Compliance staff and operations staff at companies and banks that deal in US swaps come to this topic when they check which laws and authorities apply to a transaction.

What the rules aim to do

In 2009, G20 Leaders recognized the role that the over-the-counter derivatives market played in the global financial crisis and committed to reforming it1. The US enacted the Dodd-Frank Act on July 21, 20102. Its formal name is the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111-203). One of its purposes is to improve accountability and transparency in the financial system and so promote the financial stability of the United States3.

In the regulation of derivatives, Title VII set new rules for the market in swaps, including OTC derivatives. The short title of Title VII is the "Wall Street Transparency and Accountability Act of 2010"4.

Main laws

US derivatives regulation is not a single law but a combination of the laws below. The Dodd-Frank Act built its rules by adding new provisions to the existing Commodity Exchange Act and Securities Exchange Act of 1934 (the Exchange Act).

Law What it covers for derivatives
Commodity Exchange Act (CEA) The law that regulates futures and swaps. The Dodd-Frank Act added clearing, registration, and other provisions5
Exchange Act The law that regulates security-based swaps. The Dodd-Frank Act added clearing, reporting, and registration provisions6
Title VII of the Dodd-Frank Act Divided into Subtitle A, which regulates over-the-counter swaps markets, and Subtitle B, which regulates security-based swap markets7
Title VI of the Dodd-Frank Act (Section 619) Sets the Volcker Rule, which in general prohibits banks from proprietary trading8

The versions of the statutes were checked as of October 12, 2026 for Public Law 111-203, October 3 and 6, 2026 for the United States Code, and September 30, 2026 for the Code of Federal Regulations.

Main authorities

Different authorities write and supervise the rules under each law. The table below shows each authority's role.

Authority Role
Commodity Futures Trading Commission (CFTC) Administers the CEA and regulates swaps. Swap dealers also register with the CFTC9
Securities and Exchange Commission (SEC) Regulates security-based swaps and takes registrations from security-based swap dealers1011
Prudential regulators Oversee swap dealers that are banks or similar entities, and set their capital and margin rules1213

The CFTC generally has exclusive jurisdiction over swaps and futures traded on designated contract markets and swap execution facilities14.

Before writing swap rules, the CFTC is required by statute to consult and coordinate, to the extent possible, with the SEC and the prudential regulators. The SEC is likewise required to consult and coordinate, to the extent possible, with the CFTC and the prudential regulators on security-based swap rules15.

Types of rules

Derivatives rules can be read as six types: clearing, execution on a trading venue, reporting, registration, margin and capital, and proprietary trading. The table below shows the legal basis for five of them, the Title VII rules, split between swaps (CEA) and security-based swaps (Exchange Act). Subsections and paragraphs are given in the footnotes.

Rule Swaps (CEA) Security-based swaps (Exchange Act)
Clearing A swap that is required to be cleared must be submitted to a registered or exempt clearing organization (Section 2)16 A security-based swap that is required to be cleared must be submitted to a registered or exempt clearing agency (Section 3C)17
Execution on a trading venue A swap that is required to be cleared is executed on a designated contract market or a swap execution facility (Section 2)18 A security-based swap that is required to be cleared is executed on an exchange or a security-based swap execution facility (Section 3C)19
Reporting Transaction and pricing data are publicly disclosed whether or not the swap is cleared (Section 2), and a swap that no clearing organization accepts is reported to a swap data repository, or to the CFTC if no repository would accept it (Section 4r)20 A security-based swap that no clearing agency accepts is reported to a security-based swap data repository or to the SEC (Section 13A)21
Registration Swap dealers and major swap participants register with the CFTC (Section 4s). Operators of trading venues must also register (Section 5h)22 Security-based swap dealers and major security-based swap participants register with the SEC (Section 15F)23
Margin and capital Minimum capital and margin on uncleared swaps are set by the prudential regulator where one exists for the entity, and otherwise by the CFTC (Section 4s)24 The same structure of provisions applies to security-based swap dealers (Section 15F)25

Proprietary trading is a separate set of rules aimed at banks. Title VI placed it in the Bank Holding Company Act26. Its substance is covered in The Volcker Rule.

Rules in the Code of Federal Regulations

The statutes set the framework, and the authorities write the detailed requirements in the Code of Federal Regulations (CFR). The table below shows the parts of the CFTC's rules that correspond to the rules above.

