital adequacy and financial reporting requirements over entities that are subject to the Commission's capital adequacy and financial reporting requirements in this part; (ii) A description (including specific legal and regulatory provisions) of how the relevant foreign jurisdiction's capital adequacy and financial reporting requirements address the elements of the Commission's capital adequacy and financial reporting requirements for swap dealers and major swap participants, including, at a minimum, the methodologies for establishing and calculating capital adequacy requirements and whether such methodologies comport with any international standards, including Basel-based capital requirements for banking institutions; and (iii) A description of the ability of the relevant foreign regulatory authority or authorities to supervise and enforce compliance with the relevant foreign jurisdiction's capital adequacy and … | ||||
| 17:17:1.0.1.1.22.3.7.8 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | §§ 23.107-23.149 [Reserved] | CFTC | ||||||
| 17:17:1.0.1.1.22.3.7.9 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | E | Subpart E—Capital and Margin Requirements for Swap Dealers and Major Swap Participants | § 23.150 Scope. | CFTC | (a) The margin requirements set forth in §§ 23.150 through 23.161 shall apply to uncleared swaps, as defined in § 23.151, that are executed after the applicable compliance dates set forth in § 23.161. (b) The requirements set forth in §§ 23.150 through 23.161 shall not apply to a swap if the counterparty: (1) Qualifies for an exception from clearing under section 2(h)(7)(A) of the Act and implementing regulations; (2) Qualifies for an exemption from clearing under a rule, regulation, or order issued by the Commission pursuant to section 4(c)(1) of the Act concerning cooperative entities that would otherwise be subject to the requirements of section 2(h)(1)(A) of the Act; or (3) Satisfies the criteria in section 2(h)(7)(D) of the Act and implementing regulations. | |||||
| 17:17:1.0.1.1.22.4.7.1 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | F | Subpart F—Reporting, Recordkeeping, and Daily Trading Records Requirements for Swap Dealers and Major Swap Participants | § 23.200 Definitions. | CFTC | For purposes of subpart F, the following terms shall be defined as provided. (a) Business trading unit means any department, division, group, or personnel of a swap dealer or major swap participant or any of its affiliates, whether or not identified as such, that performs, or exercises supervisory authority over the performance of, any pricing (excluding price verification for risk management purposes), trading, sales, purchasing, marketing, advertising, solicitation, structuring, or brokerage activities on behalf of a registrant. (b) Clearing unit means any department, division, group, or personnel of a registrant or any of its affiliates, whether or not identified as such, that performs any proprietary or customer clearing activities on behalf of a registrant. (c) Complaint means any formal or informal complaint, grievance, criticism, or concern communicated to the swap dealer or major swap participant in any format relating to, arising from, or in connection with, any trading conduct or behavior or with the swap dealer or major swap participant's performance (or failure to perform) any of its regulatory obligations, and includes any and all observations, comments, remarks, interpretations, clarifications, notes, and examinations as to such conduct or behavior communicated or documented by the complainant, swap dealer, or major swap participant. (d) Executed means the completion of the execution process. (e) Execution means, with respect to a swap, an agreement by the parties (whether orally, in writing, electronically, or otherwise) to the terms of a swap that legally binds the parties to such swap terms under applicable law. (f) Governing body. This term means: (1) A board of directors; (2) A body performing a function similar to a board of directors; (3) Any committee of a board or body; or (4) The chief executive officer of a registrant, or any such board, body, committee, or officer of a division of a registrant, provided that the registrant's swaps activities for which registration w… | |||||
| 17:17:1.0.1.1.22.4.7.2 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | F | Subpart F—Reporting, Recordkeeping, and Daily Trading Records Requirements for Swap Dealers and Major Swap Participants | § 23.201 Required records. | CFTC | (a) Transaction and position records. Each swap dealer and major swap participant shall keep full, complete, and systematic records, together with all pertinent data and memoranda, of all its swaps activities. Such records shall include: (1) Transaction records. Records of each transaction, including all documents on which transaction information is originally recorded. Such records shall be kept in a form and manner identifiable and searchable by transaction and by counterparty, and shall include: (i) All documents customarily generated in accordance with market practice that demonstrate the existence and nature of an order or transaction, including, but not limited to, records of all orders (filled, unfilled, or cancelled); correspondence; journals; memoranda; ledgers; confirmations; risk disclosure documents; statements of purchase and sale; contracts; invoices; warehouse receipts; documents of title; and (ii) The daily trading records required to be kept in accordance with § 23.202. (2) Position records. Records of each position held by each swap dealer and major swap participant, identified by product and counterparty, including records reflecting whether each position is “long” or “short” and whether the position is cleared. Position records shall be linked to transaction records in a manner that permits identification of the transactions that established the position. (3) Records of transactions executed on a swap execution facility or designated contract market or cleared by a derivatives clearing organization. Records of each transaction executed on a swap execution facility or designated contract market or cleared by a derivatives clearing organization maintained in compliance with the Act and Commission regulations. (b) Business records. Each swap dealer and major swap participant shall keep full, complete, and systematic records of all activities related to its business as a swap dealer or major swap participant, including but not limited to: (1) Governance. (i) Minutes of meetings … | |||||
| 17:17:1.0.1.1.22.4.7.3 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | F | Subpart F—Reporting, Recordkeeping, and Daily Trading Records Requirements for Swap Dealers and Major Swap Participants | § 23.202 Daily trading records. | CFTC | [77 FR 20202, Apr. 3, 2012, as amended at 88 FR 8753, Feb. 10, 2023] | (a) Daily trading records for swaps. Each swap dealer and major swap participant shall make and keep daily trading records of all swaps it executes, including all documents on which transaction information is originally recorded. Each swap dealer and major swap participant shall ensure that its records include all information necessary to conduct a comprehensive and accurate trade reconstruction for each swap. Each swap dealer and major swap participant shall maintain each transaction record in a manner identifiable and searchable by transaction and counterparty. (1) Pre-execution trade information. Each swap dealer and major swap participant shall make and keep pre-execution trade information, including, at a minimum, records of all oral and written communications provided or received concerning quotes, solicitations, bids, offers, instructions, trading, and prices, that lead to the execution of a swap, whether communicated by telephone, voicemail, facsimile, instant messaging, chat rooms, electronic mail, mobile device, or other digital or electronic media. Such records shall include, but are not limited to: (i) Reliable timing data for the initiation of the trade that would permit complete and accurate trade reconstruction; and (ii) A record of the date and time, to the nearest minute, using Coordinated Universal Time (UTC), by timestamp or other timing device, for each quotation provided to, or received from, the counterparty prior to execution. (2) Execution trade information. Each swap dealer and major swap participant shall make and keep trade execution records, including: (i) All terms of each swap, including all terms regarding payment or settlement instructions, initial and variation margin requirements, option premiums, payment dates, and any other cash flows; (ii) The trade ticket for each swap (which, together with the time of execution of each swap, shall be immediately recorded electronically for further processing); (iii) The unique transaction identifier, as required by § 45.5 of thi… | ||||
