CFTC May Give Clearinghouses Time to Accept Swaps

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According to various news sources, the U.S. Commodity Futures Trading Commission (CFTC) may allow clearinghouses more time before they must decide whether to accept and guarantee trades in the $601 trillion swap market.

According to CFTC, the new proposal would require decisions as soon as technologically possible, “milliseconds or seconds, or, at most, a few minutes, not hours or days.”    The new proposal is easing a previous rule imposed by Dodd-Frank Act that required clearinghouses to immediately accept or reject executed trades.      

The goal of the new rule to promotes market participants’ access to central clearing, increases market transparency and supports market efficiency.    It would also establish rules governing documentation standards between swap dealers and their clients.

Dodd-Frank, the financial-regulation overhaul enacted last year, aimed to reduce risk in the swaps market after largely unregulated transactions helped fuel the 2008 credit crisis.    Clearinghouses seek to mitigate risk by guaranteeing trades and standing between buyers and sellers.

Anna Timone (195 Posts)


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