Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo has released a white paper, Swaps Regulation Version 2.0: An Assessment of the Current Implementation of Reform and Proposals for Next Steps, co-authored with CFTC Chief Economist Bruce Tuckman.

The paper takes a comprehensive look at five key areas: central counterparties (CCPs); reporting rules; execution rules; Swap Dealer capital; and End User exceptions.

Among other things, the paper: challenges restrictive execution methods specified in the context of existing execution rules; raises the possibility of relying more heavily on the internal risk models used by banks and their swap affiliates to set capital requirements; and discusses the potential for material swaps exposure thresholds, below which entities would be excepted from clearing and margin requirements.

AIMA will be developing a position on the suggestions put forward in the white paper, in anticipation of future CFTC rulemaking on this topic. If you have comments or questions, please contact Adam Jacobs-Dean and Uzi Rosha.