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Bailey McCann, Opalesque New York: In April, the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC), published rules that define several activities and market participants including - swaps, swap dealers, major participants and eligible contract participants. The new rules are notable because as soon as these areas are defined the Dodd-Frank Act is triggered. In this case, individuals that are required to registered as a swap dealer or participant will have 60 days to register from the effective date of the new definitions and rules in order to comply with Dodd-Frank.

According to a client alert from US-based law firm Shulte, Roth and Zable, while most private investment funds will not have to register as swap dealers, they will be impacted by individuals who do have to register as new rules will require that swap dealers ask for new collateral requirements from fund counterparties.

Of the new rules, private investment funds are unlikely to meet any of the requirements except for those of eligible contract participants (ECP). Prior to Dodd-Frank, a commodity pool was an ECP it if had $5 million in total assets, regardless of whether all of the participants in the commodity pool were ECPs. Lawyers writing in the alert note that now, "with retail foreign exchange transactions, Dodd-Frank imposes a requirement that all direct participa......................

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