"CFTC Issues Final Rules on Customer Clearing Documentation, Timing of Acceptance for Clearing, and Clearing Member Risk Management"

On April 9, 2012, the Commodity Futures Trading Commission (the "CFTC") published final rules (the "Final Rules") pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act addressing: (i) documentation between a customer and a futures commission merchant ("FCM") that clears on behalf of such customer; (ii) the timing of acceptance or rejection of trades for clearing by derivatives clearing organizations and clearing members; and (iii) risk management for cleared trades by FCMs, swap dealers, and major swap participants that are clearing members.  According to the CFTC, the Final Rules are designed to increase customer access to clearing and to facilitate the timely processing of trades while strengthening risk management at the clearing member level.

This Stroock Special Bulletin summarizes and explains key provisions of the Final Rules.