CFTC Announces that Mandatory Clearing for Category II Entities Begins Today

Today, the CFTC announced that it has implemented the second phase of required clearing for credit default swaps and interest rate swaps.  This so-called “category II” clearing deadline, which applies to buyside institutions such as commodity pools, hedge funds and non swap dealer banks, requires firms to clear derivatives trades through a centralized clearing party.  The “category I” clearing deadline, which applied a similar set of rules to swap dealers, was implemented on March 10 of this year.

In a statement issued today, CFTC Chairman Gary Gensler commented:

“Today marks another critical step on the path to financial reform. Most financial entities will be required to bring certain credit default and interest rate swaps into central clearing. Clearing benefits the public by lowering the risk of the interconnected swaps market to the rest of the economy. It also significantly promotes competition by broadening access to the market.”

To read the full CFTC announcement, click here.

To read Tradeweb CEO Lee Olesky’s op-ed about the category II clearing deadline, which was published Friday in The Financial Times, click here.