Help us improve our website by completing a quick survey. Start survey now

Upgrade your browser for the best CommBank website experiences. Click here.


Dodd-Frank information


What is Dodd-Frank?

Dodd-Frank is the term commonly used to refer to U.S. legislation officially named the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Dodd-Frank seeks to regulate the conduct of derivative markets. It also outlines the rules concerning:

  • how swaps are marketed, documented, executed and settled;
  • what information about swaps must be recorded and reported to U.S. regulators; and
  • how major market participants organise their business activities.


You can read more about Dodd-Frank in our Dodd-Frank guide or on the Commodity Futures Trading Commission (CFTC) website.

Who is captured under the Dodd-Frank Act?

Dodd-Frank contains some rules that apply to swap dealers and market makers, and other rules that apply to their counterparties and/or end users.

The rules apply to swaps entered into with U.S. persons, and to non–U.S. persons who conduct a material number of swaps with U.S. persons.

The current definition of a U.S. person under the Act includes:

  • any natural person who is a resident of the U.S.;
  • any corporation, partnership, limited liability company business or other trust, association, joint-stock company, fund or any form of enterprise similar to any of the foregoing, in each case that is either (A) organised or incorporated under U.S. law or has its principal place of business in the U.S., or (B) in which the direct or indirect owners are responsible for the liabilities of such entity, where at least one of these owners is a U.S. person;
  • any individual account (discretionary or not) where the beneficial owner is a U.S. person;
  • any commodity pool, pooled account, or collective investment vehicle (whether or not it is organised or incorporated in the U.S.) where majority ownership is held, directly or indirectly, by a U.S. person;
  • a pension plan for the benefit of employees, officers, or principals of a legal entity with its principal place of business in the U.S.; or
  • an estate or trust, the income of which is subject to U.S. income tax regardless of source.

Please refer to the Dodd-Frank Act website for the complete set of definitions, and ask your own advisers for guidance on how you or your firm will be affected.

What products are covered under Dodd-Frank?

Dodd-Frank uses the term ‘swap’ to cover a broad range of derivative products. The following products are subject to Dodd-Frank rules, though the exact rules vary on a case-by-case basis.

  • Rates – caps, cross-currency swaps, exotic, options, interest rate swaps, floors, forward rate agreements and swaptions;
  • Credit – indexes, index tranche, total return swaps, exotic;
  • Foreign exchange – forwards, non-deliverable forwards, non-deliverable options, options and swaps;
  • Equities – contracts for difference, forwards, options, portfolio swaps and swaps
  • Commodities – agriculture, energy, environmental, freight, indexes and metals.

Commonwealth Bank’s approach

As a Bank that provides a wide range of over-the-counter (OTC) derivatives products to U.S. counterparties, CBA has registered with the U.S. regulator as a non-U.S. Swap Dealer.

CBA’s status as a non-U.S. Swap Dealer will trigger a number of obligations. CBA will be required to:

  • ensure that our counterparties are aware of certain matters;
  • collect certain information from our U.S. counterparties;
  • provide certain information to U.S. counterparties; and
  • modify the terms upon which we do business with our counterparties.

Like most swap market participants, CBA intends to address the above requirements by:

  • adhering to the latest ISDA DF Protocol
  • exchanging information with our counterparties using the MarkitSERV online documentation portal. If you are not familiar with the MarkitSERV portal and how it will work, please contact us on

What our counterparties need to do

If you are a U.S. counterparty of CBA entering into swap transactions after 30 April 2013, you will need to execute additional documentation included in the Protocol. Even if you have not already executed an ISDA Master Agreement you can still adhere to the Protocol, which facilitates compliance by allowing market participants to (i) supplement the terms of existing master agreements under which the parties may execute swaps, or (ii) enter into an agreement to apply selected Dodd-Frank compliance provisions to their trading relationship in respect of swaps.

Executing the Protocol is a three-step process that you can complete online. You will need to:

  1. Submit an adherence letter. This is an acknowledgement that you agree to adhere to the latest ISDA DF Protocol. This letter is a legal document and should be given appropriate consideration before making a commitment. If necessary, consult your legal adviser. Your adherence letter will be visible to all visitors to the ISDA website.
  2. Complete the Protocol questionnaire. The questionnaire covers all the information you need to provide, including identity, address and Dodd-Frank classification (e.g. Swap Dealer, Special Entity, Financial Entity, Exempt End User).
  3. Use MarkitSERV to exchange information.Once you have entered the adherence letter and questionnaire into MarkitSERV, you can use the portal to exchange with CBA the information both parties need to fulfil our respective Dodd-Frank obligations.

