The Three Regulatory Changes Addressed by Dodd-Frank Protocol 2.0

Insights The Three Regulatory Changes Addressed by Dodd-Frank Protocol 2.0 Robin Powers · May 22, 2013


DF Protocol 2.0 (or the March DF Protocol) is intended to address the requirements of three rules finalized in the latter half of 2012, too late to be covered by the August DF Protocol. More specifically, DF Protocol 2.0 addresses (a) the end-user exceptionto the clearing requirement for swaps; (b) the clearing requirement determinationthat mandates clearing for certain classes of interest rate swaps and credit default swaps; and (c) the rule entitled “Confirmation, Portfolio Reconciliation, Portfolio Compression, and Swap Trading Relationship Documentation Requirements for Swap Dealers and Major Swap Participants.”

The structure of, and adherence process for, DF Protocol 2.0 is similar to that of the August DF Protocol. Adhering parties must complete and deliver to each of their counterparties a Protocol Questionnaire, which, among other things, provides certain identifying and contact information, identifies whether the adhering party falls into certain regulatory categories established in the Commodity Exchange Act (CEA) and in Commodity and Futures Trading Commission (CFTC) regulations, and specifies whether the adhering party wishes to avail itself of certain exceptions or exemptions from the applicable CFTC rules. DF Protocol 2.0 is independent of the August DF Protocol. Adherence to the August DF Protocol does not imply or require adherence to DF Protocol 2.0 (and vice versa).

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