On August 1, 2019, the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) issued a letter extending prior no-action relief, which suspended the need for certain persons otherwise required to aggregate positions to proactively file formal written notice for position limits purposes. The prior relief, CFTC No Action Letter 17-37, was set to expire on August 12, 2019.
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The Commodity Futures Trading Commission has published for comment two proposals intended to reduce the regulatory obligations that certain non-US clearing organizations would otherwise be subject. In accordance with section 5b(a) of the Commodity Exchange Act (CEA), it is unlawful for any clearing organization to clear swaps on behalf of US persons unless that clearing organization is registered with the CFTC as a derivatives clearing organization (DCO). However, CEA section 5b(h) authorizes the CFTC to exempt from registration any non-US clearing organization that is “subject to comparable, comprehensive supervision and regulation” by its home country regulator. In the exercise of this latter authority, the CFTC has proposed to permit those non-US clearing organizations that the CFTC determines do not pose a substantial risk to the US financial system to elect either 1) registration as a DCO with alternative compliance obligations; or 2) an exemption from registration altogether.
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On July 22, the Commodity Futures Trading Commission, in conjunction with the Financial Crimes Enforcement Network (FinCEN), issued interpretative guidance to introducing brokers in commodities (IBs) that do not introduce customers to a futures commission merchant (FCM) that carries their customers’ accounts.
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The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight and Division of Clearing and Risk have issued CFTC Staff Advisory 19-17 (the Advisory), providing 1) guidance with respect to CFTC Rule 1.56(b); and 2) time-limited no-action relief with respect to CFTC Rule 39.13(g)(8)(iii), as those rules relate to the treatment of separate accounts of the same customer (i.e., beneficial owner). The Advisory responds to several requests for guidance following the publication of Joint Audit Committee (JAC) Regulatory Alerts #19-02 and #19-03.
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On June 25, 2019, the Commodity Futures Trading Commission announced that it had approved the application of LedgerX LLC (LedgerX) for designation as a contract market under Section 5 of the Commodity Exchange Act (CEA) and Part 38 of the CFTC’s regulations. LedgerX has been registered with the CFTC as a swap execution facility and

On June 25, 2019, the Commodity Futures Trading Commission published for comment a proposed amendment to CFTC Regulation 30.10. Part 30 of the CFTC’s regulations govern the offer and sale of foreign futures and options to customers located in the United States. Among other requirements, Regulation 30.4 requires any person that solicits or accepts orders for execution on a foreign board of trade and that, in connection therewith, accepts any money or securities to margin any resulting contracts, to be registered with the CFTC as a futures commission merchant (FCM). Regulation 30.10 authorizes the CFTC to exempt from registration as an FCM any person located outside of the U.S. that the CFTC finds is subject to a comparable regulatory structure in the jurisdiction in which it is located. Requests for exemption are generally filed by a non-U.S. regulatory authority or self-regulatory organization on behalf of their registrants.
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On June 20, the National Futures Association (NFA) issued Notice to Members I-19-15 (Notice), announcing the approval of a $1,750 annual surcharge (Surcharge) on certain NFA members, including futures commission merchants for which NFA is the designated self-regulatory organization, introducing brokers, commodity pool operators and commodity trading advisors that are approved as swap firms pursuant to NFA Bylaw 301(l)1. The Commodity Futures Trading Commission recently approved an amendment to NFA Bylaw 1301 that allows for the Surcharge (for additional information regarding the amendment, please refer to the May 24, 2019 edition of Corporate & Financial Weekly Digest). The NFA Board of Directors determined to impose the Surcharge because NFA does not currently assess any fees related to its oversight of the swaps activities of member firms.

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On June 12, the National Futures Association (NFA) amended several of its rules and interpretive notices to incorporate expressly supervision requirements for NFA members’ swaps activities. NFA Compliance Rule 2-9(a), as amended, will apply specifically to futures commission merchant (FCM), introducing brokers (IB), commodity pool operator (CPO) and commodity trading advisor (CTA) members. New