Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

CFTC To Host Roundtable on Recent CPMI-IOSCO Guidance

Posted in CFTC

The Commodity Futures Trading Commission will host a roundtable on October 6 to gather feedback in relation to a report on central counterparty resilience and recovery recently published by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO). Roundtable panelists will include US derivatives clearing organizations (DCOs), their clearing members (futures commission merchants), and the customers of DCO participants.

The CPMI-IOSCO guidance was detailed in a recent Corporate & Financial Weekly Digest article on August 19. For the location of the meeting and listening information, please see the CFTC’s press release, available here.

FCA Publishes New Notification Form for Transaction Reporting Errors

Posted in Financial Markets, UK Developments

On September 15, the UK Financial Conduct Authority (FCA) published a new form (Form) to be used when notifying the regulator of transaction reporting errors or failures in breach of Chapter 17 of the FCA’s Supervision Manual (SUP). Chapter 17 of SUP requires firms to notify the FCA of any transaction reporting errors or failures as soon as possible. Firms may (but are not required) use the Form to ensure all necessary information is provided to the FCA in compliance with this obligation.

The Form is available here.

Brexit and Passporting: FCA Statistics

Posted in Brexit/UK Developments, EU Developments, Financial Markets, UK Developments

On September 20, the UK House of Commons Treasury Committee published a letter (Letter) from Andrew Bailey, Chief Executive of the UK Financial Conduct Authority (FCA), dated August 17. The Letter contains figures on UK firms currently holding single-market “passports” under certain EU directives to provide services or establish branches elsewhere in the European Union.  Continue Reading

ESMA Publishes Discussion Paper on Mandatory Trade Execution Obligations for OTC Derivatives Under MiFIR

Posted in Derivatives, EU Developments, Financial Markets

On September 20, the European Securities and Markets Authority (ESMA) published a discussion paper (Discussion Paper) on mandatory trade execution obligations for derivatives under the Markets in Financial Instruments Regulation (MiFIR).

Articles 28 and 32 of MiFIR establish an obligation for certain over-the-counter (OTC) derivative transactions to be concluded on a regulated market, multilateral trading facility, organized trading facility or a trading venue in a third country that is declared equivalent under MiFIR (Trading Obligation). Continue Reading

European Commission Calls for Reforms Under the EU Capital Markets Union to be Accelerated

Posted in EU Developments, Financial Markets

On September 14, the European Commission (Commission) published a communication (Communication) in relation to the Commission’s Capital Markets Union (CMU) Action Plan. The Communication is addressed to the European (EU) Parliament, EU Council, EU Central Bank and the EU Economic and Social Committee and the Committee of the Regions, and calls for reforms under the CMU Action Plan to be accelerated. Continue Reading

SEC Chair Gives Speech on Equity Market Structure

Posted in Broker-Dealer

On September 14, Securities and Exchange Commission Chair Mary Jo White gave a speech titled “Equity Market Structure in 2016 and for the Future” at the annual Security Traders Association Market Structure Conference in Washington, DC. Among the highlights from the speech, Chair White stated that:

  • the proposal to amend SEC Rule 15b9-1 to require all registered dealers to join the Financial Industry Regulatory Authority (FINRA) would be finalized in the “near future” and the next step is to clarify the “dealer/trader” distinction;
  • the SEC, FINRA and the exchanges are assessing the special characteristics of exchange traded products to determine if changes are needed to limit up/limit down;
  • the staff is developing a new rule designed to enhance recordkeeping and related requirements that also addresses the confidentiality of proprietary trading information;
  • the staff will make a recommendation to the SEC concerning a potential pilot to lower caps on access fees;
  • before settling on a proposal for an anti-disruptive trading rule, the Chair has asked the staff to publish its work on disruptive trading practices for public consideration and comments; and
  • Reg SCI participants should work to (1) improve processes for making changes to systems to account for human errors; and (2) diversify electrical, telecommunications and other infrastructure support as well as the geographic location for systems.

For more details, the full text of the speech is available here.

CFTC Chairman Proposes Extension of Phase-In De Minimis Amount Termination Date

Posted in CFTC, Derivatives, Dodd-Frank Developments

Under Title VII of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd–Frank), dealers who execute a notional amount of swaps that exceeds a de minimis threshold must register with the Commodity Futures Trading Commission. That threshold is currently $8 billion as a phase-in matter, but in accordance with CFTC Regulation 1.3(ggg)(4)(ii)(A), it is scheduled to drop from $8 billion to $3 billion on December 31, 2017 unless the CFTC acts to change that outcome. The CFTC has published two reports discussing issues relating to reduction of the de minimis threshold, but neither report contains a specific recommendation as to what the de minimis amount should be. Continue Reading

NFA Proposes Amendments to CPO and CTA Quarterly Reporting Requirements

Posted in CFTC

On September 6, the National Futures Association (NFA) filed with the Commodity Futures Trading Commission for approval an amendment to NFA Compliance Rule 2-46 (CPO and CTA Quarterly Reporting Requirements) and a proposed NFA Interpretive Notice NFA Compliance Rule 2-46: Reporting Financial Information on NFA Forms PQR and PR. NFA Compliance Rule 2-46 requires member commodity pool operators (CPOs) and commodity trading advisors (CTAs)(with reporting requirements under CFTC Regulation 4.27) to file NFA Forms PQR and PR, respectively, on a quarterly basis. Such forms collect general identifying information regarding member CPOs/CTAs in addition to specific information on the pools operated by such CPOs and the assets directed by such CTAs. Continue Reading

CFTC Staff Issues No-Action Letter Relating to Yieldbroker PTY Limited’s Relief From SEF Registration Requirements

Posted in CFTC, Derivatives

On September 14, the Commodity Futures Trading Commission’s Divisions of Market Oversight and Swap and Intermediary Oversight issued Staff Letter 16-72, which announced that Yieldbroker PTY Limited (Yieldbroker), a multilateral swaps trading facility licensed and regulated in Australia, has qualified for the long-term, no-action relief provided under Staff Letter 15-29. Staff Letter 15-29 provides qualifying swaps trading platforms that are licensed and regulated in Australia with long-term, no-action relief from swap execution facility (SEF) registration requirements. (For a more complete discussion of Staff Letter 15-29, see the May 22, 2015 edition of Corporate & Financial Weekly Digest.) Yieldbroker will be the first foreign-regulated, multilateral SEF that permits direct access to US persons to qualify for SEF registration relief. Continue Reading

NFA Issues Notice Regarding Jurisdictions With AML/CFT Deficiencies

Posted in CFTC

On September 14, the National Futures Association (NFA) published Notice I-16-19, which notified member futures commission merchants (FCMs) and introducing brokers (IBs) of a September 7 advisory published by the Financial Crimes Enforcement Network (FinCEN) regarding updates to the Financial Action Task Force’s list of jurisdictions with strategic anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies. NFA reminded member FCMs and IBs to review the aforementioned advisory and revise, if necessary, their respective AML programs to comply with the new guidance.

Notice I-16-19 is available here.

The FinCEN advisory is available here.