United States

Topic: Commodities & Derivatives

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AML Act of 2020: Topics of interest for international banks

The National Defense Authorization Act became law on January 1, 2021, after the U.S. Congress overrode a presidential veto. Division F of the Act is the “Anti-Money Laundering Act of 2020” (AMLA). In her latest The New York Law Journal column, “ AML Act of 2020: Topics of interest for international banks,” Kathleen Scott, Senior … Continue Reading

New beneficial ownership requirements should help with AML KYC obligations

When banks and certain other financial institutions open accounts for entities, among other anti-money laundering (AML) customer identification requirements, they must obtain beneficial ownership information on individuals owning 25% or more of the entity and a person with significant control over the entity such as a president or chief executive officer. We have published several … Continue Reading

The LIBOR Transition – CFTC issues more LIBOR transition relief

On August 31, 2020, in response to requests by the Alternative Reference Rates Committee (ARRC), the US Commodities Futures Trading Commission (CFTC) issued revised no-action letters to swap dealers and other market participants relating to the transition from use of the London Interbank Offered Rate (LIBOR) as a reference rates in transactions. These letters supersede … Continue Reading

SEC and CFTC issue Settlement and Order against Abra simultaneously

In what appears to be a coordinated effort, the Securities Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) both issued orders relating to Plutus Financial—doing business as Abra—and its Philippines-centered partner, Plutus Technologies Philippine Corporation (Plutus Tech). The July 13, 2020 orders found Abra and Plutus Tech had violated sections of the Securities Act … Continue Reading

US Banking Regulators Finalize Volcker Rule Covered Funds Revision

On July 31, 2020, the Federal Register published the final Volcker Rule covered funds amendments promulgated in June by the federal financial services regulators (the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, the Office of the Comptroller of the Currency, and the Commodity Futures Trading Commission). In her latest … Continue Reading

Recent US federal court case examines SAFTs under federal securities laws

Cryptocurrency and token offerings present a regulatory paradox. The Securities and Exchange Commission contends that in various circumstances cryptocurrency and token offerings constitute “securities” that must comply with securities laws. A potential approach: “simple agreements for future tokens” or SAFTS. In a recent New York Law Journal column, Robert Schwinger, a partner in the New … Continue Reading

The LIBOR Transition – ARRC 2020 Best Practices for Completing the Transition from LIBOR

Following on our post discussing the ARRC’s publication of their 2020 Key Objectives, we mentioned that ARRC panned to release a set of recommended best practices. As promised, the ARRC has published guidance for Best Practices for Completing the Transition from LIBOR (“Best Practices Guidance”), along with an accompanying ARRC fact sheet, which sets forth … Continue Reading

US financial regulators establish webpages on the COVID-19 pandemic

The US financial regulatory, consumer protection and enforcement supervisors are regularly issuing press releases and statements concerning the COVID-19 pandemic. Each of them has established special links to provide information to the public on its response to the pandemic. Board of Governors of the Federal Reserve System: https://www.federalreserve.gov/covid-19.htm Commodity Futures Trading Commission: https://www.cftc.gov/coronavirus Conference of State … Continue Reading

The LIBOR Transition – ARRC releases recommended NY Legislation on LIBOR

Following up on our past posts on the transition away from the London Interbank Offering Rate (“LIBOR”), and other interbank offering rates (“IBOR”) denominated in other currencies, we discuss the proposal from the Alternative Reference Rates Committee (“ARRC”) for New York legislation, which was published on March 6, 2020. The ARRC is a group of … Continue Reading

“Crypto Mom” Proposes 3-Year Safe Harbor for Token Projects

In a speech to the International Blockchain Congress on February 6, 2020, Securities and Exchange (“SEC”) Commissioner Hester Peirce, sometime referred to as “Crypto Mom,” proposed a three-year safe harbor for virtual currency token projects.  The safe harbor would exempt (i) the offer and sale of tokens from the provisions of the Securities Act of … Continue Reading

The LIBOR Transition – Global and US Regulators Expectations on LIBOR Planning

Following up on our past LIBOR posts, in this update on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates (“IBOR”) denominated in other currencies, we discuss some recent issuances by global and US government regulators on the LIBOR transition. The LIBOR transition requires considerable work from all market participants … Continue Reading

The LIBOR Transition – ISDA Consultation Market Responses

Following up on our past posts, this update on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates (“IBOR”) denominated in other currencies, we discuss in this post the International Swaps and Derivatives Association (“ISDA”) Summary of Responses to the ISDA Consultation on Final Parameters for the Spread and Term … Continue Reading

