Swap-Clearing Rule Gets Final Approval from CFTC

Dodd-Frank measure requires largest dealers to guarantee trades at clearinghouses.

Wall Street’s largest swap dealers, including Goldman Sachs Group Inc. and JPMorgan Chase & Co., will be required to guarantee trades at clearinghouses starting in March under a rule made final by the top U.S. derivatives regulator.

The five-member Commodity Futures Trading Commission voted unanimously in a private process yesterday to complete the final determinations, the agency said in a statement. The rule, which had been scheduled for a public vote, determines which credit and interest-rate swaps must be guaranteed at clearinghouses owned by LCH.Clearnet Group Ltd., CME Group Inc. and Intercontinental Exchange Inc. The commissioners can vote on paper outside of their public meetings in a process known as seriatim.

‘New Market’

The CFTC requirements will help promote clearing of trades between dealers and asset managers that buy swaps, Richard Repetto, a New York-based analyst at Sandler O’Neill & Partners LP, said in a telephone interview yesterday. “It may not come immediately in March but this is setting the structure in place for a new market,” Repetto said before the announcement.

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