01
Obligation Mapping & Gap Analysis
Traced the internal business conduct rules to the rates, credit and FX derivatives businesses, assessing each desk, process and platform against the rule text and sequencing the remediation.
Case study
Dodd-Frank internal business conduct delivered for a UK global investment bank
A UK Global Tier 1 Investment Bank · Dodd-Frank Title VII
- Industry
- Capital Markets · Regulatory Transformation
- Region
- United Kingdom · United States
- Duration
- Multi-year regulatory programme
At a glance
We delivered the CFTC's internal business conduct rules for the bank's registered swap dealer — risk management programme, supervision, daily trading records, swap documentation and CCO governance — across the rates, credit and FX derivatives businesses.
- CFTC Part 23
- Internal business conduct delivered
- 3
- Derivatives businesses covered
The engagement
Overview
Registration as a swap dealer under Dodd-Frank Title VII brought a UK-headquartered global Tier 1 investment bank into the CFTC's internal business conduct regime: duties covering risk management, diligent supervision, recordkeeping and daily trading records, conflicts of interest and swap documentation. Capmark was engaged to translate the rules into delivered change across the swap dealing businesses.
The challenge
What we were asked to solve.
The internal business conduct rules reached into how the dealer actually ran: a formal risk management programme with quarterly risk exposure reporting, diligent supervision of swap activity, monitoring of trading against position limits, daily trading records complete from pre-execution through to settlement including voice and electronic communications, and swap trading relationship documentation with portfolio reconciliation and compression. The obligations spanned desks, systems and regions, and the CFTC expected each one demonstrable on request.
Our approach
How we delivered.
We mapped each CFTC obligation to the desks, processes and systems it touched, then delivered the change workstream by workstream across the swap dealing businesses.
02
Risk Management Programme
Stood up the risk management programme the rules require: documented risk policies and limits, a risk unit independent of the trading desks, new-product approval, and quarterly risk exposure reports to senior management and the CFTC.
03
Supervision & Position Monitoring
Implemented the diligent supervision framework: trader mandates, supervisory procedures and intraday monitoring of trading against established limits, including position-limit monitoring.
04
Daily Trading Records & Recordkeeping
Delivered daily trading record capture across the trade lifecycle, from pre-execution communications through execution to settlement, including voice and electronic records, retrievable and time-sequenced for the regulator.
05
Swap Documentation & CCO Governance
Implemented swap trading relationship documentation, portfolio reconciliation and compression processes with counterparties, and the conflicts-of-interest controls and reporting that support the chief compliance officer's annual report.
The outcome
The measurable impact.
The swap dealer's internal business conduct obligations were delivered into the businesses: the risk management programme operating with quarterly risk exposure reporting, supervision and monitoring live on the desks, daily trading records demonstrable end to end, and swap documentation and chief compliance officer governance in place with counterparties and the CFTC.
- CFTC Part 23
- Internal business conduct delivered
- 3
- Derivatives businesses covered
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