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Corporate & Financial Weekly Digest

Category Archives: CFTC

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CFTC Proposes Rules to Simplify Process for Foreign Clearing Organizations to Obtain DCO Registration Exemptions

Posted in CFTC, Derivatives
On August 8, the Commodity Futures Trading Commission announced that it has proposed rules pursuant to which a clearing organization located outside of the United States may obtain an exemption from registration as a derivatives clearing organization (DCO) in order to provide swaps clearing services to certain US persons. The proposed rules codify the CFTC’s… Continue Reading

NFA Announces the Effective Date of Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities

Posted in CFTC, Derivatives, Digital Assets and Virtual Currencies
On August 9, the National Futures Association (NFA) announced the effective date of its recently adopted Interpretive Notice, Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities. The Interpretative Notice will go into effect on October 31 (“Effective Date”).… Continue Reading

CFTC Extends No-Action Relief to Shanghai Clearing Firm

Posted in CFTC, Derivatives
On July 31, the Commodity Futures Trading Commission’s Division of Clearing and Risk extended no-action relief to the Shanghai Clearing House (SHCH). Originally set to expire on February 28, 2019, the relief is extended until July 31, 2021. The no-action relief, originally granted in May 2016 and renewed several times, permits SHCH to continue to… Continue Reading

CFTC Proposes Improvements to Initial Margin Segregation Rule

Posted in CFTC, Derivatives, Dodd-Frank Developments
The Commodity Futures Trading Commission KISS initiative has finally produced some substantive results for swap dealers in the form of proposed amendments to Subpart L of the CFTC’s regulations (“Segregation of Assets in Uncleared Swap Transactions”) that were issued for comment on July 24. Subpart L (which encompasses CFTC Regulations 23.700-704) has been problematic for… Continue Reading

CFTC Proposes Amendments to Its Position Limit Rules

Posted in CFTC
The Commodity Futures Trading Commission is proposing to amend its position limits rules for security futures products (SFPs) to provide exchanges that list SFPs with greater discretion in setting limit levels, allowing the exchanges to provide a more effective risk management tool. Specifically, the proposed CFTC amendment would: (1) increase the default level of equity… Continue Reading

NFA Interpretive Notice Regarding Engaging in Virtual Currency

Posted in CFTC, Derivatives, Digital Assets and Virtual Currencies
On July 20, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission for approval a proposed interpretive notice regarding Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities. The new disclosure obligations will apply to all NFA members engaging in transactions in virtual currency derivatives and virtual currency, as well as other… Continue Reading

CFTC Permits DCOs to Invest Customer Funds in European Sovereign Debt

Posted in CFTC, Derivatives
The Commodity Futures Trading Commission has issued an order granting limited relief from the provisions of CFTC Rule 1.25 that will allow derivatives clearing organizations (DCOs) to invest euro-denominated futures and cleared swap customer funds in euro-denominated sovereign debt issued by France and Germany. Among other requirements, the order provides that the dollar-weighted average of… Continue Reading

Regulators Publish Changes to the Volcker Rule

Posted in Banking, CFTC, Dodd-Frank Developments
On July 17, the Federal Register published proposed changes to the Volcker Rule that were jointly approved by the Federal Reserve Board, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Securities and Exchange Commission. As described in greater detail in the June 1,… Continue Reading

CFTC Issues Customer Advisory on Digital Coins and Tokens

Posted in CFTC, Digital Assets and Virtual Currencies
The Commodity Futures Trading Commission has issued an advisory warning customers of the dangers of purchasing digital coins or tokens. Among other things, the advisory warns customers that buying digital coins or tokens for speculative purposes carries significant risk and identifies various factors that could affect the current or longer-term value of a digital coin… Continue Reading

NFA Proposes Amendments to Compliance Rule 2-9(c) and Interpretive Notice: Compliance Rule 2-9: FCM and IB Anti-Money Laundering Program

Posted in CFTC
On June 15, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission proposed amendments to NFA Compliance Rule 2-9(c) and the NFA Interpretive Notice entitled Compliance Rule 2-9: FCM and IB Anti-Money Laundering (AML) Program (collectively, the Amendments). Rule 2-9(c) requires futures commission merchants (FCMs) and introducing brokers (IBs) to develop and… Continue Reading

CFTC Votes on a Final Rule and Two Proposed Rule Amendments

Posted in CFTC
On June 4, the Commodity Futures Trading Commission voted to approve a final rule to amend various portions of Part 49 of CFTC Regulations relating to swap data repository indemnification and related matters. The CFTC also voted to approve two rule proposals, including (1) proposed amendments relating to Volcker Rule restrictions on proprietary trading and… Continue Reading

