Background

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) was enacted. Title VII of Dodd-Frank amends the Commodity Exchange Act (CEA) and other federal securities laws to provide a comprehensive new regulatory framework for the treatment of derivatives, which are generally defined as "swaps" under Section 721. Dodd-Frank provides for the following, among other things:

-- The registration and regulation of swaps dealers and major swap participants

-- The implementation of clearing and trade execution requirements for swaps

-- The establishment of recordkeeping and reporting requirements for swaps

The definition of swaps under the Dodd-Frank Act is quite broad and includes a wide variety of foreign exchange (FX) derivatives, such as FX swaps, FX forwards, currency swaps, currency options, and non-deliverable forward contracts (NDFs).