Rule Regulation Content
Clearing 17 CFR Part 50 Specifies the classes of swaps that must be cleared, and requires every person who executes a covered swap to submit it to a clearing organization27
Reporting 17 CFR Part 43 and Part 45 Part 43 governs public disclosure of transactions and prices, and Part 45 governs reporting to swap data repositories28
Trading venues 17 CFR Part 37 Sets the registration requirements for swap execution facilities29
Registration, margin and capital 17 CFR Part 23 Sets registration, capital and margin, and trade records, among other things, for swap dealers and major swap participants30

Swaps, security-based swaps and futures

US law does not treat derivatives as one group. The authority and the rules differ by the name of the transaction. The CEA defines a "swap" as an option or a contract to exchange payments based on interest rates, currencies, commodities, or securities31. It excludes futures and security-based swaps from that definition. The Exchange Act defines a "security-based swap" as a swap based on a single security or loan, a narrow-based index of securities, and the like32. The detailed criteria for classification, and how transactions with features of both are handled, are covered in The Roles of the CFTC and SEC.

Futures are mainly the CFTC's responsibility under the CEA.

NoYesIs it a contract of saleof a commodity for futuredelivery (a future)?A future.Mainly theCFTC under theCEAYesNoIs it an option orpayment exchange onrates, FX, commodities,securities, etc.?Outside theswapdefinitionNoYesDoes it fall within thedefinition of asecurity-based swap?Security-basedswap.ExchangeAct/SECA swap. CEA/CFTC
Figure 1A decision flow for finding the responsible authority from a transaction's name
Figure description

The figure traces which authority has jurisdiction from the name of the transaction, through three questions in order. A yes to the first stops at a future. A no to the second stops at outside the swap definition, and a yes to the third stops at a security-based swap. A transaction that is neither a future nor a security-based swap and falls within the definition is a swap. A transaction with features of both cannot be classified by these three questions.

Example: transactions between Bank C and Company D

Consider a hypothetical example in which Bank C, a US bank registered as a swap dealer, enters into two transactions with Company D. Look at them in the order of Figure 1.

Transaction Name of the transaction Legal basis and authority Registration, and capital and margin
Bank C and Company D enter into a contract to exchange payments based on an interest rate Swap The CEA and the CFTC Bank C registers with the CFTC, and its capital and margin follow the prudential regulator's rules
Bank C and Company D enter into a contract to exchange payments based on the shares of a single company Security-based swap The Exchange Act and the SEC Bank C registers with the SEC if it acts as a security-based swap dealer

Even for the same two parties, Bank C and Company D, the law that applies and the place of registration change with what the transaction is based on. For the transaction in row 1, the prudential regulator sets the margin rules when the swap is not cleared. If the swap is of a class that is required to be cleared and no exemption applies, it is submitted to a clearing organization. In row 2, the same structure of provisions applies to capital and margin.

Whether the transaction in row 1 is subject to clearing, and whether an exemption applies, are decided by the CFTC rules that specify the classes of swaps (17 CFR Part 50) and others, and this example does not decide them.

Details of clearing, reporting, and registration

What this page does not cover

This page does not cover the SEC's rules or the substance of the rules on futures.

Notes

  1. Financial Stability Board, "Review of OTC derivatives market reforms" (June 2017), 1 "Executive summary", opening (page 1). ↩

  2. "Public Law 111-203", the closing line "Approved July 21, 2010." and the heading "July 21, 2010 - [H.R. 4173]". ↩

  3. "Public Law 111-203", opening of the preamble. ↩

  4. "Public Law 111-203", table of contents (Title VII) and Section 701 (short title). ↩

  5. "Public Law 111-203", Section 723 (CEA Section 2(h), clearing), Section 731 (CEA Section 4s, registration of swap dealers and major swap participants), and Section 733 (CEA Section 5h, swap execution facilities). ↩

  6. "Public Law 111-203", Section 763 (Exchange Act Section 3C, clearing), Section 764 (Section 15F, registration), and Section 766 (Exchange Act Section 13A, reporting and recordkeeping). ↩

  7. "Public Law 111-203", table of contents. In Title VII, Subtitle A covers Sections 711 to 754 and Subtitle B covers Sections 761 to 774. ↩

  8. "Public Law 111-203", Section 619 (Bank Holding Company Act Section 13(a)(1)). Except as otherwise provided, a banking entity may not engage in proprietary trading or acquire, retain, or sponsor a hedge fund or private equity fund. The name is from 84 FR 35008, I. Background. ↩

  9. "Public Law 111-203", CEA Section 4s(a)(1), added by Section 731. A person acting as a swap dealer must register with the CFTC. ↩

  10. "Public Law 111-203", Section 722(a)(2) (CEA Section 2(a)(1)(G)(i)). The CFTC jurisdiction provisions in CEA Section 2(a)(1) do not limit the SEC's jurisdiction over security-based swaps and the like. ↩

  11. "Public Law 111-203", Exchange Act Section 15F(a)(1), added by Section 764. A person acting as a security-based swap dealer must register with the SEC. ↩