| 17:17:1.0.1.1.22.4.7.4 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | F | Subpart F—Reporting, Recordkeeping, and Daily Trading Records Requirements for Swap Dealers and Major Swap Participants | § 23.203 Records; retention and inspection. | CFTC | [77 FR 20202, Apr. 3, 2012, as amended at 82 FR 24487, May 30, 2017] | (a) Location of records —(1) Records. All records required to be kept by a swap dealer or major swap participant by the Act and by Commission regulations shall be kept at the principal place of business of the swap dealer or major swap participant or such other principal office as shall be designated by the swap dealer or major swap participant. If the principal place of business is outside of the United States, its territories or possessions, then upon the request of a Commission representative, the swap dealer or major swap participant must provide such records as requested at the place in the United States, its territories, or possessions designated by the representative within 72 hours after receiving the request. (2) Contact information. Each swap dealer and major swap participant shall maintain for each of its offices a listing, by name or title, of each person at that office who, without delay, can explain the types of records the swap dealer or major swap participant maintains at that office and the information contained in those records. (b) Record retention. (1) The records required to be maintained by this chapter shall be maintained in accordance with the provisions of § 1.31 of this chapter, except as provided in paragraph (b)(3) of this section. All such records shall be open to inspection by any representative of the Commission, the United States Department of Justice, or any applicable prudential regulator. Records relating to swaps defined in section 1a(47)(A)(v) shall be open to inspection by any representative of the Commission, the United States Department of Justice, the Securities and Exchange Commission, or any applicable prudential regulator. (2) [Reserved] (3) Records of any swap data reported in accordance with part 45 of this chapter shall be maintained in accordance with the requirements of § 45.2 of this chapter. | ||||
| 17:17:1.0.1.1.22.4.7.5 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | F | Subpart F—Reporting, Recordkeeping, and Daily Trading Records Requirements for Swap Dealers and Major Swap Participants | § 23.204 Reports to swap data repositories. | CFTC | (a) Reporting of swap transaction data to swap data repositories. Each swap dealer and major swap participant shall report all information and data in accordance with part 45 of this chapter. (b) Electronic reporting of swap transaction data. Each swap dealer and major swap participant shall have the electronic systems and procedures necessary to transmit electronically all information and data required to be reported in accordance with part 45 of this chapter. | |||||
| 17:17:1.0.1.1.22.4.7.6 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | F | Subpart F—Reporting, Recordkeeping, and Daily Trading Records Requirements for Swap Dealers and Major Swap Participants | § 23.205 Real-time public reporting. | CFTC | [77 FR 20202, Apr. 3, 2012, as amended at 88 FR 8753, Feb. 10, 2023] | (a) Real-time public reporting of swap transaction and pricing data. Each swap dealer and major swap participant shall report all information and swap transaction and pricing data required to be reported in accordance with the real-time public reporting requirements in part 43 of this chapter. (b) Electronic reporting of swap transaction data. Each swap dealer and major swap participant shall have the electronic systems and procedures necessary to transmit electronically all information and data required to be reported in accordance with part 43 of this chapter. | ||||
| 17:17:1.0.1.1.22.4.7.7 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | F | Subpart F—Reporting, Recordkeeping, and Daily Trading Records Requirements for Swap Dealers and Major Swap Participants | § 23.206 Delegation of authority to the Director of the Market Participants Division to establish an alternative compliance schedule to comply with daily trading records. | CFTC | [77 FR 20202, Apr. 3, 2012, as amended at 89 FR 71810, Sept. 4, 2024] | (a) The Commission hereby delegates to the Director of the Market Participants Division or such other employee or employees as the Director may designate, the authority to establish an alternative compliance schedule for requirements of § 23.202 that are found to be technologically or economically impracticable for an affected swap dealer or major swap participant that seeks, in good faith, to comply with the requirements of § 23.202 within a reasonable time period beyond the date on which compliance by such swap dealer or major swap participant is otherwise required. (b) A request for an alternative compliance schedule under this section shall be acted upon by the Director of the Market Participants Division within 30 days from the time such a request is received, or it shall be deemed approved. (c) Relief granted under this section shall not cause a registrant to be out of compliance or deemed in violation of any registration requirements. (d) Notwithstanding any other provision of this section, in any case in which a Commission employee delegated authority under this section believes it appropriate, he or she may submit to the Commission for its consideration the question of whether an alternative compliance schedule should be established. Nothing in this section shall be deemed to prohibit the Commission, at its election, from exercising the authority delegated in this section. | ||||
| 17:17:1.0.1.1.22.5.7.1 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | § 23.400 Scope. | CFTC | The sections of this subpart shall apply to swap dealers and, unless otherwise indicated, major swap participants. These rules are not intended to limit or restrict the applicability of other provisions of the Act and rules and regulations thereunder, or other applicable laws, rules and regulations. The provisions of this subpart shall apply in connection with transactions in swaps as well as in connection with swaps that are offered but not entered into. | |||||
| 17:17:1.0.1.1.22.5.7.10 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | § 23.433 Communications—fair dealing. | CFTC | With respect to any communication between a swap entity and any counterparty, the swap entity shall communicate in a fair and balanced manner based on principles of fair dealing and good faith. | |||||
| 17:17:1.0.1.1.22.5.7.11 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | § 23.434 Recommendations to counterparties—institutional suitability. | CFTC | (a) Requirements. A swap dealer that recommends a swap or trading strategy involving a swap to a counterparty, other than a swap entity, security-based swap dealer, or major security-based swap participant, must: (1) Undertake reasonable diligence to understand the potential risks and rewards associated with the recommended swap or trading strategy involving a swap; and (2) Have a reasonable basis to believe that the recommended swap or trading strategy involving a swap is suitable for the counterparty. To establish a reasonable basis for a recommendation, a swap dealer must have or obtain information about the counterparty, including the counterparty's investment profile, trading objectives, and ability to absorb potential losses associated with the recommended swap or trading strategy involving a swap. (b) Safe harbor. A swap dealer may fulfill its obligations under paragraph (a)(2) of this section with respect to a particular counterparty if: (1) The swap dealer reasonably determines that the counterparty, or an agent to which the counterparty has delegated decision-making authority, is capable of independently evaluating investment risks with regard to the relevant swap or trading strategy involving a swap; (2) The counterparty or its agent represents in writing that it is exercising independent judgment in evaluating the recommendations of the swap dealer with regard to the relevant swap or trading strategy involving a swap; (3) The swap dealer discloses in writing that it is acting in its capacity as a counterparty and is not undertaking to assess the suitability of the swap or trading strategy involving a swap for the counterparty; and (4) In the case of a counterparty that is a Special Entity, the swap dealer complies with § 23.440 where the recommendation would cause the swap dealer to act as an advisor to a Special Entity within the meaning of § 23.440(a). (c) Written representations. A swap dealer will satisfy the requirements of paragraph (b)(1) of this section if it receives written rep… | |||||
| 17:17:1.0.1.1.22.5.7.12 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | §§ 23.435-23.439 [Reserved] | CFTC | ||||||
| 17:17:1.0.1.1.22.5.7.13 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | § 23.440 Requirements for swap dealers acting as advisors to Special Entities. | CFTC | (a) Acts as an advisor to a Special Entity. For purposes of this section, a swap dealer “acts as an advisor to a Special Entity” when the swap dealer recommends a swap or trading strategy involving a swap that is tailored to the particular needs or characteristics of the Special Entity. (b) Safe harbors. A swap dealer will not “act as an advisor to a Special Entity” within the meaning of paragraph (a) of this section if: (1) With respect to a Special Entity that is an employee benefit plan as defined in § 23.401(h)(3): (i) The Special Entity represents in writing that it has a fiduciary as defined in section 3 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002) that is responsible for representing the Special Entity in connection with the swap transaction; (ii) The fiduciary represents in writing that it will not rely on recommendations provided by the swap dealer; and (iii) The Special Entity represents in writing: (A) That it will comply in good faith with written policies and procedures reasonably designed to ensure that any recommendation the Special Entity receives from the swap dealer materially affecting a swap transaction is evaluated by a fiduciary before the transaction occurs; or (B) That any recommendation the Special Entity receives from the swap dealer materially affecting a swap transaction will be evaluated by a fiduciary before that transaction occurs; or (2) With respect to any Special Entity: (i) The swap dealer does not express an opinion as to whether the Special Entity should enter into a recommended swap or trading strategy involving a swap that is tailored to the particular needs or characteristics of the Special Entity; (ii) The Special Entity represents in writing that: (A) The Special Entity will not rely on recommendations provided by the swap dealer; and (B) The Special Entity will rely on advice from a qualified independent representative within the meaning of § 23.450; and (iii) The swap dealer discloses to the Special Entity that it is not under… | |||||
