The CFTC held a public meeting to consider 2 final rules on:  (i) Real-Time Reporting of Swap Transaction Data;  and, (ii) Swap Data Recordkeeping and Reporting Requirements.  A 3rd rule on the "Effective Date for Swap Regulation" had been scheduled for consideration at this meeting, but it was approved in advance. Both rules, which passed unanimously, require traders, banks and new data repositories for the swaps market to record trading data and turn over some of the information to regulators.  Regulators, in turn, are required to make part of the data available to the public at least twice a year, but have indicated they could eventually release data reports more frequently. The new rules will, for the first time, give regulators a window into the market for "swaps."  Up until this point, this market had been an unregulated, yet, significant and volatile corner of the financial markets that played a role in the 2008 financial crisis.  Before Dodd-Frank, regulators had been specifically forbidden from regulating the swaps market by an earlier law.

"Leading up to the financial crisis, there was no required reporting about swaps trading, and this lack of market transparency made the risk that had spread throughout the financial system all the more difficult to identify." -- Gary Gensler, CFTC Chairman.

The CFTC is in the process of finalizing a host of new rules for "swaps," derivatives that are traded OTC rather than on an exchange.  The CFTC was delegated most of the responsibility for overseeing this market under the Dodd-Frank Reform Act.  Lawmakers decided to rein in the swaps market after the sometimes-complicated deals added leverage to the financial system that contributed to the financial crisis. In addition to making market data more available to regulators and the public, the new regulations will require that traders buy and sell many types of swaps on trading platforms and then route them through clearinghouses that collect money from both sides of the deal and secure the trade in case of default. The CFTC said it will meet twice in January 2012 to continue work on Dodd-Frank rules. Swaps market analyst Kevin McPartland, a principal with research-firm TABB Group, said the new rules will greatly increase amount of available data on each trade. "We're going from a world where there was almost no market data to a world where it will be regulated into existence," Mr. McPartland said, adding that now "everyone will have streaming data on these markets." He estimates that the Dodd-Frank derivatives regulations will cost the industry $1.8 billion in total but hasn't separated out the cost for the data rules. For further details, go to:   [WSJournal, 12/21/11]   and    [CFTC Event, 12/20/11].