  12. 7 U.S.C. § 1a(39). Defines the prudential regulator for each kind of swap dealer and the like that it oversees. ↩

  13. "Public Law 111-203", CEA Section 4s(e)(1)(A) and (2)(A), added by Section 731. A swap dealer or major swap participant with a prudential regulator must meet the minimum capital and the minimum initial and variation margin that regulator sets. ↩

  14. 7 U.S.C. § 2(a)(1)(A), first sentence. Except as otherwise provided in the Dodd-Frank Act and elsewhere, the CFTC has exclusive jurisdiction over swaps and futures transactions traded or executed on a designated contract market, a swap execution facility, and the like. ↩

  15. "Public Law 111-203", Section 712(a)(1) and (a)(2). The consultation and coordination applies only to the extent appropriate to the content of the rule or order, and (a)(4) provides for cases where it does not apply. ↩

  16. "Public Law 111-203", CEA Section 2(h)(1)(A), added by Section 723(a)(3). It is unlawful to engage in a swap that is required to be cleared unless it is submitted to a registered or exempt clearing organization. ↩

  17. "Public Law 111-203", Exchange Act Section 3C(a)(1), added by Section 763. It is unlawful to engage in a security-based swap that is required to be cleared unless it is submitted to a registered or exempt clearing agency. ↩

  18. "Public Law 111-203", CEA Section 2(h)(8)(A), added by Section 723(a)(3). It does not apply if no exchange or swap execution facility makes the swap available to trade ((B)). ↩

  19. "Public Law 111-203", Exchange Act Section 3C(h)(1), added by Section 763. It does not apply if no exchange or security-based swap execution facility makes the swap available to trade ((h)(2)). ↩

  20. "Public Law 111-203", CEA Section 4r(a)(1), added by Section 729 ((A) reporting to a repository, (B) reporting to the CFTC if no repository would accept the swap), and CEA Section 2(a)(13), added by Section 727 (real-time public reporting). (a)(13)(C) requires public reporting whether or not the swap is cleared. ↩

  21. "Public Law 111-203", Exchange Act Section 13A(a)(1), added by Section 766. A security-based swap that no clearing agency or derivatives clearing organization accepts is reported to a security-based swap data repository, or to the SEC if there is none that accepts it. ↩

  22. CEA Section 4s(a)(1) and (2) ("Public Law 111-203", Section 731) and Section 5h(a)(1) (Section 733). A person that operates a facility for the trading or processing of swaps must register as a swap execution facility or a designated contract market. ↩

  23. "Public Law 111-203", Exchange Act Section 15F(a)(1) and (a)(2), added by Section 764. ↩

  24. "Public Law 111-203", CEA Section 4s(e)(1)(A) and (B) and (e)(2)(A) and (B), added by Section 731. (B) provides that, where no prudential regulator exists, the CFTC sets the rules on capital and on margin for uncleared swaps. ↩

  25. "Public Law 111-203", Exchange Act Section 15F(e)(1) and (2), added by Section 764. It sets the roles of the prudential regulators and the SEC with the same structure as CEA Section 4s(e). ↩

  26. "Public Law 111-203", Section 619 (Bank Holding Company Act Section 13; 12 U.S.C. 1851) (a)(1)(A). ↩

  27. 17 CFR Part 50. Section 50.2(a) requires every person who executes a swap of a class specified in § 50.4 to submit it to the relevant clearing organization. Exceptions include § 50.50. ↩

  28. 17 CFR § 43.1(a) (the purpose of Part 43: reporting and public disclosure of swap transaction and pricing data) and § 45.3 (Part 45: reporting of swap creation data to swap data repositories). ↩

  29. 17 CFR § 37.1 (scope of Part 37) and § 37.3(a)(1) (the requirement that an operator of a facility on which multiple participants can trade with multiple participants register as a swap execution facility or a designated contract market). ↩

  30. 17 CFR Part 23, Subpart B (Registration), Subpart E (Capital and Margin Requirements for Swap Dealers and Major Swap Participants), Subpart F (Reporting, Recordkeeping, and Daily Trading Records Requirements), and Subpart H (Business Conduct Standards). ↩

  31. 7 U.S.C. § 1a(47)(A) (options and contracts to exchange payments), (B)(i) (excluding contracts of sale of a commodity for future delivery and options on them), and (B)(x) (excluding security-based swaps, other than those described in (D)). ↩

  32. 15 U.S.C. § 78c(a)(68)(A). A swap under CEA Section 1a (without regard to Section 1a(47)(B)(x)) that is based on a narrow-based security index, a single security or loan, or events relating to a single issuer or the issuers in a narrow-based security index. An event-based swap qualifies only if the event directly affects the financial statements, financial condition, or financial obligations of the issuer. ↩