Key takeaways:

• The Commodity Exchange Act, as amended by the Dodd-Frank Act, provides for a regulatory framework for Swap Dealers and Major Swap Participants that includes registration, capital and margin requirements, information reporting, record-keeping and other business conduct standards.
• On February 17, 2012, the Federal Register published the final rules on external business conduct standards for Swap Dealers and Major Swap Participants in dealing with their counterparties.
• The final rules impose a number of duties on Swap Dealers and, to a slightly lesser extent, on Major Swap Participants, including a duty to conduct "know your counterparty" due diligence, various material information disclosure requirements (including material risks, conflicts of interest, scenario analysis and daily marks), and fair dealing requirements in communication with counterparties.
• An enhanced protection system is further mandated for transactions between Swap Dealers and Major Swap Participants with certain "Special Entities" such as ERISA plans, governmental entities, governmental plans and endowments.