This FS Regulatory Brief addresses the CFTC’s essential elements of good faith and provides guidance for translating them into a robust swap dealer compliance program.
On December 31, 2012, registration requirements for swap dealers finally became a reality. Provisionally registered swap dealers became subject to various requirements under Title VII of the Dodd-Frank Act, and other requirements will roll into effect over the coming months.
In a number of no-action letters, exemptive orders and final rules under Dodd-Frank, the CFTC signaled that good faith compliance will be a relevant consideration when it exercises its discretion in assessing compliance under the new rules. Thus, good faith efforts to comply with new swap dealer regulatory requirements, particularly in this interim period of phased implementation, will be the key to mitigating compliance risk.