| 17:17:1.0.1.1.22.5.7.14 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | §§ 23.441-23.449 [Reserved] | CFTC | ||||||
| 17:17:1.0.1.1.22.5.7.15 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | § 23.450 Requirements for swap entities acting as counterparties to Special Entities. | CFTC | (a) Definitions. For purposes of this section: (1) The term “principal relationship” means where a swap entity is a principal of the representative of a Special Entity or the representative of a Special Entity is a principal of the swap entity. The term “principal” means any person listed in § 3.1(a)(1) through (3) of this chapter. (2) The term “statutory disqualification” means, with respect to a person that is not a registrant with the Commission, grounds for refusal to register or to revoke, condition, or restrict the registration of any registrant or applicant for registration as set forth in sections 8a(2) and 8a(3) of the Act, or, with respect to a person that is a registrant with the Commission, the Commission has refused registration or revoked, conditioned, or restricted the registration of such registrant or applicant for registration pursuant to sections 8a(2) or 8a(3) of the Act. (b) Reasonable basis. (1) Any swap entity that offers to enter or enters into a swap with a Special Entity, other than a Special Entity defined in § 23.401(h)(3), shall have a reasonable basis to believe that the Special Entity has a representative that: (i) Has sufficient knowledge to evaluate the transaction and risks; (ii) Is not subject to a statutory disqualification; (iii) Is independent of the swap entity; (iv) Undertakes a duty to act in the best interests of the Special Entity it represents; (v) Makes appropriate and timely disclosures to the Special Entity; (vi) Evaluates, consistent with any guidelines provided by the Special Entity, fair pricing and the appropriateness of the swap; and (vii) In the case of a Special Entity, as defined in § 23.401(h)(2) or (4), is subject to restrictions on certain political contributions imposed by the Commission, the Securities and Exchange Commission, or a self-regulatory organization subject to the jurisdiction of the Commission or the Securities and Exchange Commission; provided however, that this paragraph (b)(1)(vii) shall not apply if the representative is an … | |||||
| 17:17:1.0.1.1.22.5.7.16 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | § 23.451 Political contributions by certain swap dealers. | CFTC | (a) Definitions. For the purposes of this section: (1) The term “contribution” means any gift, subscription, loan, advance, or deposit of money or anything of value made: (i) For the purpose of influencing any election for federal, state, or local office; (ii) For payment of debt incurred in connection with any such election; or (iii) For transition or inaugural expenses incurred by the successful candidate for state or local office. (2) The term “covered associate” means: (i) Any general partner, managing member, or executive officer, or other person with a similar status or function; (ii) Any employee who solicits a governmental Special Entity for the swap dealer and any person who supervises, directly or indirectly, such employee; and (iii) Any political action committee controlled by the swap dealer or by any person described in paragraphs (a)(2)(i) and (a)(2)(ii) of this section. (3) The term “governmental Special Entity” means any Special Entity defined in § 23.401(h)(2) or (4). (4) The term “official” of a governmental Special Entity means any person (including any election committee for such person) who was, at the time of the contribution, an incumbent, candidate, or successful candidate for elective office of a governmental Special Entity, if the office: (i) Is directly or indirectly responsible for, or can influence the outcome of, the selection of a swap dealer by a governmental Special Entity; or (ii) Has authority to appoint any person who is directly or indirectly responsible for, or can influence the outcome of, the selection of a swap dealer by a governmental Special Entity. (5) The term “payment” means any gift, subscription, loan, advance, or deposit of money or anything of value. (6) The term “regulated person” means: (i) A person that is subject to restrictions on certain political contributions imposed by the Commission, the Securities and Exchange Commission, or a self-regulatory agency subject to the jurisdiction of the Commission or the Securities and Exchange Commission;… | |||||
| 17:17:1.0.1.1.22.5.7.2 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | § 23.401 Definitions. | CFTC | Solely for purposes of this subpart, the terms listed in this section have the meanings set forth below. (a) A-ITBC Swap. The term “Anonymous ITBC Swap” or “A-ITBC Swap” means an ITBC Swap (as defined in paragraph (d) of this section) where the swap entity does not know the identity of the counterparty prior to execution of the swap. An A-ITBC Swap may be executed bilaterally between the parties or may be executed on or pursuant to the rules of a designated contract market, swap execution facility, or a trading facility exempted from registration as a swap execution facility by the Commission pursuant to section 5h(g) of the Act. (b) Counterparty. The term “counterparty,” as appropriate in this subpart, includes any person who is a prospective party to a swap. (c) Covered Transaction. The term “Covered Transaction” means a swap, as defined in section 1a(47) of the Act and § 1.3 of this chapter (other than swaps subject to the clearing requirement of section 2(h)(1)(A) of the Act and part 50 of this chapter), and physically-settled foreign exchange forwards and swaps that have been exempted from the definition of swap by the U.S. Department of the Treasury. (d) ITBC Swap. The term “Intended to be Cleared Swap” or “ITBC Swap” means a swap that meets the following conditions, as applicable: (1) At least one of the parties to the swap is a swap entity; (2) The swap is of a type accepted for clearing by a derivatives clearing organization registered with the Commission (“DCO”) or a clearing organization that is currently exempted from registration by the Commission pursuant to section 5b(h) of the Act (“Exempt DCO”); (3) The swap is intended by the parties to be cleared contemporaneously with execution; (4) If the swap is intended to be cleared on a DCO, the swap entity and its counterparty are either clearing members of the DCO to which the swap will be submitted, or have entered into an agreement with a clearing member of such DCO for clearing of swaps of the same type as the swap intended to be clea… | |||||
| 17:17:1.0.1.1.22.5.7.3 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | § 23.402 General provisions. | CFTC | (a) Policies and procedures to ensure compliance and prevent evasion. (1) Swap entities shall have written policies and procedures reasonably designed to: (i) Ensure compliance with the requirements of this subpart; and (ii) Prevent a swap entity from evading or participating in or facilitating an evasion of any provision of the Act or any regulation promulgated thereunder. (2) Swap entities shall implement and monitor compliance with such policies and procedures as part of their supervision and risk management requirements specified in subpart J of this part. (b) Know your counterparty. Each swap dealer shall implement policies and procedures reasonably designed to obtain and retain a record of the essential facts concerning each counterparty whose identity is known to the swap dealer prior to the execution of the transaction that are necessary for conducting business with such counterparty. For purposes of this section, the essential facts concerning a counterparty are: (1) Facts required to comply with applicable laws, regulations and rules; (2) Facts required to implement the swap dealer's credit and operational risk management policies in connection with transactions entered into with such counterparty; and (3) Information regarding the authority of any person acting for such counterparty. (c) True name and owner. Each swap entity shall obtain and retain a record which shall show the true name and address of each counterparty whose identity is known to the swap entity prior to the execution of the transaction, the principal occupation or business of such counterparty as well as the name and address of any other person guaranteeing the performance of such counterparty and any person exercising any control with respect to the positions of such counterparty. (d) Reasonable reliance on representations. A swap entity may rely on the written representations of a counterparty to satisfy its due diligence requirements under this subpart, unless it has information that would cause a reasonable person… | |||||
| 17:17:1.0.1.1.22.5.7.4 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | §§ 23.403-23.409 [Reserved] | CFTC | ||||||