CFTC Proposes To Maintain Swap Dealer Registration De Minimis Exception at $8 Billion

Posted in CFTC
The Commodity Futures Trading Commission is proposing various amendments to the de minimis exception from registration as a swap dealer. The de minimis exception provides that a person is not deemed to be a swap dealer unless its swap dealing activities exceed an aggregate gross notional amount of $8 billion measured over any 12-month period.… Continue Reading

CFTC Issues Proposed Rule to Amend Margin Requirements

Posted in CFTC, Derivatives
On May 17, the Commodity Futures Trading Commission released a proposed rule to amend the CFTC’s margin requirements for uncleared swaps for swap dealers and major swap participants. The proposed rule amendments are intended to make the same changes to the CFTC margin requirements that federal banking regulators recently proposed for the margin rules for… Continue Reading

CFTC Issues Virtual Currency Advisory for Exchanges and Clearinghouses

Posted in CFTC, Derivatives
On May 21, the Commodity Futures Trading Commission released a staff advisory that provides guidance to designated contract markets (DCMs) and swap execution facilities (SEFs) that plan to list virtual currency derivatives for trading and clearing organizations (DCOs) intending to clear virtual currency derivatives. The advisory notes that the CFTC’s recommendations are informed by the… Continue Reading

CFTC Grants Foreign Board of Trade Application to ASX24

Posted in CFTC
On May 15, the Commodity Futures Trading Commission issued an order granting Australian Securities Exchange Limited (ASX24) registration as a foreign board of trade (FBOT). As a registered FBOT, ASX24 is authorized to permit members and other exchange participants to trade directly on its platform without having to trade through an intermediary. With this order,… Continue Reading

CFTC and NASAA Sign Information Sharing Agreement

Posted in CFTC
On May 21, the Commodity Futures Trading Commission announced that it had signed a mutual cooperation agreement with the North American Securities Administrators Association (NASAA) to promote information sharing between the CFTC and state securities regulators. The agreement is designed to assist in the enforcement of the Commodity Exchange Act, which state securities regulators and… Continue Reading

CFTC Grants Relief to Certain Non-US Persons in Determining Swap Dealer and Major Swap Participant Status

Posted in CFTC, Derivatives
On May 16, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) provided no-action relief for certain non-US persons from counting swaps with international financial institutions, such as the International Monetary Fund, that are incorporated or based in the United States in determining swap dealer and major swap participant status as… Continue Reading

CFTC Opens Access to Indian Futures Market for US Customers

Posted in CFTC
On May 17, the Commodity Futures Trading Commission issued an order to the National Stock Exchange of India (NSE) through its Part 30 exemptive program, which affords regulatory deference to foreign regulatory frameworks and provides US customers greater access to certain foreign futures markets. The order allows NSE’s members to directly accept US customer funds… Continue Reading

CFTC Staff Issues Interpretive Guidance Regarding Aggregation by Passive Pool Investors

Posted in CFTC
On May 2, the Commodity Futures Trading Commission’s Division of Market Oversight responded to a request for an interpretation regarding CFTC Rule 150.4(b)(1), which provides an exception from the CFTC’s speculative position limit aggregation rules for certain “passive” investors in commodity pools. Generally, for purposes of calculating compliance with speculative position limits, the CFTC’s rules… Continue Reading

CFTC’s Division of Swap Dealer and Intermediary Oversight Extends Exemptive Relief From CFTC Regulations 4.7 and 4.2 Requirement to Prepare Financial Statements in Accordance With US GAAP

Posted in CFTC, Derivatives
On March 30, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) issued Letter 18-09, which granted exemptive relief to a commodity pool operator (CPO) of a foreign “Master Fund” and a US “Feeder Fund.” CFTC rules generally require that the financial statements a CPO is required to provide US pool… Continue Reading

NFA Issues Notice Regarding Reporting Requirements for CPOs, CTAs and IBs That Deal in Virtual Currencies

Posted in CFTC
On March 27, the National Futures Association (NFA) issued Notice I-18-07, reminding commodity pool operators (CPOs), commodity trading advisors (CTAs) and introducing brokers (IBs) to immediately notify NFA by amending the firm-level section of their respective annual questionnaires if they trade any virtual currency products or solicit or accept any order in virtual currency products,… Continue Reading

CFTC Seeks Market Risk Advisory Committee Membership Nominations and Public Comment on Committee Priorities

Posted in CFTC, Derivatives
On March 15, the Commodity Futures Trading Commission published in the Federal Register a request for nominees for the membership positions on the Market Risk Advisory Committee (MRAC). MRAC is a discretionary advisory committee that conducts public meetings and submits reports and recommendations to the CFTC on matters including systemic risk and changes in the… Continue Reading