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
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
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 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
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
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
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
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
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
On May 10, 2016, the U.S. Commodity Futures Trading Commission (“CFTC”) issued a notice of proposed amendment to its 2013 order exempting specified electric energy transactions in certain Regional Transmission Organizations (“RTOs”), Independent System Operators (“ISOs”) and the Electric Reliability Council of Texas (“ERCOT”) from regulation under certain provisions of the Commodity Exchange Act (“CEA”) … Continue Reading
The CFTC recently issued Final Rules eliminating the requirement that commercial end-users of derivatives file an annual Form TO for reporting certain information about their use of commodity trade options. The agency confirmed that, in light of the Final Rules, the Form TO that was due by April 1, 2016, with respect to trade option … Continue Reading
ICE Futures US (“ICE”) adopted a new rule, effective March 18, 2016, that provides relief from position limit aggregation requirements applicable to “owned entities.” Specifically, the rule amendment permits certain affiliated entities to disaggregate their positions for purposes of compliance with ICE’s position limits. Background ICE imposes spot-month position limits on all its futures contracts, … Continue Reading
Market participants must be mindful of the robust enforcement environment at the CFTC and U.S. futures exchanges. In 2015, the CFTC brought numerous enforcement actions and continued to impose aggressive civil monetary penalties on market participants, including energy and agricultural companies. Significantly, the CFTC also started to pivot from implementing to enforcing its regulations promulgated … Continue Reading
The Commodity Futures Trading Commission (“CFTC”) has announced its adoption of final regulations to implement the sections of the Dodd-Frank Act that impose margin requirements for swaps involving certain registered swap dealers (“covered swap entities” or “CSEs”) that have not been cleared by a derivatives clearing organization (“uncleared swaps”). These regulations are very similar to … Continue Reading
The CFTC has proposed a set of rules, referred to collectively as proposed Regulation AT, that would, for the first time, impose risk control and other requirements governing algorithmic trading systems (ATSs) in futures contracts, options, and swaps traded on designated contract markets (DCMs) such as CME, CBOT, NYMEX, and ICE Futures US. Regulation AT … Continue Reading
CFTC staff has published for public comment a Preliminary Report regarding 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. Comments must be filed on or before January 19, 2016. The de minimis threshold CFTC rules adopted … Continue Reading
On October 30, 2015, the US banking agencies (the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of Comptroller of the Currency), along with the Federal Housing Finance Agency and the Farm Credit Administration (the “Agencies”), announced that each Agency had finalized regulations to implement the sections of the Dodd-Frank Act that … Continue Reading
On September 24, 2015 the CFTC issued an Order settling an enforcement action against TeraExchange, a provisionally registered swap execution facility (SEF). According to the Order, TeraExchange failed to enforce its rules prohibiting wash trading and pre-arranged trading. In fact, the Order found, TeraExchange affirmatively arranged for two market participants to enter into the SEF’s … Continue Reading
On September 22, 2015, the CFTC issued a “supplemental” proposed rulemaking (the “2015 Proposal”) to revise its long-pending proposal on aggregation for position limit purposes published in November 2013 (the “2013 Proposal”). The 2015 Proposal, if finalized, would provide companies with over 50% ownership or equity interest in affiliated entities with an easier mechanism to … Continue Reading
On September 17, 2015, the CFTC issued a cease and desist order (“Order”) against Coinflip, Inc. (“Coinflip”) and its CEO for operating a Bitcoin options trading platform in violation of the Commodity Exchange Act (“CEA”) and CFTC rules. In doing so, the CFTC for the first time held that Bitcoin and other virtual currencies are … Continue Reading
Almost two years ago, in November 2013, CFTC staff issued a cryptic 2-page Advisory stating that swaps between a non-US swap dealer and a non-US person, even if they are booked outside the United States, are subject to certain “Transaction-Level Requirements” adopted by the CFTC in implementing the Dodd-Frank derivatives reforms, if the non-US swap … Continue Reading
The Commodity Futures Trading Commission (“CFTC” or “Commission”) today proposed amendments to its rules relating to swap data reporting in connection with cleared swaps (the “Proposal”). Comments on the proposal must be submitted to the CFTC 60 days after the Proposal is published in the Federal Register. As of the date of this post, such … Continue Reading
On August 18, 2015 the Commodity Futures Trading Commission (“CFTC’”) issued an order of exemption from registration as a derivatives clearing organization (“DCO”) to ASX Clear (Futures) Pty Limited (“ASX Clear”) of Sydney, Australia. This is the first exemption of this nature. It is based on the CFTC’s authority under section 5b(h) of the Commodity … Continue Reading
On August 4, 2015, the US Treasury Department Office of Comptroller of the Currency (“OCC”) issued a supervisory bulletin regarding when a national bank’s taking or making delivery of physical commodities as part of hedging commodity derivative transactions would be considered to be a “nominal” percentage of its risk management activities. The OCC’s position is … Continue Reading
