On July 18, the Financial Industry Regulatory Authority (FINRA) published Regulatory Notice 19-24 (Notice), which encourages member firms to continue notifying their Regulatory Coordinators about their digital assets activities. The Notice extends the requested notification period originally set forth in Regulatory Notice 18-20 from July 31, 2019 to July 31, 2020. (For additional information regarding
Joint Audit Committee Releases Two Regulatory Alerts
On May 14, the Joint Audit Committee (JAC), a representative committee of US futures exchanges and the National Futures Association (NFA), released two regulatory alerts of particular importance to futures commission merchants (FCMs) that clear for customers whose accounts are managed by third-party advisers. The regulatory alerts “reconfirm and reiterate” the JAC’s view of existing law regarding guarantees against loss and margin in the context of multiple accounts of a single beneficial owner at an FCM, which accounts are managed by different advisers and/or traded pursuant to different programs of the same adviser.
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NFA Announces the Effective Date of Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities
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”).
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SEC Disapproves BZX Proposed Rule Change to List Shares of Bitcoin-Based Exchange-Traded Product
On July 26, the Securities and Exchange Commission disapproved a Bats BZX Exchange proposed rule change that would have permitted the listing and trading of shares of the Winklevoss Bitcoin Trust (Trust) on BZX. This is the SEC’s second disapproval of the proposed rule change as it has previously disapproved the exchange’s original proposal in March 2017. Notably, Commissioner Hester Peirce dissented from the SEC’s most recent disapproval. …
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NFA Interpretive Notice Regarding Engaging in Virtual Currency
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 activities in underlying or spot virtual currencies.
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FINRA Encourages Firms To Disclose Activities Related to Digital Assets
On July 6, the Financial Industry Regulatory Authority published Regulatory Notice 18-20, which encourages member firms to promptly notify FINRA if the firm or any of its associated persons or affiliates engages or intends to engage in any activities involving digital assets, such as cryptocurrencies and other virtual coins and tokens. Digital assets activities include those relating to digital assets that are not securities and the activities under Rule 3270 (Outside Business Activities of Registered Persons) and Rule 3280 (Private Securities Transactions of an Associated Person).
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CFTC Suspends Need of Formal Notice for Position Disaggregation Relief
On August 10, the Commodity Futures Trading Commission (the CFTC) issued no-action relief, eliminating the need for certain persons otherwise required to aggregate positions with certain other persons for CFTC position limit purposes to pro-actively file with the CFTC, beginning August 14, formal written notices supporting disaggregation of positions with such other persons relying on…
CFTC Grants DCO Registration to LedgerX
The Commodity Futures Trading Commission has issued an order granting LedgerX LLC registration as a derivatives clearing organization (DCO). As specified in the order, LedgerX is permitted to clear fully collateralized digital currency swaps. A transaction will be fully collateralized if LedgerX holds, at all times, funds in the form of the required payment sufficient to cover the maximum possible loss a counterparty could incur upon liquidation or expiration of the contract.…
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CFTC Grants SEF Registration to LedgerX
The Commodity Futures Trading Commission has issued an order of registration as a swap execution facility (SEF) to LedgerX LLC. As an SEF, LedgerX intends to list options on Bitcoin and other swaps based on digital currencies.
As noted in the order, LedgerX additionally has applied for registration as a derivatives clearing organization.
More information …
CFTC Re-Proposes Minimum Capital Requirements for Swap Dealers and Major Swap Participants
On December 2, the Commodity Futures Trading Commission re-proposed minimum capital requirements for swap dealers (SDs) and major swap participants (MSPs) that are not subject to prudential regulation (Covered Entities). The CFTC had initially proposed capital rules for Covered Entities in 2011 but deferred further action pending finalization and implementation of uncleared swaps margin requirements. The CFTC finalized margin requirements in December 2015 that began being implemented in September 2016.…
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