On November 27, the Commodity Futures Trading Commission’s LabCFTC released “A CFTC Primer on Smart Contracts” to provide information on a variety of financial technology (FinTech) topics. LabCFTC is a hub designed for the CFTC to engage with the FinTech community.

The primer defines a “smart contract” as “a set of coded computer functions” that

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 with related rules that certain prudential regulators have adopted (QFC Rules).
Continue Reading CFTC Approves a Final Rule to Amend Uncleared Swap Margin Requirements

On August 29, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (Division) issued a no-action letter confirming that it will not recommend enforcement action against a futures commission merchant (FCM) if the accountant’s audit opinion included in the FCM’s annual financial report does not include “critical audit matters” (or the absence thereof) as required by the Public Company Accounting Oversight Board (PCAOB) standards. CFTC regulations generally require accountants engaged in audits of FCMs to register with the PCAOB and to conduct FCM audits in accordance with PCAOB standards. In 2017, the PCAOB adopted AS 3101, which requires an auditor registered with the PCAOB to communicate any critical audit matters in its audit report related to the financial statements of public companies. “Critical audit matters” include matters that are communicated or required to be communicated to the audit committee and: (1) relate to the accounts or disclosures that are material to the financial statements; and (2) involve especially challenging, subjective or complex auditor judgment.
Continue Reading CFTC Releases No-Action Position on PCAOB Requirement to Communicate Critical Audit Matters

On August 28, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (Division) issued time-limited, no-action relief, permitting certain insured depository institutions (IDIs) from counting certain swaps toward the swap dealer de minimis threshold. Relief was requested after certain IDIs experienced a spike in the demand for interest rate swaps from existing loan clients seeking to hedge interest rate risk by entering into floating to fixed interest rate swaps that would otherwise cause the IDIs to exceed the swap dealer de minimis threshold.

Continue Reading CFTC Grants No-Action Relief Relating to Counting Toward the Swap Dealer Registration De Minimis Threshold

On August 28, the US Senate confirmed the nominations of Dawn Stump and Dan Berkovitz as commissioners of the Commodity Futures Trading Commission. With the addition of two new commissioners, all five commissioner positions have now been filled. Commissioners Brian D. Quintenz and Rostin Behnam and Chairman J. Christopher Giancarlo released statements following the Senate

On August 21, the Commodity Futures Trading Commission adopted amendments to Rule 3.3, which sets out the duties of a chief compliance officer (CCO) of a futures commission merchant, swap dealer and major swap participant (each, a registrant). The amended rules are designed to simplify a CCO’s duties under the rule and to harmonize further

On November 6, the Financial Industry Regulatory Authority (FINRA) released Notice to Members 17-37, which provides information about the Pay-to-Play rule applicable to capital acquisition brokers (CABs). The SEC’s pay-to-play rules prohibit an investment adviser and its covered associates from providing or agreeing to provide payment to any person to solicit a government entity

On October 20, the Financial Industry Regulatory Authority (FINRA) proposed a rule change to make permanent an exemption from the Trade Reporting and Compliance Engine (TRACE) reporting requirements for TRACE-Eligible Securities transactions executed on a facility of the New York Stock Exchange (NYSE).
Continue Reading FINRA Proposes to Make Permanent a TRACE-Reporting Exemption

Last week, the Financial Industry Regulatory Authority Board of Governors (Board) had its September meeting. Among other things, the Board approved the publication of two rule proposals.

In particular, the Board authorized the publication of a proposed rule that would allow firms to use technology to conduct remote inspections of certain qualifying offices that have