On May, 27, the Alternate Reference Rate Committee (ARRC) that works under the auspices of the Federal Reserve Bank of New York issued a set of “Best Practices for Completing Transition Away from LIBOR.” The Best Practices reinforce the ARRC’s position that markets should cease using the London Inter-bank Offered Rate (LIBOR) as a reference rate in financial transactions well before the December 31, 2021 end date identified by UK regulators by providing specific dates by which specific products should be LIBOR-free.
Continue Reading LIBOR Transition Best Practices Statement Issued by ARRC

On May 22, the Financial Industry Regulatory Authority (FINRA) issued an open invitation for member firms and other interested parties to provide views and information about the security-based swap (SBS) market, with particular focus on broker-dealer SBS activities and the application of FINRA rules to those activities. The invitation, which is not a mandatory information request, includes the following questions:
Continue Reading FINRA Requests Comments on Security-Based Swaps

On May 19, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission proposed technical amendment to several of NFA’s Rules and Interpretive Notices. In addition to correcting numerous cross-references and eliminating obsolete provisions, the proposed technical amendments add a definition of Swap Execution Facility (SEF) to NFA Compliance Rule 1-1 and require

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

The International Swaps and Derivatives Association, Inc. (ISDA) has launched a new webpage containing information about interest rate benchmark reform and the transition away from the use of interbank offered rates (IBORs, including LIBOR) as floating rates in swap transactions. The page and subsequent materials are available to everyone, not just ISDA members.
Continue Reading ISDA Launches Benchmark Reform Information Source

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

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