On April 22, the Commodity Futures Trading Commission’s Division of Data, Division of Market Oversight and Division of Clearing and Risk (collectively, the Divisions) issued CFTC Letter No. 21-11, which (1) provides no-action relief to KalshiEX LLC (Kalshi), a designated contract market, and LedgerX, LLC (LedgerX), a derivatives clearing organization, from reporting to swap data repositories data for binary option transactions executed on or subject to the rules of Kalshi and cleared by LedgerX; and (2) exempts Kalshi and LedgerX from certain related recordkeeping requirements.
Continue Reading CFTC Issues Conditional Relief From Reporting Fully Collateralized Binary Option Data to Swap Data Repositories
Commodity Futures Trading Commission Division of Clearing and Risk
CFTC Staff Issues Guidance Regarding Risk Assessment of Customer Accounts for Futures Commission Merchants
On March 29, the Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission issued guidance regarding the implementation of revised Regulation 39.13(g)(8)(ii). Regulation 39.13(g)(8)(ii) provides that a derivatives clearing organization (DCO) must require its clearing members to collect from their customers initial margin at a level that is at least equal to the DCO’s own initial margin requirements with respect to each product and portfolio and commensurate with the risk presented by each customer account. The regulation further requires that a DCO must set both (1) a baseline level of initial margin (“clearing initial margin”), which serves as the minimum amount its clearing members must in turn collect from their customers; and (2) an increased level of initial margin (“customer initial margin”) for categories of customers determined by a clearing member to have a “heightened risk profile.”
Continue Reading CFTC Staff Issues Guidance Regarding Risk Assessment of Customer Accounts for Futures Commission Merchants
CFTC Grants No-Action Relief From Certain Swap Clearing Requirements for Swaps With Eligible Affiliate Counterparties in Australia or Mexico
On December 15, the Commodity Futures Trading Commission Division of Clearing and Risk granted US swap participants temporary no-action relief from the required clearing rule with respect to swaps entered into with eligible affiliate counterparties located in Australia and Mexico. The no-action relief will expire on December 31, 2017.
Continue Reading CFTC Grants No-Action Relief From Certain Swap Clearing Requirements for Swaps With Eligible Affiliate Counterparties in Australia or Mexico