The LIBOR Transition – ARRC’s LIBOR Fallback Language for Residential Mortgages

Following up on our past posts, this update on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates (“IBOR”) denominated in other currencies, concerns the Alternative Reference Rates Committee (“ARRC”), and the adoption by Freddie Mac and Fannie Mae (which are US government-sponsored enterprises in the housing finance market) of … Continue Reading

The LIBOR Transition – the Secured Overnight Financing Rate (SOFR)

Following up on our previous post, “The LIBOR Transition — What is LIBOR and why is it important?”, from earlier this week, in this update on the transition away from LIBOR (London Interbank Offering Rate) as the reference rate of choice for financial transactions, we discuss one such alternative, the Secured Overnight Financing Rate (SOFR) … Continue Reading

The LIBOR Transition — What is LIBOR and why is it important?

Since its creation by the British Bankers Association in the 1980s, the London Interbank Offering Rate (“LIBOR”) has been used as a reference rate for borrowing costs between banks. The LIBOR calculation today is coordinated by the International Continental Exchange Benchmark Administration, which receives information on a daily basis from a group of global money … Continue Reading

Three US Agencies issue joint statement on activities involving digital assets

On October 11, 2019, the Financial Crimes Enforcement Network (FinCEN), the US anti-money laundering (AML) agency, along with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) (collectively, the “Agencies”) issued a joint statement on digital assets activities (“Statement”), reminding the businesses under their jurisdictions that digital assets activities may be … Continue Reading

Recent Volcker Rule changes and non-US banks

The Volcker Rule prohibits “banking entities” (generally, insured banks and their affiliates, and non-US banks with US banking operations) from engaging in proprietary trading or sponsoring or investing in private equity funds. Regulations initially implementing the rule were adopted by the federal banking, commodities and securities regulators (Agencies) in 2014. In 2018, the Agencies proposed … Continue Reading

US Senate Confirms Heath Tarbert as New CFTC Chairman

On June 5, 2019, the U.S. Senate voted 84-9 to confirm Dr. Heath P. Tarbert as the new Chairman of the Commodity Futures Trading Commission (“CFTC”). Dr. Tarbert currently serves as the Acting Under Secretary for International Affairs for the U.S. Treasury Department. His previous government experience includes roles as Special Counsel to the Senate … Continue Reading

CFTC Division of Enforcement Publishes Enforcement Manual

On May 8, 2019, the Division of Enforcement (“Division”) of the Commodity Futures Trading Commission (”CFTC”) announced that it had published its Enforcement Manual (“Manual”). This is the first issuance of a public Manual. Prior to this publication, the Manual was only available internally as a general reference to the Division’s Staff during their investigation … Continue Reading

In anticipation of Brexit, US regulators address status of certain swaps under the Swaps Margin Rule

With the next 10 days being crucial in the Brexit process, following the UK House of Commons rejecting the draft withdrawal agreement for a third time and the European Council calling an emergency summit for April 10, 2019, the Commodity Futures Trading Commission (“CFTC”) and the US banking, farm credit and housing agencies have issued … Continue Reading

CFTC divisions issue their 2019 examination priorities

For the first time, the US Commodity Futures Trading Commission’s (“CFTC”) Division of Market Oversight (“DMO”), Division of Swap Dealer and Intermediary Oversight, and Division of Clearing and Risk published Examination Priorities for the year. While the CFTC has historically published its Rules Enforcement Review of specific commodity exchanges with notes as to areas for … Continue Reading

Mandatory stay provisions in qualified financial contracts

Companies are being, or have been, approached by US banks and/or their affiliates with which they have derivatives contracts or other qualified financial contracts (QFCs) and asked to amend those agreements to cover a situation where the bank or its affiliates might be put into a receivership situation. The reason why they are getting these … Continue Reading

Impact of partial US government shutdown on federal financial regulatory agencies

As a result of the United States Congress not adopting an appropriations bill or a continuing resolution to fund specific government departments, agencies or functions, certain federal agencies are currently subject to a partial government shutdown. Below is an overview of how the partial federal government shutdown is affecting financial or other major regulatory agencies: … Continue Reading

CFTC seeks public comment on crypto-asset mechanics and markets

The Commodity Futures Trading Commission (“CFTC”) published a Request for input on December 17, 2018, seeking public comment and feedback on a set of twenty-five (25) questions to better inform the CFTC’s understanding of the technology, mechanics, and markets for virtual currencies beyond Bitcoin. … Continue Reading
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