Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Tag Archives: swap dealers

Three Developments Concerning EU-US Cross-Border Swaps

Posted in CFTC, Derivatives, Dodd-Frank Developments, EU Developments
On October 13, the Commodity Futures Trading Commission and the European Commission (EC) made three announcements that are significant for cross-border swap activity between the United States and Europe. CFTC Margin Rule Comparability Determination. The CFTC has made a determination that the margin rules for uncleared swaps that apply in the European Union are comparable to… Continue Reading

CFTC Provides No-Action Relief From CPO and CTA Registration to a Private University

Posted in CFTC
On September 13, the Division of Swap Dealer and Intermediary Oversight (DSIO or Division) of the Commodity Futures Trading Commission (CFTC or Commission) granted no-action relief from commodity pool operator (CPO) and commodity trading advisor (CTA) registration to a private university, subject to certain conditions. At issue was (1) the university’s collective management of an… Continue Reading

CFTC Provides No-Action Relief From Commission Regulation 4.7(b)(2) Reporting Requirements

Posted in CFTC
The Division of Swap Dealer and Intermediary Oversight (DSIO or Division) of the Commodity Futures Trading Commission (Commission or CFTC) recently granted no-action relief from the reporting requirements of CFTC Rule 4.7(b)(2) to a commodity pool operator (CPO) of two commodity pools, subject to certain conditions. CFTC Rule 4.7(b)(2) places a reporting requirement on a… Continue Reading

CFTC Grants DCO Registration to LedgerX

Posted in CFTC, Derivatives
The Commodity Futures Trading Commission has issued an order granting LedgerX LLC registration as a derivatives clearing organization (DCO). As specified in the order, LedgerX is permitted to clear fully collateralized digital currency swaps. A transaction will be fully collateralized if LedgerX holds, at all times, funds in the form of the required payment sufficient… Continue Reading

CFTC Extends Relief From Transaction-Level Requirements for Non-US Swap Dealers

Posted in CFTC, Derivatives
The Division of Swap Dealer and Intermediary Oversight, the Division of Clearing and Risk and the Division of Market Oversight (collectively, the Divisions) of the Commodity Futures Trading Commission have extended relief previously provided in a series of previous no-action letters relating to transaction-level requirements for non-US swap dealers (non-US SDs). Specifically, the Divisions have… Continue Reading

NFA Adopts Interpretive Notice on Swap Valuation Disputes

Posted in CFTC, Derivatives
National Futures Association (NFA) has adopted an interpretive notice that standardizes the process for filing swap valuation disputes with NFA. As set forth in the interpretive notice, swap dealers (SDs) generally are required to file with NFA notices of unresolved swap valuation disputes involving initial margin, variation margin and/or transaction or portfolio valuations if the… Continue Reading

NFA Adopts 4s Attestation Process for Swap Dealers and Major Swap Participants

Posted in CFTC, Derivatives
National Futures Association (NFA) has revised the process by which each swap dealer (SD) and major swap participant (MSP) applicant demonstrates its ability to comply with Commodity Futures Trading Commission regulations implementing Section 4s of the Commodity Exchange Act (4s Regulations), including but not limited to regulations relating to capital and margin requirements, reporting and… Continue Reading

CFTC Announces Review of Swaps Reporting Regulations

Posted in CFTC
On July 10, the Commodity Futures Trading Commission’s Division of Market Oversight (Division) issued Staff Letter 17-33 (Staff Letter), which announced the launch of a comprehensive review of swap data reporting requirements. The review will focus on existing regulations with the goal of (1) ensuring the CFTC receives accurate, complete and high-quality data regarding swap… Continue Reading

CFTC Extends No-Action Relief to SEFs and DCMs From Certain Error Correction Regulations

Posted in CFTC
On May 30, the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight and Division of Clearing and Risk (Divisions) issued Staff Letter 17-27, extending previously granted no-action relief to swap execution facilities (SEFs) and designated contract markets (DCMs) from restrictions on using pre-arranged trades to correct clerical or operational errors that (1) caused a… Continue Reading

NFA Issues Notice Regarding Monthly Risk Data Reporting Requirements for Swap Dealers

Posted in CFTC
On May 30, the National Futures Association (NFA) issued Interpretive Notice I-17-1 (Notice), which sets forth the specific list of risk metrics that swap dealers (SDs) will be required to electronically report to NFA on a monthly basis, beginning with the initial January 31, 2018, reporting deadline. NFA intends to use this information to assess… Continue Reading

CFTC Proposes Amendments to Certain Rules Governing CCO Duties and Annual Reports

Posted in CFTC
On May 3, the Commodity Futures Trading Commission announced proposed rules amending its regulations regarding certain duties of chief compliance officers (CCOs) of swap dealers (SDs), major swap participants (MSPs) and futures commission merchants (FCMs; each, a Registrant). In addition, the proposed rules amend certain requirements for preparing and furnishing CCO annual reports on a… Continue Reading

CFTC Extends Previously Granted No-Action Relief for Swap Dealers Complying With EU Requirements

Posted in CFTC, Derivatives
On April 18, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) issued No-Action Letter 17-22, which extends relief previously granted under CFTC No-Action Letter 17-05. CFTC No-Action Letter 17-05 allowed certain swap dealers to substitute compliance with the non-centrally cleared OTC derivative margin requirements applicable in the European Union (the… Continue Reading

