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    DCMCP Qa

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    The document summarizes a proposed rulemaking by the Commodity Futures Trading Commission to implement provisions of the Dodd-Frank Act relating to designated contract markets (DCMs). The Dodd-Frank Act amended DCM core principles and requirements. The proposed rulemaking would establish new rules and guidance for DCMs in areas like applications, trading halts, centralized market trading, financial resources, and system safeguards. It would also impose new requirements for DCMs that list swaps. The proposed rules would take effect 60 days after publication of final rules.

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    DCMCP Qa

    Uploaded by

    MarketsWiki
    208 views2 pages
    The document summarizes a proposed rulemaking by the Commodity Futures Trading Commission to implement provisions of the Dodd-Frank Act relating to designated contract markets (DCMs). The Dodd-Frank Act amended DCM core principles and requirements. The proposed rulemaking would establish new rules and guidance for DCMs in areas like applications, trading halts, centralized market trading, financial resources, and system safeguards. It would also impose new requirements for DCMs that list swaps. The proposed rules would take effect 60 days after publication of final rules.

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    The document summarizes a proposed rulemaking by the Commodity Futures Trading Commission to implement provisions of the Dodd-Frank Act relating to designated contract markets (DCMs). The Dodd-Frank Act amended DCM core principles and requirements. The proposed rulemaking would establish new rules and guidance for DCMs in areas like applications, trading halts, centralized market trading, financial resources, and system safeguards. It would also impose new requirements for DCMs that list swaps. The proposed rules would take effect 60 days after publication of final rules.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    208 views2 pages

    DCMCP Qa

    Uploaded by

    MarketsWiki
    The document summarizes a proposed rulemaking by the Commodity Futures Trading Commission to implement provisions of the Dodd-Frank Act relating to designated contract markets (DCMs). The Dodd-Frank Act amended DCM core principles and requirements. The proposed rulemaking would establish new rules and guidance for DCMs in areas like applications, trading halts, centralized market trading, financial resources, and system safeguards. It would also impose new requirements for DCMs that list swaps. The proposed rules would take effect 60 days after publication of final rules.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Commodity Futures Trading Commission

    Office of Public Affairs


    Three Lafayette Centre
    1155 21st Street, NW
    Washington, DC 20581
    www.cftc.gov

    Q & A – Core Principles and Other


    Requirements for Designated Contract Markets
    What is the goal of the proposed rulemaking?

    The proposed rulemaking implements Section 735 of the Dodd-Frank Wall Street Reform and Consumer
    Protection Act of 2010 (“Dodd-Frank Act”), which amended Section 5 of the Commodity Exchange Act (“CEA”)
    governing the designation and operation of designated contract markets (“DCMs”). The proposed rulemaking also
    implements the provisions under the Dodd-Frank Act that pertain to the processing, trading and execution of
    swaps on DCMs.

    How did the Dodd-Frank Act amend the CEA, as applicable to DCMs?

    The Dodd-Frank Act amended the DCM core principles by: (i) eliminating the eight criteria for designation as a
    contract market; (ii) amending most of the core principles, including incorporating the substantive requirements of
    the designation criteria; and (iii) adding five new core principles. Accordingly, all DCMs and DCM applicants must
    comply with a total of 23 core principles as a condition of obtaining and maintaining designation as a contract
    market.

    The Dodd-Frank Act also amended the CEA to require that execution of clearable swaps must occur on a DCM or
    a SEF, except where no DCM or SEF makes the swap available for trading.

    How does the proposed rulemaking implement the applicable provisions of the Dodd- Frank Act?

    To implement the relevant provisions of the Dodd-Frank Act, the proposed rulemaking proposes new and
    amended rules, guidance and acceptable practices applicable to DCMs and DCM applicants, under Part 38 of Title
    17 of the Code of Federal Regulations. The proposed rules, guidance and acceptable practices implement the
    amended core principles and incorporate the trading and execution of swaps on DCMs.

    What are some examples of new or revised requirements that are proposed in the rulemaking?

    The proposed rulemaking proposes several new requirements for DCMs. Some examples include:

    • The proposed rules would eliminate the ninety-day accelerated approval procedures for DCM applications
    and require that all applications for designation as a contract market be reviewed within 180 days, as
    required under the CEA.
    • To streamline the application process, the proposed rulemaking includes, under Part 38, a new DCM
    application form with a comprehensive list of instructions and documents that must accompany applications
    for designation as a contract market.
    • To prevent market disruption, the proposed rules would require that DCMs implement trade risk control
    mechanisms, including pauses and halts to trading, under certain conditions.
    • The proposed rules would impose a minimum centralized market trading requirement for all contracts listed
    on a DCM, and proposes additional rules pertaining to specific aspects of block trades.
    Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080
    2

    • The proposed rules would require DCMs to meet specified financial resource requirements.
    • The proposed rules would require DCMs to establish operational and system safeguard requirements.
    • The proposed rules include specific requirements for DCMs that list swaps, including reporting,
    recordkeeping and compliance requirements.

    Who is affected by the proposed rulemaking?

    The entities affected by the proposed rules include all DCMs and DCM applicants that request designation as a
    contract market, and DCM market participants, DCM members and intermediaries.

    When will the new rules, guidance and acceptable practices take effect?

    The proposed rules, guidance and acceptable practices will take effect sixty days after publication of the final rules in
    the Federal Register.

    Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080

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