By Douwe Miedema
WASHINGTON, Feb 21 (Reuters) - Commodities trader CargillInc has registered as a swap dealer with the U.S.derivatives regulator, a sign that new financial stability ruleshave started affecting firms well outside Wall Street.
Cargill, one of the world's largest privately held firms, is the first major non-financial company to acquire the statusof "swaps dealer" from the National Futures Association (NFA),which lists the biggest players in the $630 trillion derivativesmarket.
So far, only large Wall Street firms had lined up with theNFA after registration became mandatory at the beginning of theyear, such as JPMorgan, Bank of America andDeutsche Bank.
Cargill said it had applied to be a swap dealer becauseservices its Cargill Risk Management unit provided had broughtit within the definitions of the law.
In 2009, the world's largest economies agreed to clamp downon the unregulated swaps market, which has been blamed as amajor contributor to the global financial crisis, leading toadoption of the Dodd-Frank law in the United States.
The U.S. Commodity Futures Trading Commission (CFTC) andother regulators are setting tighter standards for trading anddata reporting, among a host of other measures. Firms dealing inswaps must also register with the NFA.
Energy traders such as Royal Dutch Shell, Valero and Chevron have so far been conspicuouslyabsent from the NFA's list, a sign of how the market isdominated by investment banks.
That Minneapolis-based Cargill is the first to registerunderscores its size: it buys, processes and distributes indozens of commodity markets, from cocoa and sugar to livestock,grains and cotton.
Swap dealers need to become members of the NFA, aself-regulatory body, and are audited on whether they complywith the CFTC's rules, aimed at making derivatives markets lesssusceptible to collapse.
Clearing houses will need to stand in between buyers andsellers to limit the risk of a counterparty defaulting, and dataon swaps dealings need to be reported to regulators and in partalso to the general public.
A small group of companies that use swaps for genuinehedging of physical assets such as commodities, or use them tohedge financial liabilities in their daily business, is exemptfrom the new rules.
But any other hitting a volume of more than $8 billion inswaps in the past 12 months needed to register as of Dec. 31,according to the CFTC's rules, with deadlines expiring at theend of each calendar month.
