On April 28, the Division of Data of the Commodity Futures Trading Commission issued a renewal of the temporary no-action relief available to entities (Relief Counterparties) that submit certain swaps for clearing by derivatives clearing organizations that operate pursuant to CFTC exemptive orders or staff no-action letters (Relief DCOs). CFTC Letter No. 21-12 extends relief

On March 26, the Financial Industry Regulatory Authority (FINRA) published a notice encouraging employees of member firms and other interested persons to apply for upcoming vacancies on FINRA’s advisory and ad hoc committees. The Notice provides a general description of the responsibilities of each of FINRA’s advisory committees and some of FINRA’s ad hoc committees.
Continue Reading 2021 Advisory Committee Overview and Engagement Notice

On March 25, the Financial Industry Regulatory Authority (FINRA) issued a notice warning member firms that there appears to be an increase in new customers opening online brokerage accounts and engaging in Automated Clearing House (ACH) “instant funds” abuse to effect securities trading. Some firms provide individuals opening a brokerage account online with instant access to funds, allowing those customers to trade in their online accounts as soon as they enable ACH transactions, without having to wait for the payment to settle. FINRA has observed that the increase in misuse of instant funds is correlated with the recent market volatility driven by social media interest in certain securities.
Continue Reading FINRA Alerts Firms to Recent Increase in ACH “Instant Funds” Abuse

On March 24, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 21-13 (Notice) announcing updates to its interpretations regarding FINRA’s Margin Rule 4210(f)(8)(B)(ii) (Rule). The Rule provides (1) the numerical determination of when a customer is classified as a “pattern trader;” and (2) that if a member knows or has reasonable basis to believe that a customer will engage in pattern day trading, then the pattern day trading margin requirements of the rule will apply.
Continue Reading FINRA Announces Updates to the Interpretation on FINRA’s Margin Rule for Day Trading

On March 17, Acting Chairman Rostin Benham of the Commodity Futures Trading Commission announced that he has created a new Climate Risk Unit (CRU) to focus on the role of derivatives in mitigating climate-related risks and helping the economy transition to lower carbon usage. The CRU includes staff from across the CFTC’s various divisions and officers and represents the next step in years of climate leadership for the CFTC (including last year’s publication of the Market Risk Advisory Committee’s Climate-Related Market Risk Subcommittee’s report on Managing Climate Risk in the US Financial System).
Continue Reading CFTC Acting Chairman Announces New Climate Risk Unit

On March 11, the Financial Crimes Enforcement Network (FinCEN) issued an advisory to announce that the Financial Action Task Force (FATF) has updated its list of jurisdictions with strategic anti-money laundering and combatting the financing of terrorism (AML/CFT) deficiencies.
Continue Reading NFA Publishes Series of Member Notices Related to Common Deficiencies and Other Regulatory Matters

On February 8, the National Futures Association (NFA) released three Notices to Member that cover educational resources, common regulatory and compliance deficiencies, and recent amendments to NFA Rules and Interpretative notices, each aimed at a different audience, as indicated below.
Continue Reading NFA Publishes Series of Member Notices Related to Common Deficiencies and Other Regulatory Matters

On December 18, 2020, the Securities and Exchange Commission announced the creation of a joint venture among multiple SEC divisions and offices to coordinate roles related to the regulation of security-based swaps (SBS) and provide oversight of entities that will be required to register with the SEC (SBS entities).
Continue Reading SEC Announces New Internal Security-Based Swaps Joint Venture