| 17:17:1.0.1.1.22.5.7.5 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | § 23.410 Prohibition on fraud, manipulation, and other abusive practices. | CFTC | (a) Prohibition. It shall be unlawful for a swap entity— (1) To employ any device, scheme, or artifice to defraud any Special Entity or prospective customer who is a Special Entity; (2) To engage in any transaction, practice, or course of business that operates as a fraud or deceit on any Special Entity or prospective customer who is a Special Entity; or (3) To engage in any act, practice, or course of business that is fraudulent, deceptive, or manipulative. (b) Affirmative defense. It shall be an affirmative defense to an alleged violation of paragraph (a)(2) or (3) of this section for failure to comply with any requirement in this subpart if a swap entity establishes that the swap entity: (1) Did not act intentionally or recklessly in connection with such alleged violation; and (2) Complied in good faith with written policies and procedures reasonably designed to meet the particular requirement that is the basis for the alleged violation. (c) Confidential treatment of counterparty information. (1) It shall be unlawful for any swap entity to: (i) Disclose to any other person any material confidential information provided by or on behalf of a counterparty to the swap entity; or (ii) Use for its own purposes in any way that would tend to be materially adverse to the interests of a counterparty, any material confidential information provided by or on behalf of a counterparty to the swap entity. (2) Notwithstanding paragraph (c)(1) of this section, a swap entity may disclose or use material confidential information provided by or on behalf of a counterparty to the swap entity if such disclosure or use is authorized in writing by the counterparty, or is necessary: (i) For the effective execution of any swap for or with the counterparty; (ii) To hedge or mitigate any exposure created by such swap; or (iii) To comply with a request of the Commission, Department of Justice, any self-regulatory organization designated by the Commission, or an applicable prudential regulator, or is otherwise required by… | |||||
| 17:17:1.0.1.1.22.5.7.6 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | §§ 23.411-23.429 [Reserved] | CFTC | ||||||
| 17:17:1.0.1.1.22.5.7.7 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | § 23.430 Verification of counterparty eligibility. | CFTC | (a) Eligibility. A swap entity shall verify that a counterparty meets the eligibility standards for an eligible contract participant, as defined in section 1a(18) of the Act and § 1.3 of this chapter, before offering to enter into or entering into a swap with that counterparty. (b) Special Entity. In verifying the eligibility of a counterparty pursuant to paragraph (a) of this section, a swap entity shall also verify whether the counterparty is a Special Entity. (c) Special Entity election. In verifying the eligibility of a counterparty pursuant to paragraph (a) of this section, a swap entity shall verify whether a counterparty is eligible to elect to be a Special Entity under § 23.401(h)(6) and, if so, notify such counterparty of its right to make such an election. (d) Safe harbor. A swap entity may rely on written representations of a counterparty to satisfy the requirements of this section as provided in § 23.402(d). A swap entity will have a reasonable basis to rely on such written representations for purposes of the requirements in paragraphs (a) and (b) of this section if the counterparty specifies in such representations the provision(s) of section 1a(18) of the Act or paragraph(s) of § 1.3 of this chapter that describe its status as an eligible contract participant and, in the case of a Special Entity, the paragraph(s) of the Special Entity definition in § 23.401(h) that define its status as a Special Entity. (e) Exceptions. This section shall not apply with respect to a transaction that is: (1) Initiated on a designated contract market; (2) Initiated with a counterparty whose identity is not known to the swap entity prior to execution on a swap execution facility, or a trading facility currently exempted from registration as a swap execution facility by the Commission pursuant to section 5h(g) of the Act; (3) An A-ITBC Swap; or (4) An ITBC Swap initiated on a swap execution facility, or a trading facility currently exempted from registration as a swap execution facility by the Commissio… | |||||
| 17:17:1.0.1.1.22.5.7.8 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | § 23.431 Disclosures of material information. | CFTC | (a) Disclosures of material information. At a reasonably sufficient time prior to entering into a swap, a swap entity shall disclose to any counterparty to the swap (other than a swap entity, security-based swap dealer, or major security-based swap participant) material information concerning the swap in a manner reasonably designed to allow the counterparty to assess: (1) The material risks of the particular swap, which may include market, credit, liquidity, foreign currency, legal, operational, and any other applicable risks; (2) The material characteristics of the particular swap, which shall include the price of the swap, the material economic terms of the swap, the terms relating to the operation of the swap, and the rights and obligations of the parties during the term of the swap to the extent that such characteristics are not reflected in transaction documentation with which the counterparty has been provided prior to entering into the swap; and (3) The material incentives and conflicts of interest that the swap entity may have in connection with a particular swap, which shall include any compensation or other incentive from any source other than the counterparty that the swap entity may receive in connection with the swap. (b) [Reserved] (c) Exceptions. Paragraph (a) of this section shall not apply with respect to a transaction that is: (1) Initiated on a designated contract market; (2) Initiated with a counterparty whose identity is not known to the swap entity prior to execution on a swap execution facility, or a trading facility currently exempted from registration as a swap execution facility by the Commission pursuant to section 5h(g) of the Act; (3) An A-ITBC Swap; (4) An ITBC Swap initiated on a swap execution facility, or a trading facility currently exempted from registration as a swap execution facility by the Commission pursuant to section 5h(g) of the Act; or (5) A Permitted PB Transaction entered into pursuant to a Qualified Prime Broker Arrangement. (d) Daily mark. A swap e… | |||||
| 17:17:1.0.1.1.22.5.7.9 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | H | Subpart H—Business Conduct Standards for Swap Dealers and Major Swap Participants Dealing With Counterparties, Including Special Entities | § 23.432 Clearing disclosures. | CFTC | (a) For swaps required to be cleared—right to select derivatives clearing organization. A swap entity shall notify any counterparty (other than a swap entity, securities-based swap dealer, or major securities-based swap participant) prior to entering into a swap that is subject to mandatory clearing under section 2(h) of the Act, that the counterparty has the sole right to select the derivatives clearing organization at which the swap will be cleared. (b) For swaps not required to be cleared—right to clearing. A swap entity shall notify any counterparty (other than a swap entity, securities-based swap dealer, or major securities-based swap participant) prior to entering into a swap that is not subject to the mandatory clearing requirements under section 2(h) of the Act that the counterparty: (1) May elect to require clearing of the swap; and (2) Shall have the sole right to select the derivatives clearing organization at which the swap will be cleared. (c) Exceptions. This section shall not apply with respect to a transaction that is: (1) An ITBC Swap that is initiated on a designated contract market, a swap execution facility, or a trading facility currently exempted from registration as a swap execution facility by the Commission pursuant to section 5h(g) of the Act; or (2) An A-ITBC Swap. | |||||
| 17:17:1.0.1.1.22.6.7.1 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | I | Subpart I—Swap Documentation | § 23.500 Definitions. | CFTC | [77 FR 55960, Sept. 11, 2012, as amended at 81 FR 27314, May 6, 2016; 86 FR 225, Jan. 5, 2021] | For purposes of this subpart I, the following terms shall be defined as provided. (a) Acknowledgment means a written or electronic record of all of the terms of a swap signed and sent by one counterparty to the other. (b) Bilateral portfolio compression exercise means an exercise in which two swap counterparties wholly terminate or change the notional value of some or all of the swaps submitted by the counterparties for inclusion in the portfolio compression exercise and, depending on the methodology employed, replace the terminated swaps with other swaps whose combined notional value (or some other measure of risk) is less than the combined notional value (or some other measure of risk) of the terminated swaps in the exercise. (c) Confirmation means the consummation (electronically or otherwise) of legally binding documentation (electronic or otherwise) that memorializes the agreement of the counterparties to all of the terms of a swap transaction. A confirmation must be in writing (whether electronic or otherwise) and must legally supersede any previous agreement (electronically or otherwise). A confirmation is created when an acknowledgment is manually, electronically, or by some other legally equivalent means, signed by the receiving counterparty. (d) Execution means, with respect to a swap transaction, an agreement by the counterparties (whether orally, in writing, electronically, or otherwise) to the terms of the swap transaction that legally binds the counterparties to such terms under applicable law. (e) Financial entity means a counterparty that is not a swap dealer or a major swap participant and that is one of the following: (1) A commodity pool as defined in Section 1a(5) of the Act; (2) A private fund as defined in Section 202(a) of the Investment Advisors Act of 1940; (3) An employee benefit plan as defined in paragraphs (3) and (32) of section 3 of the Employee Retirement Income and Security Act of 1974; (4) A person predominantly engaged in activities that are in the business of… | ||||
