United States

Topic: Commodities & Derivatives

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November 2 Norton Rose Fulbright New York briefing to focus on SEC/CFTC Enforcement Trends

Norton Rose Fulbright New York office’s next financial services briefing is a luncheon seminar set for Thursday, November 2, 2017, at 12:00-1:00 PM EDT. Each month, Norton Rose Fulbright’s senior practitioners will provide interested in-house counsel and professionals with an insightful discussion on current regulatory trends within the financial services sector. The November briefing will … Continue Reading

US federal banking regulators issue risk-based capital guidance for certain derivatives

On August 14, 2017, the US federal banking agencies (Federal Reserve Board (FRB), Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC)) issued interagency guidance on the risk-based capital treatment of certain centrally cleared derivative contracts. The guidance was issued because some central counterparties recently modified margin requirements for certain centrally … Continue Reading

CFTC registers LedgerX to trade, clear Bitcoin derivatives

The Commodity Futures Trading Commission (CFTC) recently approved two applications from LedgerX – a platform for trading and clearing Bitcoin options – to become registered as a swap execution facility (SEF) and derivatives clearing organization (DCO). These approvals make LedgerX the first DCO and the second SEF approved to facilitate digital currency-related derivatives activity (another … Continue Reading

SEC determines US securities laws apply to capital-raising via blockchain

On July 25, 2017, the US Securities and Exchange Commission (“SEC”) issued an investigative report stating that US securities laws apply to sales of securities in the United States purchased with virtual currencies or distributed with blockchain technology. At the same time, it issued an Investor Bulletin on so-called “Initial Coin Offerings” (ICOs) to caution … Continue Reading

Incriminating IMs lead to Singapore precious metals trader settling, pleading guilty to charges of spoofing, manipulation and wire fraud

A former futures trader recently agreed to a settlement order from the U.S. Commodity Futures Trading Commission (“CFTC”) imposing a permanent trading ban for spoofing and manipulation, and pled guilty to criminal charges of manipulation and wire fraud, for trading done in the precious metals market. David Liew was a trader on a major financial … Continue Reading

CFTC amends regulations to prohibit restrictions on employee communication concerning potential Commodity Exchange Act violations

On May 22, 2017, the Commodity Futures Trading Commission (“CFTC”) amended Part 165 of its regulations, which govern whistleblower incentives and protections. In addition to strengthening existing anti-retaliation protections for whistleblowers, the amendments also prohibit employers from restricting employees from reporting potential violations of the Commodity Exchange Act directly to the CFTC. This prohibition extends … Continue Reading

CFTC staff issues relief to swap dealers from CFTC’s regulations on margin requirements for uncleared swaps

The Commodity Futures Trading Commission’s (“CFTC” or “Commission”) Division of Swap Dealer and Intermediary Oversight (“DSIO”) recently issued relief to CFTC-registered swap dealers (“SDs”) from compliance with certain CFTC uncleared swaps margin requirements under two No-Action letters (“NALs”). The relief under these two NALs extends only to those SDs that are obliged to comply with … Continue Reading

OCC finalizes regulatory proposals on national bank receiverships and copper transactions

The Office of the Comptroller of the Currency (“OCC”) recently finalized two outstanding regulatory proposals. The OCC adopted a final rule addressing receiverships of national banks that lack federal deposit insurance (“uninsured national banks”). The OCC also finalized its rule on restrictions on a national bank’s transactions in industrial and commercial metals, including a ban … Continue Reading

Smart contracts and innovation are focus of next Norton Rose Fulbright New York briefing

Norton Rose Fulbright New York office’s next 40-minute financial services briefing is set for Thursday, January 5, 2017 at 12:00 noon EST. Each month, Norton Rose Fulbright’s senior practitioners will provide interested in-house counsel and professionals with an insightful discussion on current regulatory trends within the financial services sector. The briefings will stick strictly to … Continue Reading

CFTC pushes position limits to new Administration, but finalizes aggregation rules

Today, in a move on its long-pending proposals, the CFTC: (1) re-proposed its new speculative position limits rules (the “Re-Proposal”), which would impose federal limits on 25 physical commodity futures contracts and their “economically equivalent” futures, options, and swaps; and (2) separately issued final rules relating to position aggregation requirements (the “Final Aggregation Rules”). We … Continue Reading

2016 Election is focus of next Norton Rose Fulbright New York briefing

Following up on our inaugural session on November 2, the Norton Rose Fulbright New York office’s second 40-minute financial services briefing is set for this Thursday, December 1. Each month, Norton Rose Fulbright’s senior practitioners will provide interested in-house counsel and professionals with an insightful discussion on current regulatory trends within the financial services sector. … Continue Reading

FRB proposes new limits on physical commodity activities of financial holding companies

The Federal Reserve Board (FRB) recently proposed new restrictions on the ability of a financial holding company (FHC) to engage in physical commodity activities. The complex proposal includes (i) heightened capital requirements for certain physical commodity activities, (ii) changes to the maximum amount of specified physical commodities FHCs can hold, (iii) clarification of restrictions on … Continue Reading

