US shakes up swap dealing rules as implements Frank-Dodd reform

THE US futures regulator released proposals to govern the “back office” functions of swap dealers and other big players yesterday, but said more controversial elements for swaps participants remained to be determined.

The rules, including new firewalls between analysts and traders, are part of a series of 50 to 60 regulations to implement the Commodity Futures Trading Commission’s (CFTC) share of the Dodd-Frank Wall Street reform law.

“These standards for ‘back office’ functions will help reduce risks because they require senior management of swap dealers to have in place policies to oversee the risks of their swaps desks,” CFTC chairman Gary Gensler said in a speech yesterday.

The rules aim to reduce risk in the $615 trillion over-the-counter market.