The US financial watchdog that supervises financial derivatives has approved State Street Bank as a swap dealer. In the notification issued by the regulator, the Commodity Futures Trading Commission (CFTC or Commission), states that State Street Bank is approved as a limited-purpose swap dealer (SD) designation for FX products.
Since the new Dodd-Frank swap rules were put in place under President Obama’s administration, the CFTC has been issuing licenses to firms operating in the OTC sector. The current approval is only the second made by the CFTC which means State Street Bank will be limited to a specific number of products.
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Details issued in the Order state: “Limited-purpose designations” (also referred to as “limited designations”) involve cirumstances in which the Commission, by Order, designates a person as an SD for one type, class or category of swap or activities without the person being considered an SD for other types, classes, categories or activities. The Commission’s authority to grant limited purpose SD designations derives from Section 1a(49)(B) of the Commodity Exchange Act (CEA), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act.”
State Street Bank joins Cargill Financial Services (Cargill), a commodity trading firm as a swap dealer with limited-purpose. Cargill was approved in October 2013.