CFTC postpones drop of swap dealer registration de minimis threshold

On October 13, 2016, the Commodity Futures Trading Commission (“CFTC’”) unanimously issued an order establishing December 31, 2018 as the swap dealer de minimis threshold phase-in termination date (the “Order”). The Order is effective October 13, 2016. Summary of the Order Pursuant to CFTC Regulation 1.3(ggg), a person shall not be deemed to be a swap … Continue Reading

CFTC proposes regulations superseding in part its 2013 cross-border guidance

On October 11, the Commodity Futures Trading Commission (“CFTC’”) issued proposed rules and interpretations (the “Proposed Rule”) addressing the cross-border application of certain swap provisions of the Commodity Exchange Act. Generally speaking, the Proposed Rule aims to: (1) codify certain aspects of the CFTC’s earlier guidance on the cross-border aspects of its swaps regulations (the … Continue Reading

CFTC Chairman Massad supports one-year extension of current swap dealer de minimis threshold

CFTC Chairman Massad today announced that he will recommend a one-year extension of the date on which the swap dealer de minimis threshold will drop from $8 billion to $3 billion.  Chairman Massad will recommend the Commission take this action through Commission order.  If adopted, the Commission order would permit market participants to calculate their … Continue Reading

SEC finalizes data rule for security-based swap data repositories

The United States Securities and Exchange Commission (SEC) recently finalized a regulation pursuant to Title VII of the Dodd-Frank Act regarding the requirement for security-based swap data repositories (SBSDRs) to make security-based swap data available to other domestic and foreign regulators. Pursuant to the final regulation, SBSDRs must make available security-based swap data, including individual … Continue Reading

CFTC Chairman Massad announces priorities for remainder of 2016

On September 8, 2016, the CFTC held an open meeting where the Commissioners: (i) unanimously approved two final rules regarding system safeguards and testing requirements for derivatives trading platforms, clearinghouses, and data repositories, and (ii) approved, over Commissioner Bowen’s dissent, a “comparability determination” for purposes of substituted compliance with Japan’s regulations regarding margin requirements for … Continue Reading

Federal financial regulators increase civil monetary penalty amounts

In interim final rulemakings (“IFRs”) issued over the summer, federal financial regulators (including the SEC, CFTC, FERC, OCC, FDIC, CFPB, and the Federal Reserve), at Congress’ direction, systematically increased the maximum civil monetary penalty amounts (“CMPs”) that can be imposed for violations of the statutes they administer and enforce.  Although these adjustments were made in … Continue Reading

CFTC staff publishes final report on de minimis threshold for swap dealer registration requirement

CFTC Staff has published a Final Report on the Swap Dealer De Minimis Exception (Final Report) addressing the level of swap dealing activity that is considered “de minimis” and therefore does not require an entity to register as a swap dealer with the CFTC.  The Final Report provides updated data analysis, and summarizes public comments … Continue Reading

FinCEN issues additional guidance on “beneficial ownership” rule

The Financial Crimes Enforcement Network (FinCEN), the U.S. agency tasked with issuing anti-money laundering (AML) regulations, recently issued Frequently Asked Questions (FAQ) providing additional guidance on the final regulations that require that banking organizations, securities broker-dealers, mutual funds, futures commission merchants and introducing brokers in commodities (covered financial institutions) identify the beneficial owners of their … Continue Reading

CFTC proposes enhanced Exchange authority over exemptions to proposed position limits

The CFTC has issued a supplemental proposed rulemaking (the “2016 Supplement”) that would give futures exchanges (“Exchanges”) greater authority over exemptions if the CFTC finalizes its long-pending proposed new speculative position limits that it published in December 2013 (the “Limits Proposal”).  In an effort to be responsive to severe criticism of the Limits Proposal, particularly … Continue Reading

Not just banks affected by proposed CFPB ban on arbitration agreements prohibiting class action suits

The Bureau of Consumer Financial Protection (the “CFPB”) has issued a Notice of Proposed Rulemaking (the “NPRM”) that, if adopted, will have two primary effects on the providers of certain consumer financial products and services that use arbitration clauses in their consumer contracts. Products and services that would be subject to the proposed rule include … Continue Reading

Federal Reserve proposes to limit termination rights for certain contracts of global systemically important banking organizations

The Federal Reserve Board (“FRB”) has issued a proposed rulemaking to require “global systemically important banking organizations” (“GSIBs”) and their subsidiaries to limit their counterparties’ rights to terminate and liquidate uncleared derivatives and other agreements under certain conditions if the GSIB or its subsidiary enters into a bankruptcy or resolution process.  The proposal is intended to … Continue Reading

FinCEN finalizes AML “beneficial ownership” identification requirements

The Financial Crimes Enforcement Network (FinCEN), the U.S. agency tasked with issuing anti-money laundering (AML) regulations, recently finalized long-pending regulations that would require that banking organizations, securities broker-dealers, mutual funds, futures commission merchants and introducing brokers in commodities (“covered financial institutions”) identify the beneficial owners of their legal entity customers. The final rule also requires … Continue Reading
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