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2 Harv. Bus. L. Rev. Online 1 (2011-2012)

handle is hein.journals/hblro2 and id is 1 raw text is: DODD-FRANK ACT HAS ITS FIRST BIRTHDAY, BUT DERIVATIVES END USERS HAVE LITTLE CAUSE TO CELEBRATE fMichaelSackheim andEfizabeth .M. Schubert* A year has passed since the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). Title VII of the Dodd-Frank Act, entitled the Wall Street Transparency and Accountability Act of 2010 (Title VII) created a new transparent exchange-type trading marketplace for over-the-counter swaps subject to regulation by the Commodity Futures Trading Commission (CFTC) and security-based swaps subject to regulation by the Securities and Exchange Commission (SEC) (collectively, OTC derivatives or swaps). This article will discuss the significant impact Title VII has, and will continue to have, on the end user, or buy side, of the derivatives markets.' Background. Title VII repealed most of the exemptions for OTC derivatives created by the Commodity Futures Trading Modernization Act of 2000 (the CFMA). The new statute was enacted to reduce risk, increase transparency, and promote market integrity within the financial system by, among other things: (1) providing for the registration and comprehensive regulation of swap dealers and large end users, termed major swap participants; (2) imposing clearing and trade execution requirements on standardized OTC derivative products; (3) creating recordkeeping and real-time reporting regimes; and (4) imposing margin, capital, and position limits requirements on market participants. The CFMA opened the door for institutional traders having total assets exceeding $10 million, termed eligible contract participants (ECPs), to enter into privately * Michael Sackheim is a partner at Sidley Austin LLP, where he focuses on futures and derivatives regulatory, transactional and enforcement matters. Elizabeth M. Schubert is a partner at Sidley Austin LLP, where she focuses on futures and derivatives. ' Generally speaking, an end user is the party to a derivative contract that is a customer to a financial institution, or the non-dealer party to the transaction.

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