The U.S. Commodity Futures Trading Commission (CFTC) unanimously approved proposed rules on Friday that establish minimum capital requirements for swaps dealers and major swap participants that aren’t otherwise subject to the capital rules of a prudential regulator.
The CFTC’s proposed rules generally permit approaches based upon existing U.S. bank regulators’ capital requirements, or capital requirements that the CFTC and the U.S. Securities and Exchange Commission (SEC) have set.
The proposed rules also allow dealers to use internal models to compute their regulatory capital, subject to prior approval by either the CFTC or the National Futures Association. Furthermore, they would allow the CFTC to issue capital comparability determinations to foreign jurisdictions or foreign dealers under a substituted compliance arrangement.
The rules would also require certain firms to meet liquidity requirements. As well, they propose recordkeeping, and reporting and notification requirements.
The proposals are out for a 90-day comment period.