Since there is no pre-regulatory experience of swap contracts and large swap participants and the rules are similar to the proposed rules, the actual and average number of likely counterparties by an exchanger or a major swap participant and the average size of its portfolio with certain counterparties are uncertain. In accordance with other proposed rules, the Commission estimates that each of the 14 major interchanges has an average of 7,500 counterparties and that the other 286 interchanges and large participants have an average of 200 counterparties per year, or an average of 540 counterparties per filer. The proposed regulation would be an important part of the Commission`s regulatory programme for swap contracts and key swap participants. The information to be retained would be used by the representatives of the Commission and any audit authority responsible for verifying the activities of the trader in exchange or the main trader, in order to ensure compliance with the AEC and the commission`s applicable rules. The basic architecture consists of four documents, each described below: (I) a letter of loyalty, (II) the questionnaire, (III) the agreement on the protocol and (IV) the DF supplement. In addition, the DF terms agreement in a fifth document extends the fundamental architecture of the protocol to situations in which the parties wish to act in exchange without a master`s agreement being reached between them. The conditions of the DF are discussed in detail in questions 16-20 below. c) review of the swap trade relationship documentation. At least once a calendar year, each swap trader and participant in a principal swap must have at least 5% of the swap trading relationship documentation in this section, established in this section, verified by an internal or external auditor, to ensure compliance with the Commission`s rules and written policies and procedures established in accordance with this section. The recording of the results of each test is maintained. The March 2013 protocol is largely aimed at facilitating compliance with CFTC rules by swap traders and key swap participants, who require these parties (i) to obtain securities for swaps for risk management purposes and (ii) to obtain portfolio votes. We begin with an overview of these CFTC rules in order to get the protocol understood. The March 2013 protocol also refers to the CFTC`s mandatory compensation provision and the exemption of end-users, which are discussed as part of the protocol requirements.
Like the other elements of the DF protocol, the DF Terms Agreement distinguishes between the parties who make the insurance and the agreements in the DF supplement (these parties are called « DF conditions » principles in the DF terms agreement) and the parties who can execute the DF terms agreement as agents for those parties.