CFTC Adopts External Business Conduct Standards

April 12, 2012

On January 11, 2012, the Commodity Futures Trading Commission (the “CFTC”) approved final rules (the “Final CFTC Rules”) implementing the provisions of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) relating to external business conduct standards for swap dealers and major swap participants. The Final CFTC Rules follow a rule proposal published in December 2010 by the CFTC (the “CFTC Proposal”). Market participants commented that the CFTC Proposal would have imposed several unworkable requirements and restrictions, and in adopting the Final CFTC Rules, the CFTC took several steps to respond to the comments it had received and to harmonize its rules with the Securities and Exchange Commissions’ Proposal on external business conduct standards for security-based swap dealers and major security-based swap participants (“SEC Proposal”). The attached memo includes a discussion and analysis of key obligations under the final CFTC Rules as well as a detailed comparison of the Final CFTC Rules and the SEC Proposal.