| 17:17:1.0.1.1.22.6.7.2 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | I | Subpart I—Swap Documentation | § 23.501 Swap confirmation. | CFTC | [77 FR 55960, Sept. 11, 2012, as amended at 89 FR 35001, May 1, 2024] | (a) Confirmation. Subject to the compliance schedule in paragraph (c) of this section: (1) Each swap dealer and major swap participant entering into a swap transaction with a counterparty that is a swap dealer or major swap participant shall execute a confirmation for the swap transaction as soon as technologically practicable, but in any event by the end of first business day following the day of execution. (2) Each swap dealer and major swap participant entering into a swap transaction with a counterparty that is not a swap dealer or a major swap participant shall send an acknowledgment of such swap transaction as soon as technologically practicable, but in any event by the end of the first business day following the day of execution. (3) (i) Each swap dealer and major swap participant shall establish, maintain, and follow written policies and procedures reasonably designed to ensure that it executes a confirmation for each swap transaction that it enters into with a counterparty that is a financial entity as soon as technologically practicable, but in any event by the end of the first business day following the day of execution. (ii) Each swap dealer and major swap participant shall establish, maintain, and follow written policies and procedures reasonably designed to ensure that it executes a confirmation for each swap transaction that it enters into with a counterparty that is not a swap dealer, major swap participant, or a financial entity not later than the end of the second business day following the day of execution. (iii) Such procedures shall include a requirement that, upon a request by a prospective counterparty prior to execution of any such swap, the swap dealer or major swap participant furnish to the prospective counterparty prior to execution a draft acknowledgment specifying all terms of the swap transaction other than the applicable pricing and other relevant terms that are to be expressly agreed at execution. (4) Swaps executed on a swap execution facility, designated contract market,… | ||||
| 17:17:1.0.1.1.22.6.7.3 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | I | Subpart I—Swap Documentation | § 23.502 Portfolio reconciliation. | CFTC | [77 FR 55960, Sept. 11, 2012] | (a) Swaps with swap dealers or major swap participants. Each swap dealer and major swap participant shall engage in portfolio reconciliation as follows for all swaps in which its counterparty is also a swap dealer or major swap participant. (1) Each swap dealer or major swap participant shall agree in writing with each of its counterparties on the terms of the portfolio reconciliation. (2) The portfolio reconciliation may be performed on a bilateral basis by the counterparties or by a qualified third party. (3) The portfolio reconciliation shall be performed no less frequently than: (i) Once each business day for each swap portfolio that includes 500 or more swaps; (ii) Once each week for each swap portfolio that includes more than 50 but fewer than 500 swaps on any business day during any week; and (iii) Once each calendar quarter for each swap portfolio that includes no more than 50 swaps at any time during the calendar quarter. (4) Each swap dealer and major swap participant shall resolve immediately any discrepancy in a material term of a swap identified as part of a portfolio reconciliation or otherwise. (5) Each swap dealer and major swap participant shall establish, maintain, and follow written policies and procedures reasonably designed to resolve any discrepancy in a valuation identified as part of a portfolio reconciliation or otherwise as soon as possible, but in any event within five business days, provided that the swap dealer and major swap participant establishes, maintains, and follows written policies and procedures reasonably designed to identify how the swap dealer or major swap participant will comply with any variation margin requirements under section 4s(e) of the Act and regulations under this part pending resolution of the discrepancy in valuation. A difference between the lower valuation and the higher valuation of less than 10 percent of the higher valuation need not be deemed a discrepancy. (b) Swaps with entities other than swap dealers or major swap participants. Each swa… | ||||
| 17:17:1.0.1.1.22.6.7.4 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | I | Subpart I—Swap Documentation | § 23.503 Portfolio compression. | CFTC | [77 FR 55960, Sept. 11, 2012] | (a) Portfolio compression with swap dealers and major swap participants —(1) Bilateral offset. Each swap dealer and major swap participant shall establish, maintain, and follow written policies and procedures for terminating each fully offsetting swap between a swap dealer or major swap participant and another swap dealer or major swap participant in a timely fashion, when appropriate. (2) Bilateral compression. Each swap dealer and major swap participant shall establish, maintain, and follow written policies and procedures for periodically engaging in bilateral portfolio compression exercises, when appropriate, with each counterparty that is also a swap dealer or major swap participant. (3) Multilateral compression. Each swap dealer and major swap participant shall establish, maintain, and follow written policies and procedures for periodically engaging in multilateral portfolio compression exercises, when appropriate, with each counterparty that is also a swap dealer or major swap participant. Such policies and procedures shall include: (i) Policies and procedures for participation in all multilateral portfolio compression exercises required by Commission regulation or order; and (ii) Evaluation of multilateral portfolio compression exercises that are initiated, offered, or sponsored by any third party. (b) Portfolio compression with counterparties other than swap dealers and major swap participants. Each swap dealer and major swap participant shall establish, maintain, and follow written policies and procedures for periodically terminating fully offsetting swaps and for engaging in portfolio compression exercises with respect to swaps in which its counterparty is an entity other than a swap dealer or major swap participant, to the extent requested by any such counterparty. (c) Portfolio compression of cleared swaps. Nothing in this section shall apply to a swap that is cleared by a derivatives clearing organization. (d) Recordkeeping. (1) Each swap dealer and major swap participant shall ma… | ||||
| 17:17:1.0.1.1.22.6.7.5 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | I | Subpart I—Swap Documentation | § 23.504 Swap trading relationship documentation. | CFTC | [77 FR 55960, Sept. 11, 2012, as amended at 90 FR 61259, Dec. 30, 2025] | (a) In general —(1) Applicability. The requirements of this section shall not apply to: (i) Swaps executed prior to the date on which a swap dealer or major swap participant is required to be in compliance with this section; (ii) Swaps that have been cleared on a derivatives clearing organization or cleared on a clearing organization that is currently exempted from registration by the Commission pursuant to section 5b(h) of the Act; and (iii) An ITBC Swap as defined in § 23.401(d). (2) Policies and procedures. Each swap dealer and major swap participant shall establish, maintain, and follow written policies and procedures reasonably designed to ensure that the swap dealer or major swap participant executes written swap trading relationship documentation with its counterparty that complies with the requirements of this section. The policies and procedures shall be approved in writing by senior management of the swap dealer and major swap participant, and a record of the approval shall be retained. Other than confirmations of swap transactions under § 23.501, the swap trading relationship documentation shall be executed prior to or contemporaneously with entering into a swap transaction with any counterparty. (b) Swap trading relationship documentation. (1) The swap trading relationship documentation shall be in writing and shall include all terms governing the trading relationship between the swap dealer or major swap participant and its counterparty, including, without limitation, terms addressing payment obligations, netting of payments, events of default or other termination events, calculation and netting of obligations upon termination, transfer of rights and obligations, governing law, valuation, and dispute resolution. (2) The swap trading relationship documentation shall include all confirmations of swap transactions under § 23.501. (3) The swap trading relationship documentation shall include credit support arrangements, which shall contain, in accordance with applicable requirements under C… | ||||
