Who regulates FX swaps?
Most foreign exchange and currency transac- tions (“Currency Transactions”) conducted in the U.S. market are subject to the CEA and the rules of the CFTC and the National Futures Associa- tion (“NFA”). Other financial regulators, such as the federal banking regulators and the SEC, also play a significant role.
Are FX swaps regulated by CFTC?
Yes. Under the Dodd-Frank Act, even if the Secretary of the Treasury determines that foreign exchange forwards or foreign exchange swaps should not be regulated as swaps, they still would be subject to swap reporting requirements (to a swap data repository, if available, or to the CFTC otherwise).
Who regulates the swaps market?
As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFTC has written rules to regulate the swaps marketplace.
Does the CFTC regulate equity swaps?
Under the comprehensive framework for regulating swaps and security-based swaps established in Title VII, the CFTC is given regulatory authority over swaps, the SEC is given regulatory authority over security-based swaps, and the Commissions jointly are to prescribe such regulations regarding mixed swaps as may be ...
Does the CFTC have jurisdiction over commodity swaps?
The CFTC regulates the U.S. derivatives markets. This includes the commodity futures, options, and swaps markets as well as over-the-counter (OTC) markets.
Do you need an ISDA to trade FX?
Additional legal documentation, which may include any FX master agreement, such as the International Swaps and Derivatives Association (ISDA) Master Agreement, is required in advance of trading should you wish to begin trading other FX products that are in scope under Title VII of the Dodd-Frank Act, the Commodity ...
What is the difference between the SEC and the CFTC?
The CFTC has the authority to regulate futures and derivatives trading of cryptocurrencies like Bitcoin. The SEC focuses on areas such as initial coin offerings (ICOs) and decentralized finance (DeFi) platforms.
Which swaps are regulated by SEC?
The SEC regulates Security-Based Swaps (SBS) and Security-Based Swap Dealers (SBSD). The CFTC regulates Swaps and Swap Dealers.
Are swaps highly regulated?
“Swaps” are generally regulated by the Commodity Futures Trading Commission (the “CFTC”) under the Commodity Exchange Act (the “CEA”), and “security-based swaps” are regulated by the Securities and Exchange Commission (the “SEC” and, together with the CFTC, the “Commissions”) under the Securities Exchange Act of 1934, ...
Does Dodd-Frank still exist?
A partial repeal to the Dodd–Frank Act, leaving in place its central structure, was passed in 2018 with the Economic Growth, Regulatory Relief, and Consumer Protection Act.
Does the SEC have jurisdiction over swaps?
The SEC's role is to regulate and oversee the SBS market, while the CFTC oversees other types of swaps (e.g., commodities, currency, interest rates, etc.).
What are the Dodd-Frank swap rules?
The Dodd-Frank Act provides an exemption for a person who “engages in a de minimis quantity of swap dealing in connection with transactions with or on behalf of its customers.” The rule requires that, in order for a person to be exempt from the definition on the basis of de minimis activity, the aggregate gross ...
What are swaps under Dodd-Frank?
The broad definition of swap set forth in Title VII of the Dodd-Frank Act includes any agreement, contract or transaction (the “Subject Agreement”) that provides for payment “dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, ...
Are non US swap dealers required to comply with CFTC?
In a swap between a non-U.S. swap dealer or non-U.S. major swap participant and a non-U.S. person that is guaranteed or conduit affiliate, the parties are required to comply with Category A Transaction-Level Requirements, but substituted compliance may be available.
What are the two types of commodity swaps?
There are two types of commodity swaps that are generally used: fixed-floating commodity swaps and commodity-for-interest swaps.
Who oversees the CFTC?
The CFTC organization consists of the offices of the Chairman and Commissioners as well as the agency's 14 operating divisions and offices. The CFTC organization is led by the Chairman in his or her capacity as the agency's Chief Executive.
How do you trade FX swaps?
In a FX Swap an amount of one currency is purchased (or sold) in a spot transaction and subsequently sold (or purchased) in the forward. This is a fixed agreement with both parties entering into an obligation. The forward rate is determined by the spot rate.
How is FX regulated?
The global supervisory bodies regulate forex by setting standards which all brokers under their jurisdiction must comply with. These standards include being registered and licensed with the regulatory body, undergoing regular audits, communicating certain changes of service to their clients, and more.
Are FX swaps reportable?
FX swaps and FX forwards are nonetheless subject to SDR reporting under CFTC Regulations, Part 45, and business conduct and anti-evasion requirements.
What products does CFTC regulate?
The Commodity Futures Trading Commission is an independent U.S. government agency that regulates the U.S. derivatives markets, including futures, options, and swaps.
Is crypto regulated by SEC or CFTC?
Commodity Futures Trading Commission Oversight of Crypto Currency. The Commodity Futures Trading Commission (CFTC) is the primary regulator responsible for overseeing commodity derivatives markets in the United States.
Are options regulated by SEC or CFTC?
All option contracts traded over stock/index are overseen by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA); while options contracts over forex/commodity/futures are watched over by the Commodity Futures Trading Commission (CFTC) and the National Futures Association ...
Do swap dealers have to register?
What are the steps in the registration process for a swap dealer (SD) or a major swap participant (MSP)? SDs and MSPs are required to be registered with the CFTC.
Who are registered swap dealers?
A swap dealer (SD) is an entity that holds itself out as a dealer in swaps; makes a market in swaps; regularly enters into swaps with counterparties as an ordinary course of business for its own account; or engages in any activity causing the entity to be commonly known in the trade as a dealer or market maker in swaps ...
Are futures considered swaps?
Swaps are customized contracts traded in the over-the-counter market privately, versus options and futures traded on a public exchange. The plain vanilla interest rate and currency swaps are the two most common and basic types of swaps.
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