Final Rule: Derivatives Clearing Organizations and International Standards
Federal Register Publication Date: 12/02/2013
Summary: The CFTC adopted final regulations to establish additional standards for compliance with the derivatives clearing organization (‘‘DCO’’) core principles set forth in the Commodity Exchange Act (‘‘CEA’’) for systemically important DCOs (‘‘SIDCOs’’) and DCOs that elect to opt-in to the SIDCO regulatory requirements (‘‘Subpart C DCOs’’). Pursuant to the new regulations, SIDCOs and Subpart C DCOs are required to comply with the requirements applicable to all DCOs, which are set forth in the CFTC’s DCO regulations on compliance with core principles, to the extent those requirements are not inconsistent with the new requirements set forth herein. The regulations include provisions concerning: procedural requirements for opting in to the regulatory regime as well as substantive requirements relating to governance, financial resources, system safeguards, special default rules and procedures for uncovered losses or shortfalls, risk management, additional disclosure requirements, efficiency, and recovery and wind-down procedures. These additional requirements are consistent with the Principles for Financial Market Infrastructures published by the Committee on Payment and Settlement Systems and the Board of the International Organization of Securities Commissions. In addition, the CFTC adopted certain delegation provisions and certain technical clarifications.