By Anne Sherry, J.D.
The CFTC finalized rules intended to make it easier for swap dealers and major swap participants to comply with financial reporting obligations and demonstrate compliance with minimum capital requirements. The rules codify previous CFTC staff letters regarding calculating capital and alternate financial reporting. They also revise certain Part 23 regulations regarding financial reporting. The final rule will apply to all financial reports with an “as of” reporting date of September 30, 2024, or later.
The Commission permits swap dealers to select one of three methods to calculate their capital requirements: the net liquid assets capital approach; the bank-based capital requirements; or the tangible net worth capital approach. The rules primarily affect swap dealers electing the tangible net worth capital approach, as well as non-U.S.-bank swap dealers. The Commission believes that adopting amendments consistent with important staff letters, while adding specificity or detail to existing requirements, will help swap dealers clearly demonstrate compliance.
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