| 17:17:1.0.1.1.22.6.7.6 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | I | Subpart I—Swap Documentation | § 23.505 End user exception documentation. | CFTC | [77 FR 55960, Sep. 11, 2012, as amended at 78 FR 21046, Apr. 9, 2013] | (a) For swaps excepted from a mandatory clearing requirement. Each swap dealer and major swap participant shall obtain documentation sufficient to provide a reasonable basis on which to believe that its counterparty meets the statutory conditions required for an exception from a mandatory clearing requirement, as defined in section 2h(7) of the Act and § 50.50 of this chapter. Such documentation shall include: (1) The identity of the counterparty; (2) That the counterparty has elected not to clear a particular swap under section 2h(7) of the Act and § 50.50 of this chapter; (3) That the counterparty is a non-financial entity, as defined in section 2h(7)(C) of the Act; (4) That the counterparty is hedging or mitigating a commercial risk; and (5) That the counterparty generally meets its financial obligations associated with non-cleared swaps. Provided, that a swap dealer or major swap participant need not obtain documentation of paragraphs (a)(3), (4), or (5) of this section if it obtains documentation that its counterparty has reported the information listed in § 50.50(b)(1)(iii) in accordance with § 50.50(b)(2) of this chapter. (b) Recordkeeping. Each swap dealer and major swap participant shall maintain all documents required to be obtained pursuant to this section in accordance with § 23.203 and shall make them available promptly upon request to any representative of the Commission or any applicable prudential regulator, or with regard to swaps defined in section 1a(47)(A)(v) of the Act, to any representative of the Commission, the Securities and Exchange Commission, or any applicable prudential regulator. | ||||
| 17:17:1.0.1.1.22.6.7.7 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | I | Subpart I—Swap Documentation | § 23.506 Swap processing and clearing. | CFTC | (a) Swap processing. (1) Each swap dealer and major swap participant shall ensure that it has the capacity to route swap transactions not executed on a swap execution facility or designated contract market to a derivatives clearing organization in a manner acceptable to the derivatives clearing organization for the purposes of clearing; and (2) Each swap dealer and major swap participant shall coordinate with each derivatives clearing organization to which the swap dealer, major swap participant, or its clearing member submits transactions for clearing, to facilitate prompt and efficient swap transaction processing in accordance with the requirements of § 39.12(b)(7) of this chapter. (b) Swap clearing. With respect to each swap that is not executed on a swap execution facility or a designated contract market, each swap dealer and major swap participant shall: (1) If such swap is subject to a mandatory clearing requirement pursuant to section 2(h)(1) of the Act and an exception pursuant to 2(h)(7) is not applicable, submit such swap for clearing to a derivatives clearing organization as soon as technologically practicable after execution of the swap, but no later than the close of business on the day of execution; or (2) If such swap is not subject to a mandatory clearing requirement pursuant to section 2(h)(1) of the Act but is accepted for clearing by any derivatives clearing organization and the swap dealer or major swap participant and its counterparty agree that such swap will be submitted for clearing, submit such swap for clearing not later than the next business day after execution of the swap, or the agreement to clear, if later than execution. | |||||
| 17:17:1.0.1.1.22.7.7.1 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | J | Subpart J—Duties of Swap Dealers and Major Swap Participants | § 23.600 Risk Management Program for swap dealers and major swap participants. | CFTC | [77 FR 20205, Apr. 3, 2012, as amended at 79 FR 41126, July 15, 2014] | (a) Definitions. For purposes of subpart J, the following terms shall be defined as provided. (1) Affiliate. This term means, with respect to any person, a person controlling, controlled by, or under common control with, such person. (2) Business trading unit. This term means any department, division, group, or personnel of a swap dealer or major swap participant or any of its affiliates, whether or not identified as such, that performs, or personnel exercising direct supervisory authority over the performance of any pricing (excluding price verification for risk management purposes), trading, sales, marketing, advertising, solicitation, structuring, or brokerage activities on behalf of a registrant. (3) Clearing unit. This term means any department, division, group, or personnel of a registrant or any of its affiliates, whether or not identified as such, that performs, or personnel exercising direct supervisory authority over the performance of any proprietary or customer clearing activities on behalf of a registrant. (4) Governing body. This term means: (1) A board of directors; (2) A body performing a function similar to a board of directors; (3) Any committee of a board or body; or (4) The chief executive officer of a registrant, or any such board, body, committee, or officer of a division of a registrant, provided that the registrant's swaps activities for which registration with the Commission is required are wholly contained in a separately identifiable division. (5) Prudential regulator. This term has the same meaning as section 1a(39) of the Commodity Exchange Act and includes the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Farm Credit Association, and the Federal Housing Finance Agency, as applicable to the swap dealer or major swap participant. (6) Senior management. This term means, with respect to a registrant, any officer or officers specifically granted the authority and respon… | ||||
| 17:17:1.0.1.1.22.7.7.10 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | J | Subpart J—Duties of Swap Dealers and Major Swap Participants | § 23.609 Clearing member risk management. | CFTC | [77 FR 21308, Apr. 9, 2012] | (a) With respect to clearing activities in futures, security futures products, swaps, agreements, contracts, or transactions described in section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i) of the Act, commodity options authorized under section 4c of the Act, or leveraged transactions authorized under section 19 of the Act, each swap dealer or major swap participant that is a clearing member of a derivatives clearing organization shall: (1) Establish risk-based limits based on position size, order size, margin requirements, or similar factors; (2) Screen orders for compliance with the risk-based limits in accordance with the following: (i) For transactions subject to automated execution, the clearing member shall use automated means to screen orders for compliance with the risk-based limits; and (ii) For transactions subject to non-automated execution, the clearing member shall establish and maintain systems of risk controls reasonably designed to ensure compliance with the limits. (3) Monitor for adherence to the risk-based limits intra-day and overnight; (4) Conduct stress tests under extreme but plausible conditions of all positions at least once per week; (5) Evaluate its ability to meet initial margin requirements at least once per week; (6) Evaluate its ability to meet variation margin requirements in cash at least once per week; (7) Evaluate its ability to liquidate the positions it clears in an orderly manner, and estimate the cost of the liquidation; and (8) Test all lines of credit at least once per year. (b) Each swap dealer or major swap participant that is a clearing member of a derivatives clearing organization shall: (1) Establish written procedures to comply with this regulation; and (2) Keep full, complete, and systematic records documenting its compliance with this regulation. (3) All records required to be maintained pursuant to these regulations shall be maintained in accordance with Commission Regulation § 1.31 and shall be made available promptly upon request to representatives of t… | ||||
| 17:17:1.0.1.1.22.7.7.11 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | J | Subpart J—Duties of Swap Dealers and Major Swap Participants | § 23.610 Clearing member acceptance for clearing. | CFTC | [77 FR 21308, Apr. 9, 2012] | (a) Each swap dealer or major swap participant that is a clearing member of a derivatives clearing organization shall coordinate with each derivatives clearing organization on which it clears to establish systems that enable the clearing member, or the derivatives clearing organization acting on its behalf, to accept or reject each trade submitted to the derivatives clearing organization for clearing by or for the clearing member as quickly as would be technologically practicable if fully automated systems were used; and (b) Each swap dealer or major swap participant that is a clearing member of a derivatives clearing organization shall accept or reject each trade submitted by or for it as quickly as would be technologically practicable if fully automated systems were used; a clearing member may meet this requirement by: (1) Establishing systems to pre-screen orders for compliance with criteria specified by the clearing member; (2) Establishing systems that authorize a derivatives clearing organization to accept or reject on its behalf trades that meet, or fail to meet, criteria specified by the clearing member; or (3) Establishing systems that enable the clearing member to communicate to the derivatives clearing organization acceptance or rejection of each trade as quickly as would be technologically practicable if fully automated systems were used. | ||||
