The SEC voted unanimously to propose capital, margin, and segregation requirements for security-based swap dealers and major security-based swap participants in order to regulate the over-the-counter swaps markets, as required by Dodd-Frank. The SEC's proposed rules are intended to accomplish the following: Set minimum capital requirements for security-based swap dealers and major security-based swap participants. Establish margin requirements for security-based swap dealers and major security-based swap participants with respect to non-cleared security-based swaps. Establish segregation

The SEC charged a former $1 billion hedge fund advisory firm and two executives with misrepresenting the safety and liquidity of the investments made by the hedge funds, and charging excessive fees to the funds based on the fraudulently inflated values of the investments. According to the press release, this is the seventh case arising from the SEC's Aberrational Performance Inquiry that uses proprietary risk analytics to identify hedge funds with suspicious returns. (In other words, the SEC looks for funds whose performance is too high to be true or, as in the case of Madoff, too consistent

SEC Chief Economist and Director Craig M. Lewis delivered a speech about economic analysis in support of Commission rulemakings. Lewis paid particular attention to the role of economists from the Division of Risk, Strategy, and Financial Innovation ("RSFI"), and the recently issued guidance on economic analysis. In his speech, Lewis provided an overview of the major topics within The Guidance (i.e., a document providing a high-level approach to economic analysis, drawing on concepts from various sources, including guidance issued by the Office of Management and Budget, congressional

The CFTC approved a final rule that amends numerous regulations, listed below, so that they now reference swaps and the collateral for swaps, as well as futures. Note that the rule changes will become effective 60 days after the final rule is published in the Federal Register. Effective Date: [INSERT DATE 60 DAYS AFTER PUBLICATION IN THE FEDERAL REGISTER]. Cross-Reference(s): Dodd-Frank Title VII; CFTC Regulations Parts 1 (General Regulations), 4 (CPOs and CTAs), 5 (Off-Exchange FX Transactions), 7 (Contract Market Rules Altered or Supplemented by the Commission), 8 (Exchange Procedures for

CME announced that it received regulatory approval to begin offering portfolio margining of (i) OTC interest rate swap positions, and (ii) Eurodollar and Treasury Futures. Both will be offered to customer accounts beginning November 19, 2012.