§ 23.410. Prohibition on fraud, manipulation, and other abusive practices.
380 words·~2 min read·
/us/cfr/t17/s§ 23.410·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Prohibition. It shall be unlawful for a swap entity---
(1)To employ any device, scheme, or artifice to defraud any Special Entity or prospective customer who is a Special Entity;
(2)To engage in any transaction, practice, or course of business that operates as a fraud or deceit on any Special Entity or prospective customer who is a Special Entity; or
(3)To engage in any act, practice, or course of business that is fraudulent, deceptive, or manipulative.
(b)Affirmative defense. It shall be an affirmative defense to an alleged violation of paragraph (a)(2) or
(3)of this section for failure to comply with any requirement in this subpart if a swap entity establishes that the swap entity:
(1)Did not act intentionally or recklessly in connection with such alleged violation; and
(2)Complied in good faith with written policies and procedures reasonably designed to meet the particular requirement that is the basis for the alleged violation.
(c)Confidential treatment of counterparty information.
(1)It shall be unlawful for any swap entity to:
(i)Disclose to any other person any material confidential information provided by or on behalf of a counterparty to the swap entity; or
(ii)Use for its own purposes in any way that would tend to be materially adverse to the interests of a counterparty, any material confidential information provided by or on behalf of a counterparty to the swap entity.
(2)Notwithstanding paragraph (c)(1) of this section, a swap entity may disclose or use material confidential information provided by or on behalf of a counterparty to the swap entity if such disclosure or use is authorized in writing by the counterparty, or is necessary:
(i)For the effective execution of any swap for or with the counterparty;
(ii)To hedge or mitigate any exposure created by such swap; or
(iii)To comply with a request of the Commission, Department of Justice, any self-regulatory organization designated by the Commission, or an applicable prudential regulator, or is otherwise required by law.
(3)Each swap entity shall implement written policies and procedures reasonably designed to protect material confidential information provided by or on behalf of a counterparty from disclosure and use in violation of this section by any person acting for or on behalf of the swap entity.
Connections5 cite this
Citation graph
cites case law
§ 23.410
Prohibition on fraud, manipulation, and other abusive practices.
Fed. Reg.×5
Cites 0Cited by 5 across 1 source