1 CFTC STAFF TECHNICAL ASSISTANCE:

2 SENATE BILL IMPLEMENTATION ISSUES AND

3 EFFECTIVE DATES FOR CFTC PROVISIONS

5 [Explanation: First, CFTC staff is concerned about some of the implementation issues

6 surrounding the new legislation. For example, it would be helpful to have very clear authority to

7 begin promulgating regulations immediately following the date of enactment, even if those

8 regulations will not become effective until a later date. While it is possible to read the Senate

9 Bill to provide for that authority, a very clear statement is preferable.

10 In a related vein, for some provisions, such as those that require registration with the

11 CFTC, it is possible that, on the day on which the provision becomes effective, there will be a

12 large number of applicants seeking to register that day so that they will not be acting unlawfully.

13 A provision that would allow the CFTC to accept applications and register persons ahead of the

14 effective date, pursuant to regulations promulgated under the new law, would limit the crush of

15 registrants at the effective date.

16 In the case of those provisions in which the Senate Bill grants CFTC the authority to

17 exempt persons or contracts from its requirements, the CFTC should be permitted to provide

18 those exemptions prior to the effective date so that parties could be aware of their status and the

19 legality of their conduct before the new law becomes effective.

20 Below is proposed statutory text that would accomplish all of these purposes in order to

21 ensure the orderly implementation of the new swaps regulatory regime on its effective date.

22 Second, regarding effective dates, there are some provisions of the Senate Bill that could

23 become effective immediately, if Congress chooses to do so. The table below lists those

CFTC-CREW-0088
 1 provisions that CFTC staff believes could be made effective upon enactment. These effective

2 dates could be added into the general effective date provision found in Section 754 of the Senate

3 Bill.]

5 Statutory Text to Address Implementation Issues

6 On page 503 of the Senate Bill, after line 9, insert the following:

7 (h) RULES AND REGISTRATION BEFORE FINAL EFFECTIVE DATEs.-Beginning on the date

8 of enactment of this Act and regardless of the effective date of any provision of this Act, the

9 Commodity Futures Trading Commission may, in order to prepare for the effective dates of the

10 provisions of this Act-

11 (1) promulgate rules, regulations, or orders;

12 (2) conduct studies and prepare reports and recommendations required by this

13 Act;

14 (3) register persons under the provisions of this Act; and

15 (4) exempt persons, agreements, contracts, or transactions from provisions of this

16 Act, under the terms contained in this Act.

17 Provided, however, that no action by the Commodity Futures Trading Commission described in

18 paragraphs (1) through (4) shall become effective prior to the effective date applicable to such

19 action under the provisions of this Act.

20

CFTC-CREW-0089
1 Possible Effective Dates Upon Enactment

2 The following provisions could be made effective upon the date of enactment of the legislation,

3 if Congress chooses to do so:

Subject Senate Bill Section

Short Title 701
Definitions 711
Review of Regulatory Authority 712
Recommendations for Changes to Portfolio Margining Laws 713
Abusive Swaps 714
New Product Approval-CFTC-SEC Process 717
Determining Status of Novel Derivative Products 718
Definitions 721 1
Clearing (grandfathering) 723(c)(l)-(2)
Rulemaking on Conflict of Interest 726
Foreign Boards of Trade 738
Enforcement (retail forex) 74 1(b)(9)-(l1)
Retail Commodity Transactions 742
Other Authority 743
Restitution Remedies 744
Study on Oversight of Carbon Markets 750
Energy and Environmental Markets Advisory Committee 751
International Harmonization 752
4

1 The definitions in Section 721 could be made effective upon enactment, except that the swap-related provisions of
the following definitions should not become effective until the effective date of the new swaps regime: §721(a)(5)
(Commodity Pool); §721(a)(6) (Commodity Pool Operator); §721(a)(7) (Commodity Trading Advisor); §721(a)(1O)
(Floor Broker); §721(a)(1l) (Floor Trader); §721(a)(13) (Futures Commission Merchant); and §721(a)(l5)
(Introducing Broker).

CFTC-CREW-0090