US agrees risk rules for swaps

City A.M. Reporter
MAJOR swaps players will face new risk management requirements under rules finalised by the Commodity Futures Trading Commission (CFTC) yesterday.

The rules, which the agency approved unanimously in a closed-door vote, will dictate the way major swaps industry participants document and reconcile their swaps trades. They also detail how swaps will be valued and netted.

“Proper documentation of swaps is critical to reducing risk,” the CFTC said. The CFTC was tasked by the 2010 Dodd-Frank financial reform with increasing transparency and limiting risk in the swaps market.