To execute documents or for further information on the ISDA DF Protocol, visit the International Swaps and Derivatives Association website and click on the open protocols section.

The cost for executing the Protocol is US$500.

For those acting under a third-party relationship (e.g Custodians), your authorised third-party agent may execute this documentation on your behalf.

In addition to the requirements outlined above, Dodd-Frank requires all counterparties to a swap to obtain a Unique Legal Entity Identifier (ULEI). This ULEI is also known as the CTFC’s Interim Compliant Identifier (CICI) and will be referred to CICI in the remainder of this site. A CICI is an internationally recognised number that identifies you as a counterparty to your swap trades. CBA is obliged to use this number on the trade reports we provide to the U.S. regulator as part of our compliance with Dodd-Frank. You can get your CICI from the Commodity Futures Trading Commission website. You will need to have a CICI to complete your Protocol questionnaire.

It is important to follow the steps above to ensure uninterrupted trading relationships between yourself, as a U.S. person, and CBA from 30 April 2013. As this is new legislation the Dodd-Frank Act will continue to evolve, we will aim to keep you updated as this happens

We strongly recommend that all parties obtain their own specialist advice (specific to their own particular circumstances) on how they will be affected by the Dodd-Frank Act.

Mandatory Clearing of Swaps

One of the key reasons for Dodd-Frank is the introduction of clearing of all standardised eligible OTC derivatives through a centralised counterparty (or Clearing House) in order to mitigate counterparty risk.

Clearing is a process by which a third party, the Clearing House, steps in between the original counterparties (you and us) and guarantees the performance of the transaction, by requiring that we both post substantial amounts of liquid collateral.

For instance, you will agree the terms of a swap with us, and then we will both notify the clearer (or your Clearing Broker) of the terms of the trade. We will both face the Clearing House as their Legal counterparty.

The main exception to mandatory clearing is where our counterparty elects to utilize the End User Exemption. The End User Exemption can be elected by non-financial entities that are hedging or mitigating a commercial risk. In such a case the client faces Commonwealth Bank on a bilateral basis.

The most commonly used clearing houses are the LCH (London Clearing House) and CME Group (Chicago Mercantile Exchange). All counterparties intending to clear trades over a Clearing House must set up an account with a Clearing House and/or Clearing Broker, and execute the appropriate documentation before trading. Please contact your Clearing Broker or the Clearing House for the account set up process. The Counterparty has the right to nominate to the Swap Dealer which Clearing House should be used for each trade.

For cleared trades, the Clearing House will charge each party an Initial Margin, and then a Maintenance Margin where necessary. Depending on the Exchange, netting across Swaps and even across Futures positions may be recognized for margin calculations. For trades on a bilateral basis, at the moment the parties are free to agree their own margining regime, but Dodd-Frank rules will likely evolve that prescribe the margining regime for bilateral trades.

Mandatory Clearing will be phased in from 11 March 2013 with the first phase being mandatory clearing of a specific set of Credit and Rates products for Swap Dealers, Major Swap Participants and active funds.

Contact us

If you have any questions, please contact your CBA Relationship Executive or send us an email at


Dodd-Frank Disclosures


Related information


  • Important information 
    The contents of this webpage were prepared exclusively for the benefit and use of the Commonwealth Bank’s counterparties to whom it was directly addressed and delivered. It contains only factual information. It has been prepared for discussion and information purposes only. You should note that many aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) relating to dealing in swaps are not finalised and may be subject to change without notice to you. You should not treat the information on this website as advice or explanation of all relevant issues in connection with your consideration of the ISDA August 2012 DF Protocol or the Dodd-Frank Act. You should consult with your legal advisers and such other advisers as you deem necessary or appropriate. The Commonwealth Bank is not providing any legal or other advice to you. Commonwealth Bank is not acting as an advisor or fiduciary in any respect in connection with providing this information. The Bank or any of its subsidiaries or affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with Bank of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.