CFTC Releases No-Action Letter Regarding the Transfer of Customer-Owned Securities by FCMs to Foreign Brokers

Posted in CFTC
On April 11, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediate Oversight (DSIO) made publicly available No-Action Letter No. 16-88. This letter grants no-action relief to a futures commission merchant (FCM) intending to deposit customer-owned securities in an individual client account (ISA) with a United Kingdom affiliate (Affiliate) for purposes of margining… Continue Reading

CFTC Extends Public Comment Period for Swap Dealers and Major Swap Participants Minimum Capital Requirement Proposal

Posted in CFTC, Derivatives
On March 16, the Commodity Futures Trading Commission published in the Federal Register its decision to extend the public comment period for the proposed rules related to minimum capital requirements for swap dealers and major swap participants (Proposal). (For a more complete discussion of the Proposal, see the December 9, 2016 edition of Corporate &… Continue Reading

EU and Prudential Regulators Issue Statements on March 1 Compliance With Swap Margin Rules

Posted in Banking, Derivatives, Dodd-Frank Developments
Lacking the ability to issue formal no-action relief from strict compliance with the variation margin rules for uncleared swaps coming into effect on March 1, the Board of Governors of the Federal Reserve System, the Office of Comptroller of the Currency (OCC) and the European Supervisory Authorities (ESA) have each issued statements suggesting that they… Continue Reading

CFTC Provides Time-Limited Relief for Variation Margin and Minimum Transfer Amount Provisions

Posted in CFTC, Derivatives
On February 13, the Division of Swap Dealer and Intermediary Oversight (Division) of the Commodity Futures Trading Commission (CFTC) provided time-limited no-action relief for failure of a swap dealer (SD) that does not have a prudential regulator to comply with the CFTC’s variation margin requirements by the March 1 compliance date (March 1 Requirements). (There… Continue Reading

CFTC Releases Time Limited No-Action Relief for Swap Dealers Complying With EU Requirements

Posted in CFTC, Derivatives, EU Developments
On February 1, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) issued No Action Letter 17-05, which allows certain swap dealers to substitute—for a limited period of time—compliance with the non-centrally cleared OTC derivative margin requirements applicable in the European Union (the “EU Rules”) for compliance with certain of the… Continue Reading

CFTC Re-Proposes Minimum Capital Requirements for Swap Dealers and Major Swap Participants

Posted in CFTC, Derivatives, Dodd-Frank Developments
On December 2, the Commodity Futures Trading Commission re-proposed minimum capital requirements for swap dealers (SDs) and major swap participants (MSPs) that are not subject to prudential regulation (Covered Entities). The CFTC had initially proposed capital rules for Covered Entities in 2011 but deferred further action pending finalization and implementation of uncleared swaps margin requirements.… Continue Reading

CFTC Staff Extends Time-Limited Swap Data Reporting Relief for Certain Foreign Swap Dealers and Major Swap Participants

Posted in CFTC, Derivatives
On November 21, the Commodity Futures Trading Commission Division of Market Oversight extended time-limited relief for certain registered swap dealers (SDs) and major swap participants (MSPs) from the swap data reporting rules set forth in Part 45 and Part 46 of the CFTC’s regulations. The relief is available to non-US SDs and non-US MSPs established… Continue Reading

CFTC Releases Swap Dealer De Minimis Exception Report

Posted in CFTC, Derivatives
On August 15, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (Division) published the Swap Dealer De Minimis Exception Final Staff Report, which summarizes industry comments and data related to the scheduled change to the de minimis exception under the CFTC rules defining “swap dealer.” A related preliminary report analyzed swap… Continue Reading

CFTC Extends Relief for Non-US Swap Dealers From Transaction-Level Requirements

Posted in CFTC, Derivatives, Dodd-Frank Developments
On August 4, the Division of Swap Dealer and Intermediary Oversight, Division of Clearing and Risk and Division of Market Oversight of the Commodity Futures Trading Commission extended no-action relief (Relief) from certain transaction-level requirements previously granted to certain non-US swap dealers (SDs). Transaction-level requirements include: (1) required clearing and swap processing; (2) mandatory trade… Continue Reading

SEC Adopts Trade Acknowledgement and Verification Rules for Security-Based Swaps

Posted in Broker-Dealer, Derivatives, Dodd-Frank Developments
On June 8, the Securities and Exchange Commission announced the adoption of the Securities Exchange Act of 1934 (Exchange Act) Rules 15Fi-1 and 15Fi-2, which establish new trade acknowledgement and verification requirements for security-based swap (SBS) entities entering into SBS transactions.… Continue Reading

CFTC Proposes Additional Interest Rate Swaps for Clearing Requirement

Posted in CFTC, Derivatives, Dodd-Frank Developments
The Commodity Futures Trading Commission is proposing to add certain interest rate swaps in nine new currencies to the list of interest rate swaps and related products that are currently subject to mandatory clearing—so these additional swaps also will be subject to mandatory Swap Execution Facility (SEF) or Designated Contract Market (DCM) trading once they… Continue Reading