"Isn’t That Special? CFTC’s Final Business Conduct Rules"

On January 11, 2012, the Commodity Futures Trading Commission (the "CFTC") approved final rules under new Section 4s(h) of the Commodity Exchange Act, which was added pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank"). The final rules (the "Final CFTC Rules") relate to business conduct standards with respect to over-the-counter swaps for swap dealers and major swap participants generally, and also specifically in connection with so-called "Special Entities" such as employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and governmental plans and other entities.

Separately, the Securities and Exchange Commission has issued proposed business conduct rules under authority granted to it under Section 15F(h) of the Securities Exchange Act of 1934 with respect to security-based swap dealers and major security-based swap participants.

This article provides an overview of the Final CFTC Rules, which address many of the significant issues raised by the CFTC's proposed rules, are more protective of Special Entities, such as ERISA Plans, and better reflect the legislative intent of Congress. This article also discusses a number of the interpretational and operational challenges posed by these rules.