In remarks before the U.S. Chamber of Commerce yesterday, CFTC Chairman Gary Gensler discussed several aspects of the Commission’s implementation of the Dodd-Frank Act. According to the Chairman, the Commission is following two guiding principles with respect to its rule-writing process. The first principle, which should come as no surprise, is adherence to the text of the statute. The second principle is consultation with other regulators (apparently including even European Commission regulators who recently released regulations very similar to the provisions of Dodd-Frank) and the broader public.
Chairman Gensler went on to address a few substantive rulemaking areas of particular interest to Chamber members. Regarding the end-user exemption to mandatory central clearing, he stated: “The statute on this issue is clear: those non-financial entities that are ‘using swaps to hedge or mitigate commercial risk’ will be able to choose whether or not to bring their swaps to clearinghouses.” Regarding what entities might be categorized as “swap dealers” or “major swap participants,” he stated that the CFTC anticipates that around 200 entities will likely be categorized as swap dealers and that most end users will be unlikely to fall within the major swap participant category. Finally, the Chairman indicated that, given that the Dodd-Frank Act generally gives regulators until July 15, 2011 to write the rules to implement the Act and requires a minimum transition period of 60 days following promulgation before rules goes into effect, he expects that rules such as those implementing the real-time reporting requirements of the Act will go into effect by September 2011.