Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

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CFTC Divisions Announce 2019 Examination Policies

Posted in CFTC, Derivatives

On February 12, the Commodity Futures Trading Commission announced 2019 Examination Priorities (the “Examination Priorities”) for registrants of the Division of Market Oversight (DMO), Division of Swap Dealer and Intermediary Oversight (DSIO), and Division of Clearing & Risk (DCR). This marks the first time that the agency has published Examination Priorities for its divisions.… Continue Reading

ESMA Updates MiFID II Transitional Transparency Calculations for Electricity Derivatives

Posted in Derivatives, EU Developments, Financial Markets

On January 22, the European Securities and Markets Authority (ESMA) published an updated version of its transitional transparency calculations (TTC) for the purposes of the revised Markets in Financial Instruments Directive (MiFID II) and the related Markets in Financial Instruments Regulation (MiFIR).… Continue Reading

ESMA Publishes Updated Q&As on MiFID II and MiFIR Commodity Derivatives Topics

Posted in Derivatives, EU Developments, Financial Markets

On January 4, the European Securities and Markets Authority (ESMA) published an updated version of its questions and answers document (Q&As) on commodity derivative topics under the revised Markets in Financial Instruments Directive (MiFID II) and the Markets in Financial Instruments Regulation (MiFIR). This follows the last updated version of its Q&As, which ESMA published… Continue Reading

SEC Proposes Risk Mitigation Rules for Uncleared Security-Based Swaps

Posted in Derivatives

On December 19, the US Securities and Exchange Commission voted to issue proposed rules that would require the mandatory use of certain risk mitigation techniques by security-based swap dealers and major security-based swap participants (collectively, SBS Entities). Under the proposed rules, SBS Entities will be required to: Reconcile outstanding security-based swaps with applicable counterparties on… Continue Reading

ISDA Publishes 2018 Benchmark Supplement Protocol

Posted in Derivatives

On December 10, the International Swaps and Derivatives Association (ISDA) introduced its latest market protocol, the 2018 Benchmark Supplement Protocol, which is designed to give market participants an efficient means to incorporate terms from the ISDA Benchmark Supplement into their existing and/or future derivative transactions.… Continue Reading

NFA Proposes Amendments Incorporating Swaps into Compliance Rules and Interpretive Notices

Posted in CFTC, Derivatives

On December 10, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission for review and approval proposed amendments to various NFA Compliance Rules and four NFA Interpretive Notices to incorporate swaps into these rules and notices. Specifically, the NFA proposal would amend the following Compliance Rules:… Continue Reading

FCA Publishes Consultation Paper on Restricting CFD Products Sold to Retail Clients

Posted in Derivatives, Digital Assets and Virtual Currencies, Financial Markets, UK Developments

On December 7, the UK Financial Conduct Authority (FCA) published a consultation paper on restricting contract for difference (CFD) and other derivative products sold to retail consumers. In its consultation paper, the FCA is proposing to intervene in the CFD market to address allegedly poor conduct by firms offering CFD products to retail customers, and… Continue Reading

European Commission Reported to Grant Temporary Access to UK Clearing Houses

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

On December 12, it was reported that the European Commission (EC) intends to grant temporary and conditional equivalence status to UK central counterparties (CCPs) under the European Market Infrastructure Regulation (EMIR) in the event of the United Kingdom withdrawing from the European Union (Brexit) without concluding a withdrawal agreement (“no-deal Brexit”).… Continue Reading

CFTC Approves a Final Rule to Amend Uncleared Swap Margin Requirements

Posted in CFTC, Derivatives

On November 19, the Commodity Futures Trading Commission approved a final rule to amend its margin requirements for uncleared swaps for swap dealers and major swap participants for which there is no prudential regulator (CFTC Margin Rule). As a part of the Project KISS initiative, the amendments were designed to harmonize the CFTC Margin Rule… Continue Reading

