News Article In an article describing the long hours regulators at the SEC and CFTC are putting in to implement Dodd-Frank, the chief operating officer at the Options Clearing Corporation is quoted as saying: "The regulatory structure in the US has some significant uncertainty to it right now." One hot-botton issue currently being debated is how pension funds and asset managers will be required to handle margin collateral, which is posted to a clearing house, of a central counterparty, to protect against a default, which pits large asset managers who want such funds "segregated" in individual

News Article Proposals to force pension funds to clear OTC derivatives centrally could increase risk levels for pension funds due to increased costs from complying with margin requirements, forcing such funds to engage in riskier investment strategies to make up the difference. The article quotes Tom Kirby, director, regulatory and risk management at Ernst Young as saying: "In a worst case scenario, a whole range of costs will increase, and the increases will be worse if there is initial and variation margin segregation on top. These will all be passed on to the buy-side as fees." Publication

CFTC Announcements The Technology Advisory Committee will hold a public meeting on January 27, 2011, from 1 p.m. to 5 p.m., at the CFTC's Washington, DC headquarters. Matters to be addressed at the meeting are: Recommendations from the Pre-trade Functionality Subcommittee. Consideration of Technology Challenges for Implementation of Architectures for Trade Processing and Records Management. Document Number 76 Fed. Reg. 776 Date January 6, 2011

CFTC Dodd-Frank Rulemaking The CFTC proposes certain substantive requirements on the resolution of conflicts of interest, in order to further implement core principles applicable to derivatives clearing organizations, designated contract markets, and swap execution facilities. Such substantive requirements address reporting, transparency in decision making, and limitations on use or disclosure of non-public information, among other things. For DCOs and DCMs, the Commission also proposes regulations to implement core principles concerning governance fitness standards and the composition of

SEC: Rule 15c3-5 (Risk Management Controls for Brokers or Dealers with Market Access) The SEC published on its web site a guide for small firms to comply with recently-adopted Rule 15c3-5 under the Exchange Act. The rule requires firms to have risk controls in connection with their market access. The guide provides a concise summary of the rule from the SEC staff. Please contact any of the following Cadwalader attorneys if you have any questions about this item: Steven Lofchie; steven.lofchie@cwt.com Glen Barrentine; glen.barrentine@cwt.com Date January 6, 2011 Cross References (links may