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On May 19, the Commodity Futures Trading Commission’s Global Markets Advisory Committee approved a report that contains several recommendations for action by the CFTC with respect to the implementation of its initial margin (IM) rules for uncleared swaps. The recommendations are focused on the unique challenges faced by small end users of swaps and entities that engage in swap activity through separate managed accounts (SMAs).…
Continue Reading CFTC GMAC Recommendations Concerning Initial Margin for Swaps

On May 20, the Commodity Futures Trading Commission’s Division of Enforcement (Division) issued new guidance (Guidance) outlining factors the Division will consider in recommending civil monetary penalties (CMPs) imposed by the CFTC in enforcement actions. This is the first publicly issued Division CMP guidance since the CFTC published its penalty guidelines in 1994. The Guidance is designed to provide market participants with greater transparency as to Division staff’s decision-making criteria regarding CMPs.…
Continue Reading CFTC Division of Enforcement Issues Civil Monetary Penalty Guidance

On May 19, the Commodity Futures Trading Commission published in the Federal Register a request for public comment on the CFTC’s draft 2020-2024 Strategic Plan (Strategic Plan). The current draft of the Strategic Plan includes a discussion of the CFTC’s mission, vision, core values, strategic goals and strategic objectives. The proposed strategic goals include:…
Continue Reading CFTC Seeks Public Comments on 2020-2024 Strategic Plan

The Commodity Futures Trading Commission Divisions of Market Oversight (DMO), Swap Dealer and Intermediary Oversight (DSIO), and Clearing and Risk (DCR) (together, the Divisions) issued CFTC Letter 20-17 to remind Designated Contract Markets (DCMs), Futures Commission Merchants (FCMs) and Derivatives Clearing Organizations (DCOs) of their obligations to prepare for extreme market volatility, low liquidity and possibly negative pricing for certain contracts. The Divisions issued the advisory in light of unusually high volatility and negative pricing experienced in the May 2020 West Texas Intermediate (WTI), Light Sweet Crude Oil Futures contract on April 20 (the penultimate day of trading and expiration of the contract), although the guidance also applies to trading in other commodities.…
Continue Reading CFTC Staff Issues Advisory Addressing Current Market Conditions

On May 13, National Futures Association (NFA) issued a Notice to Members addressing the recent increase in fraudulent phishing emails, including emails purporting to be from financial institutions or their employees. These urgent emails often include an infected attachment or link, a request for confidential information, or a link to a fraudulent website. With any email, NFA cautions members to verify the sender before responding and to ensure the validity of links or attachments before clicking on them.…
Continue Reading NFA Issues Warning Regarding Phishing Emails

To address the latest COVID-19 developments and the impact on the derivatives industry, National Futures Association (NFA) is hosting a webinar focused on NFA’s current operations, regulatory approach and relief issued. The webinar is scheduled for May 27, 2020 at 9:30 a.m. CT.

The webinar is free, but registration is required. The webinar’s registration page…

On April 24, at the request of the National Futures Association (NFA), the staff of the Commodity Futures Trading Commission (CFTC) issued a no-action letter providing regulatory relief to principals of registrants and applicants for associated person (AP) registration with respect to submission of fingerprint cards. …
Continue Reading CFTC and NFA Issue Temporary No-Action Relief for Principal or Associated Person Listings/Registrations

On April 28, Commissioner Brian D. Quintenz of the Commodity Futures Trading Commission (CFTC) announced that he will not seek re-nomination for another five-year term as a Commissioner. While his statutory term expires in April, he intends to remain in his role until the earlier of (1) October 31 or (2) confirmation of his successor. …
Continue Reading CFTC Commissioner Brian D. Quintenz Announces End of His Term

National Futures Association (NFA) has provided limited relief to commodity trading advisors (CTAs) who are also registered investment advisers from compliance with certain portions of NFA Rule 2-29 “Communications with the Public and Promotional Material” and a related Interpretive Notice. Generally, CTAs presenting past performance in promotional materials are required to include performance net of all commissions, fees and expenses. With this relief, CTAs who are also registered as investment advisers with the Securities and Exchange Commission may present past performance to eligible contract participants (ECPs) on a gross basis in non-public one-on-one presentations, if the CTA:…
Continue Reading NFA Published Amendments to Its Advertising Rules