| 17:17:1.0.1.1.22.7.7.12 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | J | Subpart J—Duties of Swap Dealers and Major Swap Participants | § 23.611 Delegation of authority to the Director of the Division of Clearing and Risk to establish an alternative compliance schedule to comply with clearing member acceptance for clearing. | CFTC | [77 FR 21308, Apr. 9, 2012] | (a) The Commission hereby delegates to the Director of the Division of Clearing and Risk or such other employee or employees as the Director may designate from time to time, the authority to establish an alternative compliance schedule for requirements of § 23.610 for swaps that are found to be technologically or economically impracticable for an affected swap dealer or major swap participant that seeks, in good faith, to comply with the requirements of § 23.610 within a reasonable time period beyond the date on which compliance by such swap dealer or major swap participant is otherwise required. (b) A request for an alternative compliance schedule under this section shall be acted upon by the Director of the Division of Clearing and Risk within 30 days from the time such a request is received, or it shall be deemed approved. (c) An exception granted under this section shall not cause a registrant to be out of compliance or deemed in violation of any registration requirements. (d) Notwithstanding any other provision of this section, in any case in which a Commission employee delegated authority under this section believes it appropriate, he or she may submit to the Commission for its consideration the question of whether an alternative compliance schedule should be established. Nothing in this section shall be deemed to prohibit the Commission, at its election, from exercising the authority delegated in this section. | ||||
| 17:17:1.0.1.1.22.7.7.2 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | J | Subpart J—Duties of Swap Dealers and Major Swap Participants | § 23.601 Monitoring of position limits. | CFTC | (a) Each swap dealer and major swap participant shall establish and enforce written policies and procedures that are reasonably designed to monitor for and prevent violations of applicable position limits established by the Commission, a designated contract market, or a swap execution facility, and to monitor for and prevent improper reliance upon any exemptions or exclusions from such position limits. For purposes of this regulation, such policies and procedures shall be referred to as “Position Limit Procedures.” The Position Limit Procedures shall be incorporated into the Risk Management Program of the swap dealer or major swap participant. (b) For purposes of the Position Limit Procedures, each swap dealer and major swap participant shall convert all swap positions into equivalent futures positions using the methodology set forth in Commission regulations. (c) Each swap dealer and major swap participant shall provide training to all relevant personnel on applicable position limits on an annual basis and shall promptly notify personnel upon any change to applicable position limits. Each swap dealer and major swap participant shall maintain records of such training and notifications including the substance of the training, the identity of those receiving training, and the identity of those notified of changes to applicable position limits. (d) Each swap dealer and major swap participant shall diligently monitor its trading activities and diligently supervise the actions of its partners, officers, employees, and agents to ensure compliance with the Position Limit Procedures of the swap dealer or major swap participant. (e) The Position Limit Procedures of each swap dealer and major swap participant shall implement an early warning system designed to detect and alert its senior management when position limits are in danger of being breached (such as when trading has reached a percentage threshold of the applicable position limit, and when position limits have been exceeded). Any detected violation of applicab… | |||||
| 17:17:1.0.1.1.22.7.7.3 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | J | Subpart J—Duties of Swap Dealers and Major Swap Participants | § 23.602 Diligent supervision. | CFTC | (a) Supervision. Each swap dealer and major swap participant shall establish and maintain a system to supervise, and shall diligently supervise, all activities relating to its business performed by its partners, members, officers, employees, and agents (or persons occupying a similar status or performing a similar function). Such system shall be reasonably designed to achieve compliance with the requirements of the Commodity Exchange Act and Commission regulations. (b) Supervisory System. Such supervisory system shall provide, at a minimum, for the following: (1) The designation, where applicable, of at least one person with authority to carry out the supervisory responsibilities of the swap dealer or major swap participant for all activities relating to its business as a swap dealer or major swap participant. (2) The use of reasonable efforts to determine that all supervisors are qualified and meet such standards of training, experience, competence, and such other qualification standards as the Commission finds necessary or appropriate. | |||||
| 17:17:1.0.1.1.22.7.7.4 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | J | Subpart J—Duties of Swap Dealers and Major Swap Participants | § 23.603 Business continuity and disaster recovery. | CFTC | (a) Business continuity and disaster recovery plan required. Each swap dealer and major swap participant shall establish and maintain a written business continuity and disaster recovery plan that outlines the procedures to be followed in the event of an emergency or other disruption of its normal business activities. The business continuity and disaster recovery plan shall be designed to enable the swap dealer or major swap participant to continue or to resume any operations by the next business day with minimal disturbance to its counterparties and the market, and to recover all documentation and data required to be maintained by applicable law and regulation. (b) Essential components. The business continuity and disaster recovery plan of a swap dealer or major swap participant shall include the following components: (1) Identification of the documents, data, facilities, infrastructure, personnel and competencies essential to the continued operations of the swap dealer or major swap participant and to fulfill the obligations of the swap dealer or major swap participant. (2) Identification of the supervisory personnel responsible for implementing each aspect of the business continuity and disaster recovery plan and the emergency contacts required to be provided pursuant to this regulation. (3) A plan to communicate with the following persons in the event of an emergency or other disruption, to the extent applicable to the operations of the swap dealer or major swap participant: employees; counterparties; swap data repositories; execution facilities; trading facilities; clearing facilities; regulatory authorities; data, communications and infrastructure providers and other vendors; disaster recovery specialists and other persons essential to the recovery of documentation and data, the resumption of operations, and compliance with the Commodity Exchange Act and Commission regulations. (4) Procedures for, and the maintenance of, back-up facilities, systems, infrastructure, alternative staffing and other res… | |||||
| 17:17:1.0.1.1.22.7.7.5 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | J | Subpart J—Duties of Swap Dealers and Major Swap Participants | § 23.604 [Reserved] | CFTC | ||||||
| 17:17:1.0.1.1.22.7.7.6 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | J | Subpart J—Duties of Swap Dealers and Major Swap Participants | § 23.605 Conflicts of interest policies and procedures. | CFTC | (a) Definitions. For purposes of this section, the following terms shall be defined as provided. (1) Affiliate. This term means, with respect to any person, a person controlling, controlled by, or under common control with, such person. (2) Business trading unit. This term means any department, division, group, or personnel of a swap dealer or major swap participant or any of its affiliates, whether or not identified as such, that performs, or personnel exercising direct supervisory authority over the performance of, any pricing (excluding price verification for risk management purposes), trading, sales, marketing, advertising, solicitation, structuring, or brokerage activities on behalf of a swap dealer or major swap participant or any of its affiliates. (3) Clearing unit. This term means any department, division, group, or personnel of a swap dealer or major swap participant or any of its affiliates, whether or not identified as such, that performs, or personnel exercising direct supervisory authority over the performance of, any proprietary or customer clearing activities on behalf of a swap dealer or major swap participant or any of its affiliates. (4) Derivative. This term means: (i) A contract for the purchase or sale of a commodity for future delivery; (ii) A security futures product; (iii) A swap; (iv) Any agreement, contract, or transaction described in section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i) of the Act; (v) Any commodity option authorized under section 4c of the Act; and (vi) Any leverage transaction authorized under section 19 of the Act. (5) Non-research personnel. This term means any employee of the business trading unit or clearing unit, or any other employee of the swap dealer or major swap participant, other than an employee performing a legal or compliance function, who is not directly responsible for, or otherwise not involved in, research or analysis intended for inclusion in a research report. (6) Public appearance. This term means any participation in a confere… | |||||
