March 2, 2021

Volume XI, Number 61

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March 02, 2021

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March 01, 2021

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CFTC Approves NFA’s Swap Dealer Capital Model Review Program

On January 13, the Commodity Futures Trading Commission’s Market Participants Division determined that the National Futures Association’s (NFA) swap dealer capital model requirements and review program are comparable with the CFTC’s swap dealer capital model requirements and review program. As a result, a capital model approved by NFA will be accepted as an alternative means of compliance with CFTC Regulation 23.102.

CFTC Regulation 23.102 permits a swap dealer to apply to the CFTC or to the registered futures association of which it is a member to obtain approval to use internal models for purposes of making model computations for capital under the CFTC’s rules. The regulation further requires the CFTC to determine whether NFA’s model requirements and review process are comparable to those of the agency.

Swap dealers are required to comply with newly adopted capital requirements by October 6, 2021. See the CFTC’s release with a link to the CFTC Staff Letter No. 21-03.

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©2020 Katten Muchin Rosenman LLPNational Law Review, Volume XI, Number 15
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About this Author

Kevin M. Foley, Finance Lawyer, Katten Llaw Firm
Partner

Kevin M. Foley has extensive experience in commodities law and advises a wide range of clients, both in the United States and abroad, on compliance with the Commodity Exchange Act and the rules of the Commodity Futures Trading Commission (CFTC) affecting traditional exchange-traded products, as well as the over-the-counter markets involving swaps and other derivative instruments. His clients include futures commission merchants, derivatives clearing organizations, designated contract markets, foreign boards of trade and an industry trade association.

...

312-902-5372
Associate

Adam Haft is an associate in the Financial Services practice.

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