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Thursday, May 31, 2012

ABA: Guidance Needed on CFTC Swap Regulations

ABA filed a comment letter with the CFTC regarding the Effective Date Amendments: Second Amendment to July 14, 2011, Order for Swap Regulations.
ABA supports the CFTC’s continuation of the temporary exemption to ensure that “current practices are not unduly disrupted during the transition to the new regulatory regime.”

This letter addresses the proposed removal in the Second Amendment of the reference to the term “eligible contract participant” (ECP) as it pertains to the expiration date of the Final Order. Section 2(e) of the Commodity Exchange Act will make it illegal to enter into a swap with anyone other than an ECP unless it is done on or subject to the rules of a designated contract market (DCM).

ABA believes that it is critical to extend or establish a compliance date for Section 2(e) that ensures it does not come into effect before insured depository institutions have received adequate guidance from the Commission on how to comply with this important provision.
The letter also stresses the importance of gathering significant information about the costs and benefits of the temporary relief.

Read ABA’s full comment letter.

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