FACTBOX:CFTC package of OTC market, dealer reforms

WASHINGTON (Reuters) - Dealers in over-the-counter derivatives and the OTC derivatives market would be subject to U.S. regulations under a package unveiled by the chairman of the Commodity Futures Trading Commission.

The package proposes one set of rules for dealers while another set would govern the markets. "Many of these (reforms) will require statutory change, of course," CFTC chairman Gary Gensler said in presenting the package to senators on June 4.

Here is a summary of the package:

Regulating derivatives dealers

--All dealers would be covered, regardless of type of firm, method of trading or the derivative or swap involved.

--Congress would require regulators to promulgate "prudent and conservative capital requirements and initial margining requirements."

--Business conduct standards would include prohibitions on fraud, manipulation and other abuses, as well as adherence to position limits set by CFTC.

--Recordkeeping and reporting would be required for all OTC derivatives positions and transactions. Requirements would include retaining a complete audit trail and mandatory reporting to a regulated trade repository of any trades that are not centrally cleared.

--Aggregate information on positions and trades would be available to the public.