Securities, Commodities, and Exchanges: CFTC Issues Proposed Rules on Derivatives

On October 1, at a public meeting, the Commodity Futures Trading Commission (CFTC) announced a first series of proposed regulations pertaining to derivatives, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act. One proposed rule would establish financial resources requirements for derivatives clearing organizations (DCOs) and systemically important DCOs (SIDCOs). The CFTC also proposed to mitigate potential conflicts of interest in the operation of a DCO, designated contract market (DCM), or a swap execution facility (SEF) through (1) structural governance requirements and (2) limits on ownership of voting equity and exercise of voting power.