Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Tag Archives: Commodity Exchange Act

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

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

NFA Adopts 4s Attestation Process for Swap Dealers and Major Swap Participants

Posted in CFTC, Derivatives
National Futures Association (NFA) has revised the process by which each swap dealer (SD) and major swap participant (MSP) applicant demonstrates its ability to comply with Commodity Futures Trading Commission regulations implementing Section 4s of the Commodity Exchange Act (4s Regulations), including but not limited to regulations relating to capital and margin requirements, reporting and… Continue Reading

CFTC Approves Amendments to Recordkeeping Requirements

Posted in CFTC
On May 23, the Commodity Futures Trading Commission approved amendments to Regulation 1.31, which contains the recordkeeping requirements under the Commodity Exchange Act and CFTC regulations. The final rule adopts the amendments as proposed with a few exceptions. The proposed amendments are discussed in the January 13 edition of the Corporate & Financial Weekly Digest.… Continue Reading

CFTC Seeks Comment on CME Petition for Order Permitting Commingling of Funds

Posted in CFTC
The Chicago Mercantile Exchange, Inc. (CME) has submitted to the Commodity Futures Trading Commission a petition for an order pursuant to Section 4d of the Commodity Exchange Act (CEA) whereby CME and its clearing members that are registered futures commission merchants would be permitted to hold, in accounts segregated in accordance with Section 4d of… Continue Reading

CFTC Proposes To Amend Recordkeeping Requirements

Posted in CFTC
On January 12, the Commodity Futures Trading Commission approved for publication in the Federal Register proposed amendments to Regulation 1.31, which contains the recordkeeping requirements under the Commodity Exchange Act and CFTC regulations. The CFTC proposes to eliminate certain outdated terms and provisions, add new definitions, and update language to reflect advances in information technology.… Continue Reading

CFTC Grants CME Clearing Europe Registration as a Derivatives Clearing Organization

Posted in CFTC, Derivatives
On November 29, the Commodity Futures Trading Commission approved the CME Clearing Europe (CMECE) registration as a derivatives clearing organization (DCO) under the Commodity Exchange Act. As a registered DCO, CMECE may provide clearing services with respect to 1) swaps, subject to certain requirements; and 2) futures and options on futures contracts traded on or… Continue Reading

CFTC Exempts Certain Southwest Power Pool Transactions

Posted in CFTC
On October 18, the Commodity Futures Trading Commission approved a final order exempting certain transactions of Southwest Power Pool, Inc. (SPP) from the Commodity Exchange Act (CEA) and CFTC regulations. SPP is a Regional Transmission Organization (RTO) regulated by the Federal Energy Regulatory Commission.… Continue Reading

CFTC Proposes Amendments to Whistleblower Awards Process

Posted in CFTC
On August 30, the Commodity Futures Trading Commission published in the Federal Register proposed amendments to its whistleblower awards process (17 CFR Part 165). The proposed amendments are designed to clarify the process for reviewing whistleblower claims and to reinterpret the CFTC’s authority as it relates to retaliation against whistleblowers.… Continue Reading

CFTC Grants SEF Registration Status to Seed SEF LLC

Posted in CFTC, Derivatives
On August 23, the Commodity Futures Trading Commission issued an Order of Registration granting Seed SEF LLC (Seed) full registration status as a Swap Execution Facility (SEF). Upon reviewing Seed’s application, the CFTC determined that Seed is in compliance with the Commodity Exchange Act (CEA) and CFTC regulations applicable to SEFs. As a registered SEF,… Continue Reading

CFTC Seeks Comment With Respect to ICE Futures US Rule Amendment Certification

Posted in CFTC
On June 14, the Commodity Futures Trading Commission (CFTC) announced that it had advised ICE Futures US (IFUS) that IFUS’s amendment to its Block Trade FAQ, which IFUS had previously self-certified to the CFTC pursuant to CFTC Regulation 40.6, would be stayed for a period of 90 days pending further review. The CFTC had determined… Continue Reading

