Corporate & Financial Weekly Digest

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Tag Archives: CFTC

NFA Proposes to Amend NFA Registration Rule 802

Posted in CFTC
On November 30, the National Futures Association (NFA) submitted proposed amendments to NFA Registration Rule 802 to the Commodity Futures Trading Commission. The amendment is intended to ensure the language of Rule 802 is consistent with that in recently amended registration forms. Specifically, the amendments reflect changes in the language of Forms 7-R; 8-R; and… Continue Reading

NFA Proposes to Amend NFA Compliance Rules 2-36 and 2-43

Posted in CFTC
On December 4, the National Futures Association (NFA) submitted proposed amendments to NFA Compliance Rule 2-36 and Rule 2-43 to the Commodity Futures Trading Commission. The amendment to NFA Compliance Rule 2-36 will require forex dealer members (FDM) to disclose to customers on a per-trade basis: (1) any commissions or other fees charged; (2) for… Continue Reading

CFTC Releases Rule Enforcement Review of the Chicago Board of Trade, Chicago Mercantile Exchange, Commodity Exchange, Inc. and New York Mercantile Exchange, Inc.

Posted in CFTC
On December 4, the Commodity Futures Trading Commission released a report of the results of its Division of Market Oversight’s (Division) Rule Enforcement Review of the Chicago Board of Trade, Chicago Mercantile Exchange, Commodity Exchange, Inc. and New York Mercantile Exchange, Inc. (collectively the CME Group).… Continue Reading

EU and CFTC Implement Mutual Recognition of Derivatives Trading Venues

Posted in CFTC, Derivatives, EU Developments, Financial Markets
As contemplated by announcements last month, the European Commission (EC) and the Commodity Futures Trading Commission (CFTC) took action this week to implement mutual recognition of derivatives trading venues in advance of the January 3, 2018 compliance date for the Markets in Financial Instruments Directive (MiFID II) requirement that the most liquid derivative instruments that… Continue Reading

CFTC Issues No-Action Letter Extending Swap Reporting Relief for Enumerated Jurisdictions

Posted in CFTC
On November 30, the Commodity Futures Trading Commission issued No-Action Letter (NAL) 17-64, which extends, for an additional three years, swap reporting relief originally granted to most swap dealers established under the laws of Australia, Canada, the European Union, Japan or Switzerland (collectively, the “Enumerated Jurisdictions”) by NAL 13-75 (December 20, 2013). The relief continues… Continue Reading

CFTC Extends No-Action Relief for Shanghai Clearing House

Posted in CFTC
The Commodity Futures Trading Commission’s Division of Clearing and Risk (DCR) has extended no-action relief previously granted to the Shanghai Clearing House in May. The no-action relief provides that DCR will not recommend the CFTC take enforcement action against the Shanghai Clearing House for failure to register as a derivatives clearing organization (DCO) in light… Continue Reading

CFTC Provides Additional Time for Annual SEF Reports

Posted in CFTC
The Commodity Futures Trading Commission’s Division of Market Oversight (DMO) has issued relief to allow swap execution facilities (SEFs) an additional 30 days to prepare and submit their annual compliance reports and financial reports for the fourth quarter. As background, CFTC regulations require each SEF to file a financial report within 60 days after the… Continue Reading

NFA Issues Investor Advisory on Futures on Virtual Currencies

Posted in CFTC
Concurrent with the Commodity Futures Trading Commission’s statement regarding the expected launch of futures on virtual currencies by the Chicago Mercantile Exchange, the Chicago Board Options Exchange Futures Exchange and the Cantor Exchange, the National Futures Association (NFA) has issued an advisory cautioning investors that trading these products “involves a high level of risk and… Continue Reading

NFA Proposes To Amend Recordkeeping Requirements for Members Subject to Enhanced Supervisory Requirements

Posted in CFTC
The National Futures Association (NFA) has proposed amendments to its interpretive notice entitled “Compliance Rule 2-9: Enhanced Supervisory Requirements.” Specifically, the proposed amendments would require all members subject to enhanced supervisory requirements to maintain a record of all electronic written messages, including emails, text messages, instant messages, chat room discussions and other social media communications.… Continue Reading

CFTC Announces 2018 Agricultural Commodity Futures Conference

Posted in CFTC
On November 15, the Commodity Futures Trading Commission announced that it will host, together with the Center for Risk Management Education and Research at Kansas State University, a new two-day event called Protecting America’s Agricultural Markets: An Agricultural Commodity Futures Conference on April 5–6, 2018. The conference will take place in Overland Park, Kansas, and… Continue Reading

CFTC’s Division of Clearing and Risk Provides No-Action Relief to Certain Foreign Financial Institutions From Swap Clearing Requirements

Posted in CFTC, Derivatives
On November 7, the Commodity Futures Trading Commission’s (CFTC) Division of Clearing and Risk (DCR) published Staff Letters 17-57, 17-58 and 17-59 (Staff Letters), which provided Banco Centroamericano de Integración Económica, the European Stability Mechanism, and the North American Development Bank, respectively, with no-action relief from the swap clearing requirements set forth in Section 2(h)(1)… Continue Reading

CFTC Extends No-Action Relief for Certain Swaps Executed as Part of Packaged Transactions

Posted in CFTC
On October 31, the Commodity Futures Trading Commission’s Division of Market Oversight extended no-action relief for certain swaps executed as part of packaged transactions. Transactions where at least one swap is subject to a trade execution requirement and either (1) at least one individual component is a bond issued and sold in the primary market… Continue Reading

CFTC Extends No-Action Relief to SEFs Related to Certain Audit Trail Requirements

Posted in CFTC
On October 31, the Commodity Futures Trading Commission’s Division of Market Oversight extended no-action relief to swap execution facilities (SEFs) from the requirement to capture post-execution allocation information in their audit trail data. To rely on the no-action relief, SEFs must (1) have a rule requiring market participations to provide post-execution allocation information upon request… Continue Reading

CFTC Grants Amended Order With Respect to Foreign Futures Contracts Listed on the Dubai Mercantile Exchange

Posted in CFTC
On October 31, the Commodity Futures Trading Commission issued an order to the Chicago Mercantile Exchange (CME) and its clearing members that are registered futures commission merchants with regard to foreign futures contracts currently listed or that will be listed in the future for trading on the Dubai Mercantile Exchange (DME) and cleared by the… Continue Reading

CFTC Extends Swap Dealer De Minimis Threshold Until December 2019

Posted in CFTC, Derivatives
On October 26, the Commodity Futures Trading Commission issued an Order that maintains the swap dealer de minimis threshold at $8 billion until a new de minimis threshold phase-in termination date of December 31, 2019. Prior to the Order, the threshold was set to decrease to $3 billion on December 31, 2018. The CFTC continues… Continue Reading

Three Developments Concerning EU-US Cross-Border Swaps

Posted in CFTC, Derivatives, Dodd-Frank Developments, EU Developments
On October 13, the Commodity Futures Trading Commission and the European Commission (EC) made three announcements that are significant for cross-border swap activity between the United States and Europe. CFTC Margin Rule Comparability Determination. The CFTC has made a determination that the margin rules for uncleared swaps that apply in the European Union are comparable to… Continue Reading

CFTC Clarifies That Variation Margin Constitutes Settlement

Posted in CFTC, Derivatives
The Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission has issued an interpretive letter clarifying that payments of variation margin, price alignment amounts and other payments in satisfaction of outstanding exposures on a counterparty’s cleared swap positions constitute “settlement” under the Commodity Exchange Act (CEA) and CFTC Regulation 39.14. The CEA… Continue Reading

CFTC Conducts DCO Liquidity Stress Tests

Posted in CFTC, Derivatives
The Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission has issued a report summarizing stress tests conducted by three derivatives clearing organizations (DCOs): the Chicago Mercantile Exchange (CME), ICE Clear US (ICUS) and LCH Ltd (LCH). During the stress tests, DCR evaluated whether each DCO could obtain, in a timely manner,… Continue Reading

CFTC Issues Primer on Cryptocurrencies

Posted in CFTC
The Commodity Futures Trading Commission’s LabCFTC has issued a primer on cryptocurrencies and distributed ledger technology. The primer is the first in a series that is intended to provide the public with educational information on financial technology innovation. In the primer, LabCFTC highlights various risks inherent in cryptocurrencies, including operational risks, cybersecurity risks, speculative risks… Continue Reading

CFTC’s Division of Market Oversight Issues No-Action Letter Providing Reporting Parties With Additional Relief From OCR Final Rule Reporting Obligations

Posted in CFTC
On September 25, the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) issued Staff Letter No. 17-45 (Staff Letter), which both extends current relief, and provides additional relief, to reporting parties that must comply with the reporting obligations required by the ownership and control reports (OCR) final rule (OCR Final Rule). DMO is… Continue Reading

CFTC Approves Delegated Authority Provisions Related to Designated Contract Markets

Posted in CFTC
On September 26, the Commodity Futures Trading Commission (CFTC) adopted final rules delegating to the Director of the CFTC’s Division of Market Oversight (DMO) (or such employee or employees as the Director designates) the authority to notify each designated contract market (DCM) whether it is classified as a “covered DCM” (as defined in CFTC Regulation… Continue Reading

CFTC Provides No-Action Relief From CPO and CTA Registration to a Private University

Posted in CFTC
On September 13, the Division of Swap Dealer and Intermediary Oversight (DSIO or Division) of the Commodity Futures Trading Commission (CFTC or Commission) granted no-action relief from commodity pool operator (CPO) and commodity trading advisor (CTA) registration to a private university, subject to certain conditions. At issue was (1) the university’s collective management of an… Continue Reading

CFTC Provides No-Action Relief From Commission Regulation 4.7(b)(2) Reporting Requirements

Posted in CFTC
The Division of Swap Dealer and Intermediary Oversight (DSIO or Division) of the Commodity Futures Trading Commission (Commission or CFTC) recently granted no-action relief from the reporting requirements of CFTC Rule 4.7(b)(2) to a commodity pool operator (CPO) of two commodity pools, subject to certain conditions. CFTC Rule 4.7(b)(2) places a reporting requirement on a… Continue Reading