17 CFR 23.500 - Definitions.

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§ 23.500 Definitions.
For purposes of this subpart I, the following terms shall be defined as provided.
(a) Acknowledgment means a written or electronic record of all of the terms of a swap signed and sent by one counterparty to the other.
(b) Bilateral portfolio compression exercise means an exercise in which two swap counterparties wholly terminate or change the notional value of some or all of the swaps submitted by the counterparties for inclusion in the portfolio compression exercise and, depending on the methodology employed, replace the terminated swaps with other swaps whose combined notional value (or some other measure of risk) is less than the combined notional value (or some other measure of risk) of the terminated swaps in the exercise.
(c) Confirmation means the consummation (electronically or otherwise) of legally binding documentation (electronic or otherwise) that memorializes the agreement of the counterparties to all of the terms of a swap transaction. A confirmation must be in writing (whether electronic or otherwise) and must legally supersede any previous agreement (electronically or otherwise). A confirmation is created when an acknowledgment is manually, electronically, or by some other legally equivalent means, signed by the receiving counterparty.
(d) Execution means, with respect to a swap transaction, an agreement by the counterparties (whether orally, in writing, electronically, or otherwise) to the terms of the swap transaction that legally binds the counterparties to such terms under applicable law.
(e) Financial entity means a counterparty that is not a swap dealer or a major swap participant and that is one of the following:
(1) A commodity pool as defined in Section 1a(5) of the Act;
(2) A private fund as defined in Section 202(a) of the Investment Advisors Act of 1940;
(3) An employee benefit plan as defined in paragraphs (3) and (32) of section 3 of the Employee Retirement Income and Security Act of 1974;
(4) A person predominantly engaged in activities that are in the business of banking, or in activities that are financial in nature as defined in Section 4(k) of the Bank Holding Company Act of 1956; and
(5) A security-based swap dealer or a major security-based swap participant.
(f) Fully offsetting swaps means swaps of equivalent terms where no net cash flow would be owed to either counterparty after the offset of payment obligations thereunder.
(g) Material terms means all terms of a swap required to be reported in accordance with part 45 of this chapter.
(h) Multilateral portfolio compression exercise means an exercise in which multiple swap counterparties wholly terminate or change the notional value of some or all of the swaps submitted by the counterparties for inclusion in the portfolio compression exercise and, depending on the methodology employed, replace the terminated swaps with other swaps whose combined notional value (or some other measure of risk) is less than the combined notional value (or some other measure of risk) of the terminated swaps in the compression exercise.
(i) Portfolio reconciliation means any process by which the two parties to one or more swaps:
(1) Exchange the terms of all swaps in the swap portfolio between the counterparties;
(2) Exchange each counterparty's valuation of each swap in the swap portfolio between the counterparties as of the close of business on the immediately preceding business day; and
(3) Resolve any discrepancy in material terms and valuations.
(j) Prudential regulator has the meaning given to the term in section 1a(39) of the Commodity Exchange Act and includes the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Farm Credit Association, and the Federal Housing Finance Agency, as applicable to the swap dealer or major swap participant.
(k) Swap portfolio means all swaps currently in effect between a particular swap dealer or major swap participant and a particular counterparty.
(l) Swap transaction means any event that results in a new swap or in a change to the terms of a swap, including execution, termination, assignment, novation, exchange, transfer, amendment, conveyance, or extinguishing of rights or obligations of a swap.
(m) Valuation means the current market value or net present value of a swap.
[77 FR 55960, Sept. 11, 2012]

Title 17 published on 2014-04-01

The following are only the Rules published in the Federal Register after the published date of Title 17.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-07-15; vol. 79 # 135 - Tuesday, July 15, 2014
    1. 79 FR 41126 - Swap Dealer and Major Swap Participant Recordkeeping, Reporting, and Duties Rules; Futures Commission Merchant and Introducing Broker Conflicts of Interest Rules; and Chief Compliance Officer Rules for Swap Dealers, Major Swap Participants, and Futures Commission Merchants; Correction
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      COMMODITY FUTURES TRADING COMMISSION
      Correcting amendments.
      Effective July 15, 2014.
      17 CFR Part 23

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United States Code
Statutes at Large

Title 17 published on 2014-04-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 17 CFR 23 after this date.

  • 2014-10-03; vol. 79 # 192 - Friday, October 3, 2014
    1. 79 FR 59898 - Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants
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      COMMODITY FUTURES TRADING COMMISSION
      Proposed rule; advance notice of proposed rulemaking.
      Comments must be received on or before December 2, 2014.
      17 CFR Parts 23 and 140