In the wake of the 2008 financial crisis the regulators in the U.S. enacted the Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Title VII of the Dodd-Frank Act establishes a new regulatory framework for over-the-counter (OTC) derivatives (“swaps” and “security-based swaps”) and encompasses rules in regards to trade execution, clearing and reporting of these. It also defines and regulates new counterparty categories such as Swap Dealers and Major Swap Participants and introduces rigorous record keeping requirements. In Europe, corresponding regulation is currently being implemented though EMIR (clearing and reporting) and later on through MiFID II (trade execution).
The Dodd-Frank Act (Title VII – Wall Street Transparency and Accountability) amends the Commodity Exchange Act (CEA) and the Securities Exchange Act (SEA) by establishing new regulatory frameworks for swaps and security-based swaps. The new regulation encompasses: