Benchmarks Regulation

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On October 16, the Financial Stability Board (FSB) published a global transition roadmap, including a timetable of actions to be taken by financial and non-financial institutions exposed to the London Inter-bank Offered Rate (LIBOR) benchmarks, to ensure a seamless transaction away from LIBOR by the end of 2021 (the Roadmap).
Continue Reading FSB Publishes Global Transition Roadmap on LIBOR

On October 13, the Division of Market Oversight (DMO) of the Commodity Futures Trading Commission issued two no-action letters that provide limited relief from swap transaction and pricing data reporting requirements for specific derivatives clearing organizations (DCOs) and market participants that take part in upcoming DCO auctions intended to assist in transitioning certain cleared swaps…

On September 24, the European Securities and Markets Authority (ESMA) published a consultation paper examining transaction reporting and reference data obligations under the Market in Financial Instruments Regulation (MiFIR) (the Consultation Paper).
Continue Reading ESMA Publishes Consultation Paper on MiFIR Reference Data and Transaction Reporting

On August 14, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 20-28 that included an updated Security Futures Risk Disclosure Statement (the “2020 Statement”). The uniform Security Futures Risk Disclosure Statement (the “Statement”) was jointly developed by FINRA, the National Futures Association (NFA) and several other self-regulatory organizations. The Statement is composed of nine sections and discusses the characteristics and risks of standardized security futures contracts traded on regulated US exchanges.
Continue Reading FINRA Releases an Updated Security Futures Risk Disclosure Statement

On May 15, the Financial Industry Regulatory Authority (FINRA) issued a regulatory notice (the Notice) reminding firms of their obligations in connection with oil-linked exchange-traded products (ETPs). In light of the practical difficulties involved in investing directly in commodities such as oil, commodity-linked ETPs, which often track commodity futures or futures indices rather than the underlying spot commodity, can provide investors with exposure to such commodities. Due to their complexity, ETPs may not be well understood by investors, as the products may be linked to unfamiliar indices or reference benchmarks. As the crude oil market has recently endured extraordinary conditions, several oil-linked ETPs have experienced significant volatility and lost a substantial percentage of their value.
Continue Reading FINRA Issues Regulatory Notice Regarding Sales Practice Obligations With Respect to Oil-Linked Exchange-Traded Products

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

On November 29, the UK’s Financial Conduct Authority (FCA) published a consultation paper on applying the Senior Managers Regime (SMR) to benchmark administrators. (For more information on the Senior Managers and Certification Regime, or SM&CR, please see the July 28, 2017 edition of the Corporate & Financial Weekly Digest.)

SM&CR already applies to banks and insurers, and will apply to most other UK financial services firms as of December 9. Because benchmark administrators only began to be supervised by the FCA in January 2018, the SMR will apply to them starting December 7, 2020. This gives these firms one extra year to prepare for the regime.
Continue Reading SM&CR to Apply to Benchmark Administrators

On October 22, the UK Financial Conduct Authority (FCA) published an evaluation paper that considers the impact that bringing seven additional benchmarks into its regulatory and supervisory regime had on the market.

The paper evaluates the Benchmarks (Amendment) Instrument 2015 (Benchmarks Instrument), by which the FCA made amendments to the FCA Handbook to reflect the additional benchmarks.
Continue Reading FCA Publishes Evaluation Paper Relating to Bringing Additional Benchmarks Into Regulatory and Supervisory Regime