SEC Issues Statement on Swap Business Conduct Rules

Posted in Derivatives

On October 31, the Securities and Exchange Commission took an unusual additional step towards implementing its rules for security-based swaps (SBS) by issuing a document entitled “Commission Statement on Certain Provisions of Business Conduct Standards for Security-Based Swap Dealers and Major Security-Based Swap Participants.” The novelty of the Statement is that it amounts to a… Continue Reading

Banking Regulators Propose Revised Methodology for Calculating Derivatives Exposure

Posted in Banking, Derivatives

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (the agencies) are inviting public comment on a proposal that would implement a new approach for calculating the exposure amount of derivative contracts under the agencies’ regulatory capital rule.… Continue Reading

HM Treasury Publishes Draft Brexit Statutory Instrument Relating to EMIR

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

On October 22, HM Treasury published the Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018 (Draft EMIR (Brexit) SI), a draft statutory instrument (SI) relating to the European Market Infrastructure Regulation (EMIR). It also has published a supporting explanatory memorandum.… Continue Reading

FCA Publishes Evaluation Paper Relating to Bringing Additional Benchmarks Into Regulatory and Supervisory Regime

Posted in Derivatives, Financial Markets, UK Developments

On October 22, the UK Financial Conduct Authority (FCA) published an evaluation paper that considers the impact that bringing seven additional benchmarks into its regulatory and supervisory regime had on the market. The paper evaluates the Benchmarks (Amendment) Instrument 2015 (Benchmarks Instrument), by which the FCA made amendments to the FCA Handbook to reflect the… Continue Reading

FCA Updates Webpage on MiFID II Position Limits for Commodity Derivative Contracts

Posted in Derivatives, Financial Markets, UK Developments

On October 22, the UK Financial Conduct Authority (FCA) updated its webpage for bespoke position limits set for a number of commodity derivatives traded on UK trading venues, namely contracts traded on ICE Futures in the United Kingdom. Following ICE Futures’ recent update of its range of products, the FCA has made the following amendments… Continue Reading

SEC Reopens Comment Period for Unfinished Security-Based Swap Rules

Posted in Derivatives, Dodd-Frank Developments, SEC/Corporate

On October 11, the Securities and Exchange Commission demonstrated renewed interest in completing the regulatory regime for security-based swaps (SBS) by re-opening the comment periods for a number of SBS rules that were previously proposed but never adopted. Specifically, the SEC is requesting further comment on the following proposals:… Continue Reading

ESMA Updates Q&As Relating to EMIR and MiFIR

Posted in Derivatives, EU Developments, Financial Markets

On September 26, the European Securities and Markets Authority (ESMA) published updates to two of its sets of question and answer documents (Q&As): (1) Q&As relating to the implementation of the European Market Infrastructure Regulation (EMIR); and (2) those relating to data reporting under the Markets in Financial Instruments Regulation (MiFIR).… Continue Reading

Joint Audit Committee Publishes Regulatory Alert Regarding Residual Interest Withdrawals

Posted in CFTC, Derivatives

On August 14, the Joint Audit Committee (JAC) released Regulatory Alert #18-04. The Alert, which responds to industry requests, clarifies the procedures that a futures commission merchant (FCM) should follow prior to making an intra-day withdrawal from the residual interest amount that the FCM maintains in its segregated, secured 30.7 and cleared swap customer accounts… Continue Reading

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

ESMA Updates TTC Calculations for MiFID II/ MiFIR

Posted in Derivatives, EU Developments, Financial Markets

On August 6, the European Securities and Markets Authority (ESMA) published an updated version of the transitional transparency calculations (TTC) for the purposes of the revised Markets in Financial Instruments Directive (MiFID II) and the associated Markets in Financial Instruments Regulation (MiFIR). The TTC is a series of calculations in relation to equity and non-equity… 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

AFME and ISDA Publish Paper on Brexit Contractual Continuity Issues in OTC Derivatives

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

On July 30, the Association of Financial Markets in Europe (AFME) and the International Swaps and Derivatives Association, Inc. (ISDA) released a paper outlining the challenges UK and EU firms will face in relation to legacy over-the-counter (OTC) derivative contracts following the United Kingdom’s departure from the European Union (Brexit).… 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