Swap dealers and large hedge funds will be required to clear certain swaps starting in March 2013, under final rules unanimously approved by the Commodity Futures Trading Commission. The CFTC’s first final clearing determination completes the agency’s effort to establish a regulatory framework for central clearing as mandated by Dodd-Frank.
The final rules require certain credit default swaps and interest rate swaps to be cleared by registered derivatives clearing organizations. Under the determination, market participants are required to submit a swap that is identified in the rule for clearing by a DCO as soon as technologically practicable and no later than the end of the day of execution.