Does an associated person of a swap dealer have to register with the CFTC?
Associated persons (AP) of an SD do not need to register with the CFTC. However, individuals who seek to act as AP of an SD are required to complete NFA’s Swaps Proficiency Requirements prior to acting in the capacity of an AP at an SD.
How do I register for swap?
A completed online Form 7-R application (including NFA membership sections) A completed online Form 8-R application, fingerprint cards, and a non-refundable applicant fee of $85 for each principal. A non-refundable application fee of $15,000.
Who carries out CFTC registration function for swap dealers?
The CFTC has delegated registration responsibility to NFA. All futures professionals required to register with the CFTC are granted registration only after a thorough investigation of their background to determine if they meet the fitness standards set forth in the CEA.
What is a registered swap dealer?
A swap dealer is an individual or entity that serves as a swaps broker, makes markets in swaps, or enters into swaps contracts with counterparties.
Who regulates swap dealers?
the Securities and Exchange Commission
Under this framework, the Securities and Exchange Commission regulates security-based swaps, the Commodity Futures Trading Commission regulates swaps, and the two agencies jointly regulate mixed swaps.
Why are swap dealers provisionally registered?
What does it mean for a swap dealer or major swap participant to be “provisionally registered”? It means that the National Futures Association has received a Form 7-R from the SD or MSP.
What are swap agreements?
A swap is an agreement for a financial exchange in which one of the two parties promises to make, with an established frequency, a series of payments, in exchange for receiving another set of payments from the other party. These flows normally respond to interest payments based on the nominal amount of the swap.
Which is a type of swap?
The generic types of swaps, in order of their quantitative importance, are: interest rate swaps, basis swaps, currency swaps, inflation swaps, credit default swaps, commodity swaps and equity swaps.
Who are security-based swap dealers?
Security-based swap users are participants in the market who are not required to register with the SEC. There are rules defining the types of counterparties considered to be major security-based swap participants and dealers.
How does a swap dealer make money?
The swap dealer will, in turn, agree to pay the party the market price of the commodity. These cash flows will net out each period, and the party who must pay more will pay the difference. On the other side, the swap dealer will also find a party looking to pay the floating price of the commodity.
Are swaps 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.
Who would use a swap?
The objective of a swap is to change one scheme of payments into another one of a different nature, which is more suitable to the needs or objectives of the parties, who could be retail clients, investors, or large companies.
When should I register as a security-based swap dealer?
However, some market participants may expect that “the earliest date on which the registration of security-based swap dealers is first required” would be November 1, 2021, which is the latest date by which a person that meets the definition of “security-based swap dealer” as of August 6, 2021, should register with the Commission.
Are you underestimating the effort required to implement the swap dealer rules?
There is serious risk of organizations underestimating the level of effort required to implement the SEC swap dealer rules due to a misperception that this is only a small incremental addition to the existing program.
What is a swap dealer (SD)?
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.
What are the NFA swaps proficiency requirements?
Effective January 31, 2020, individuals acting as associated persons of an SD will be required to complete NFA’s Swaps Proficiency Requirements by the compliance date of January 31, 2021. However, it is the SD’s obligation to determine whether or not a statutory disqualification exists for any of its APs.
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