CFTC Requests Comment on Proposal To Exempt Federal Reserve Banks From Sections 4d and 22 of the CEA

Posted in CFTC, Derivatives
On June 2, the Commodity Futures Trading Commission proposed to exempt Federal Reserve Banks that provide customer accounts to systematically important derivatives clearing organizations (SIDCOs) from Sections 4d and 22 of the Commodity Exchange Act (CEA). As a result, Federal Reserve Banks would be permitted to hold cash, securities and property deposited into a customer… Continue Reading

CFTC Proposes to Amend RTO-ISO Order

Posted in CFTC
The Commodity Futures Trading Commission has proposed to amend its order exempting specified electric energy-related transactions administered by regional transmission organizations (RTOs) and independent system operators (ISOs) from certain provisions of the Commodity Exchange Act (CEA). As set forth in the order, these transactions currently are exempt from all provisions of the CEA with the… Continue Reading

CFTC Approves Final Rule Providing Alternative to Fingerprinting for Foreign Natural Persons

Posted in CFTC
The Commodity Futures Trading Commission has adopted an amendment to Regulation 3.21 to provide an exemption for certain foreign natural persons from the general requirement that an applicant for registration with the CFTC as a principal or associated person of a registrant, or as a floor broker or floor trader, submit a fingerprint card with… Continue Reading

CFTC Approves Derivative Clearing Organization Registration Order for Eurex Clearing AG

Posted in CFTC, Derivatives
On February 1, the Commodity Futures Trading Commission issued an order granting Eurex Clearing AG registration as a derivatives clearing organization (DCO) under the Commodity Exchange Act (CEA). The order will allow Eurex Clearing to provide clearing services, in its capacity as a registered DCO, for swaps for (1) US persons clearing for their own… Continue Reading

CFTC Launches Whistleblower Program’s Website

Posted in CFTC
On January 21, the Commodity Futures Trading Commission launched its Whistleblower Program’s new website, www.whistleblower.gov. The new website has a user-friendly interface to help educate the public regarding the Whistleblower Program, including whistleblower rights and protections, the process for filing a tip and applying for an award. Users also can submit tips on potential Commodity… Continue Reading

CFTC Issues No-Action Relief From the Swap Clearing Requirements for Small Bank Holding Companies, Small Savings and Loan Holding Companies, and Certain Community Development Financial Institutions

Posted in CFTC, Derivatives, Dodd-Frank Developments
On January 8, the Division of Clearing and Risk (Division) of the Commodity Futures Trading Commission issued no-action relief from the swap clearing requirements of Section 2(h)(1)(A) of the Commodity Exchange Act to certain bank holding companies (BCHs), savings and loan holding companies (SLHCs), and Community Development Financial Institutions (CDFIs).… Continue Reading

Congress Provides Swap Clearing and Margin Exemption for Central Treasury Units

Posted in Derivatives, Dodd-Frank Developments
Section 705 of the Consolidated Appropriations Act, 2016, that was signed by President Obama on December 18, 2015, amends Section 2(h)(7)(D) of the Commodity Exchange Act and the equivalent provision in the Securities Exchange Act of 1934 that provide exemptions from swap clearing for certain affiliates of a non-financial corporation. The amendment deletes the “acting as… Continue Reading

CFTC Amends Recordkeeping Rules

Posted in CFTC, Derivatives, Dodd-Frank Developments
The Commodity Futures Trading Commission has amended Regulation 1.35(a) to ease recordkeeping obligations for certain entities with respect to commodity interest transactions and related cash or forward transactions. Specifically, members of a designated contract market (DCM) or a swap execution facility (SEF) that are not registered with the CFTC in any capacity are no longer… Continue Reading

CFTC Issues Guidance on “Firm or Forced Trades” Process

Posted in CFTC, Derivatives
The Commodity Futures Trading Commission’s Division of Clearing and Risk and Division of Market Oversight have issued guidance to derivatives clearing organizations (DCOs) that use a “firm or forced trades” process to determine the price of swaps for which public market prices are not available. Specifically, the guidance confirms that a DCO is not required… Continue Reading