Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

CBOE Proposes to Offer Extended Trading Hours for SPX and VIX Options

Posted in Broker-Dealer

The Chicago Board Options Exchange (CBOE) has proposed to offer Extended Trading Hours (ETH) on certain index options contracts.

Starting on March 2, CBOE intends to commence ETH session trading in options on the CBOE Volatility Index (VIX). On March 9, CBOE intends to commence ETH session trading in the end-of-month series of S&P 500 Index options as well as S&P 500 Index Weeklys Options. The CBOE’s proposed ETH are 2:00–8:15 a.m., Monday through Friday.

In 2010, CBOE Futures Exchange commenced trading in VIX futures during limited ETH. In 2014, ETH for VIX futures expanded to nearly 24 hours per day during the business week.

Click here for the corresponding CBOE Fact Sheet.

CFTC Staff to Host Public Roundtable on Recovery and Orderly Wind-Down of DCOs

Posted in CFTC

Commodity Futures Trading Commission staff will host a public roundtable discussion on March 5 on issues related to the recovery and orderly wind-down of derivatives clearing organizations. The roundtable is intended to address haircutting of variation margin gains; the use of auctions, forced allocations and tear-ups to re-establish a matched book after a clearing member default; wind-down; and liquidity risk management.

More information is available here.


CFTC Reopens Comment Period for Position Limits Proposals

Posted in CFTC

The Commodity Futures Trading Commission has re-opened the comment period on (1) its proposed rules establishing position limits on certain exempt and agricultural commodities and (2) its proposed amendments to its aggregation policies with regard to such position limits. The CFTC anticipates that the extended comment period will address questions and comments from the February 26 meeting of the CFTC’s Energy and Environmental Markets Advisory Committee. In addition to reopening the comment period, the CFTC updated the numbers of unique persons exceeding the proposed position limit levels to reflect data for the two-year period ending December 31, 2014.

The new comment period extends through March 28. The CFTC’s announcement of its re-opening of the comment period is available here; the notice published in the Federal Register is available here.


Delaware Court Grants Petition to Dissolve Joint Ventures

Posted in Litigation

Earlier this month, the Delaware Chancery Court offered further guidance on 8 Del. C. § 273, which establishes a mechanism for the dissolution of a joint venture corporation with two 50 percent stockholders. The Chancery Court found that the purpose of Section 273 is to afford relief where the corporation’s two equal shareholders are deadlocked and cannot agree upon whether the joint venture should be continued and/or how the corporation’s assets should be liquidated. The Chancery Court’s discretion to deny a dissolution petition is limited and should be sparingly exercised only upon a showing of bad faith. Continue Reading

Georgia Complaint Challenges Constitutionality of SEC Administrative Proceedings

Posted in Litigation

A complaint filed in the Northern District of Georgia on February 19 alleges that the Securities and Exchange Commission brings claims in administrative courts that are unconstitutional. The plaintiffs in the case, Gray Financial Group Inc. and its founder and co-CEO, claim that SEC administrative proceedings violate Article II of the United States Constitution because its judges are separated from presidential supervision and removal by more than one layer of “tenure” protection. Continue Reading

ESMA and JFSA Conclude a Memorandum of Understanding Regarding CCPs

Posted in EU Developments

On January 24, the European Securities and Markets Authority (ESMA) and the Financial Services Agency of Japan (JFSA) finalized a Memorandum of Cooperation (MOC) regarding central counterparties (CCPs). Under Article 25(2)(c) of the European Market Infrastructure Regulation (EMIR), the establishment of an MOC is a precondition for ESMA to recognize CCPs established in Japan that have applied for recognition under EMIR to provide clearing services to clearing members or trading venues established in the European Union. The European Commission previously made a determination, pursuant to Article 25(6) of EMIR, that the legal and supervisory arrangements of Japan for CCPs are equivalent to the requirements for CCPs under EMIR. The MOC is effective as of February 18.

In its statement regarding the MOC, ESMA noted that it was working closely with other third-country regulators on similar cooperation arrangements.

The MOC can be found here.


CFTC’s Energy and Environmental Markets Advisory Committee To Hold Meeting

Posted in CFTC

The Commodity Futures Trading Commission’s Energy and Environmental Markets Advisory Committee will hold a meeting on February 26. The meeting, which will focus on the expected impact of the CFTC’s proposed position limit rules on energy and environmental markets, will be open to the public.

More information, including webcast and dial-in information, is available here.


CFTC Announces Members of Market Risk Advisory Committee

Posted in CFTC

The Commodity Futures Trading Commission has announced the members of its Market Risk Advisory Committee (MRAC). The MRAC’s membership list is available here.

As provided in its charter, the MRAC’s purpose is to conduct public meetings and submit reports on systemic issues that threaten the stability of the derivatives markets and other financial markets, and to otherwise assist the CFTC in identifying and understanding the impact and implications of an evolving market structure and movement of risk. The MRAC’s charter is available here.

More information is available here.


NFA Notifies SDs and MSPs of Annual Questionnaire Requirements

Posted in CFTC

Beginning April 1, National Futures Association (NFA) will require its member swap dealers (SDs) and major swap participants (MSPs) to complete the SD-MSP Annual Questionnaire as part of its annual membership renewal process. The SD-MSP Questionnaire can be accessed by logging into NFA’s Annual Questionnaire system.

As part of this year’s SD-MSP Questionnaire, each SD and MSP also must include the contact information for five key employees with knowledge of the firm’s business continuity and disaster recovery plan. Each SD and MSP also must include its chief risk officer as one of the key employees. This information must be submitted through the WinJammer system.

NFA’s Notice I-15-10 is available here.


CFOs Ordered to Return Bonus and Profits Due to False Financial Statements

Posted in Litigation

The Securities and Exchange Commission recently ordered two former CFOs of Saba Software, Inc. to reimburse the company for stock-sale profits and bonuses accrued during the 12-month periods following its materially false and misleading financial statements. Saba, a Silicon Valley-based software company, misstated revenues in SEC filings from October 2007 to January 2012. Continue Reading