Who must register with the CFTC and/or SEC?
The Senate bill identifies four types of non-bank entities that must register with (and will be regulated by) the CFTC and/or SEC: • entities that maintain a substantial position in any major swap category (excluding swaps hedging commercial risks or positions maintained by a benefit plan) • entities whose swaps create substantial counterparty exposure that could have serious adverse effects on the financial stability of the U.S. banking system or financial markets • financial entities (including hedge funds) that are highly leveraged and maintain a substantial position in any major swap category • swap dealers The term “substantial position” is to be defined by the CFTC and SEC at a threshold prudent for oversight of entities that are systemically important or that can significantly impact the U.S. financial system. The Senate bill seems to cast a wider net, requiring more entities to register than the House bill, which, for example, did not require highly leveraged financial entities
