On June 14th, the CFTC published for comment proposed rules granting temporary exemptive relief from Section 754 of the Dodd-Frank Act regarding certain swap-related requirements that go into effect on July 16, 2011. The relief would be granted in two parts:
- In part one, the CFTC addresses provisions of Section 754 that would go into effect on July 16, that reference terms such as "swap," "swap dealer," "major swap participant," or "eligible contract participant" that the Dodd-Frank Act requires the CFTC and SEC to "further define." These definitional rulemakings will not be in place by July 16. Accordingly, the CFTC is proposing to temporarily exempt persons or entities from complying with these provisions until the effective date of the definitional rulemaking for such terms or December 31, 2011, whichever is earlier. The exemption would apply only to the extent the provision specifically relates to entities or instruments such as swaps, swap dealers, major swap participants, and eligible contract participants.
- In part two, the CFTC addresses provisions of the CEA that will apply to certain transactions in exempt or excluded commodities (primarily financial and energy commodities) as a result of the repeal of various Commodity Exchange Act ("CEA") exemptions and exclusions as of July 16, 2011. The Commission is proposing to temporarily exempt such transactions from certain CEA provisions until the repeal or replacement of certain of the Commission's regulations or December 31, 2011, whichever is earlier.
Comments should be submitted on or before July 1, 2011. CFTC Fact Sheet on Proposed Order Addressing Effective Date of Swap Regulations. See also CFTC Open Meeting Webpage (with additional links to documents and Commissioner statements); Bloomberg.