| 17:17:1.0.1.1.22.7.7.7 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | J | Subpart J—Duties of Swap Dealers and Major Swap Participants | § 23.606 General information: availability for disclosure and inspection. | CFTC | (a) Disclosure of information. (1) Each swap dealer and major swap participant shall make available for disclosure to and inspection by the Commission and its prudential regulator, as applicable, all information required by, or related to, the Commodity Exchange Act and Commission regulations, including: (i) The terms and condition of its swaps; (ii) Its swaps trading operations, mechanisms, and practices; (iii) Financial integrity and risk management protections relating to swaps; and (iv) Any other information relevant to its trading in swaps. (2) Such information shall be made available promptly, upon request, to Commission staff and the staff of the applicable prudential regulator, at such frequency and in such manner as is set forth in the Commodity Exchange Act, Commission regulations, or the regulations of the applicable prudential regulator. (b) Ability to provide information. (1) Each swap dealer and major swap participant shall establish and maintain reliable internal data capture, processing, storage, and other operational systems sufficient to capture, process, record, store, and produce all information necessary to satisfy its duties under the Commodity Exchange Act and Commission regulations. Such systems shall be designed to produce the information within the time frames set forth in the Commodity Exchange Act and Commission regulations or upon request, as applicable. (2) Each swap dealer and major swap participant shall establish, implement, maintain, and enforce written procedures for the capture, processing, recording, storage, and production of all information necessary to satisfy its duties under the Commodity Exchange Act and Commission regulations. (c) Record retention. All records or reports that a swap dealer or major swap participant is required to maintain pursuant to this regulation shall be maintained in accordance with Commission Regulation § 1.31 and shall be made available promptly upon request to representatives of the Commission and to representatives of applicable p… | |||||
| 17:17:1.0.1.1.22.7.7.8 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | J | Subpart J—Duties of Swap Dealers and Major Swap Participants | § 23.607 Antitrust considerations. | CFTC | (a) No swap dealer or major swap participant shall adopt any process or take any action that results in any unreasonable restraint of trade, or impose any material anticompetitive burden on trading or clearing, unless necessary or appropriate to achieve the purposes of the Commodity Exchange Act. (b) Consistent with its obligations under paragraph (a) of this section, each swap dealer and major swap participant shall adopt policies and procedures to prevent actions that result in unreasonable restraint of trade, or impose any material anticompetitive burden on trading or clearing. | |||||
| 17:17:1.0.1.1.22.7.7.9 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | J | Subpart J—Duties of Swap Dealers and Major Swap Participants | § 23.608 Restrictions on counterparty clearing relationships. | CFTC | [77 FR 21308, Apr. 9, 2012] | No swap dealer or major swap participant entering into a swap to be submitted for clearing with a counterparty that is a customer of a futures commission merchant shall enter into an arrangement that: (a) Discloses to the futures commission merchant or any swap dealer or major swap participant the identity of a customer's original executing counterparty; (b) Limits the number of counterparties with whom a customer may enter into a trade; (c) Restricts the size of the position a customer may take with any individual counterparty, apart from an overall limit for all positions held by the customer with the swap dealer or major swap participant; (d) Impairs a customer's access to execution of a trade on terms that have a reasonable relationship to the best terms available; or (e) Prevents compliance with the timeframes set forth in § 1.74(b), § 23.610(b), or § 39.12(b)(7) of this chapter. | ||||
| 17:17:1.0.1.1.22.9.7.1 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | L | Subpart L—Segregation of Assets Held as Collateral in Uncleared Swap Transactions | § 23.700 Definitions. | CFTC | As used in this subpart: Initial Margin means money, securities, or property posted by a party to a swap as performance bond to cover potential future exposures arising from changes in the market value of the position. Segregate means to keep two or more items in separate accounts, and to avoid combining them in the same transfer between two accounts. Variation Margin means a payment made by or collateral posted by a party to a swap to cover the current exposure arising from changes in the market value of the position since the trade was executed or the previous time the position was marked to market. | |||||
| 17:17:1.0.1.1.22.9.7.2 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | L | Subpart L—Segregation of Assets Held as Collateral in Uncleared Swap Transactions | § 23.701 Notification of right to segregation. | CFTC | (a) At the beginning of the first swap transaction that provides for the exchange of Initial Margin, a swap dealer or major swap participant must notify the counterparty that the counterparty has the right to require that any Initial Margin the counterparty provides in connection with such transaction be segregated in accordance with §§ 23.702 and 23.703, except in those circumstances where segregation is mandatory pursuant to § 23.157 or rules adopted by the prudential regulators pursuant to section 4s(e)(2)(A) of the Act. (b) The right referred to in paragraph (a) of this section does not extend to Variation Margin. (c) If the counterparty elects to segregate Initial Margin, the terms of segregation shall be established by written agreement. (d) A counterparty's election, if applicable, to require segregation of Initial Margin or not to require such segregation, may be changed at the discretion of the counterparty upon written notice delivered to the swap dealer or major swap participant, which changed election shall be applicable to all swaps entered into between the parties after such delivery. | |||||
| 17:17:1.0.1.1.22.9.7.3 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | L | Subpart L—Segregation of Assets Held as Collateral in Uncleared Swap Transactions | § 23.702 Requirements for segregated initial margin. | CFTC | (a) The custodian of Initial Margin, segregated pursuant to an election under § 23.701, must be a legal entity independent of both the swap dealer or major swap participant and the counterparty. (b) Initial Margin that is segregated pursuant to an election under § 23.701 must be held in an account segregated for, and on behalf of, the counterparty, and designated as such. Such an account may, if the swap dealer or major swap participant and the counterparty agree, also hold Variation Margin. (c) Any agreement for the segregation of Initial Margin pursuant to this section shall be in writing, shall include the custodian as a party, and shall provide that any instruction to withdraw Initial Margin shall be in writing and that notification of the withdrawal shall be given immediately to the non-withdrawing party. | |||||
| 17:17:1.0.1.1.22.9.7.4 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | L | Subpart L—Segregation of Assets Held as Collateral in Uncleared Swap Transactions | § 23.703 Investment of segregated initial margin. | CFTC | The swap dealer or major swap participant and the counterparty may enter into any commercial arrangement, in writing, regarding the investment of Initial Margin segregated pursuant to § 23.701 and the related allocation of gains and losses resulting from such investment. | |||||
| 17:17:1.0.1.1.22.9.7.5 | 17 | Commodity and Securities Exchanges | I | 23 | PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS | L | Subpart L—Segregation of Assets Held as Collateral in Uncleared Swap Transactions | § 23.704 Requirements for non-segregated margin. | CFTC | (a) Each swap dealer or major swap participant shall report to each counterparty that does not choose to require segregation of Initial Margin pursuant to § 23.701(a), on a quarterly basis, no later than the fifteenth business day after the end of the quarter, that the back office procedures of the swap dealer or major swap participant relating to margin and collateral requirements are in compliance with the agreement of the counterparties. (b) The obligation specified in paragraph (a) of this section shall apply no earlier than the 90th calendar day after the date on which the first swap is transacted between the counterparty and the swap dealer or major swap participant. |
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);
CREATE INDEX idx_cfr_title ON cfr_sections(title_number);
CREATE INDEX idx_cfr_part ON cfr_sections(part_number);
CREATE INDEX idx_cfr_agency ON cfr_sections(agency);