On May 3, the Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission (CFTC) published Staff Letter No. 21-13 (Staff Letter), providing CX Clearinghouse, L.P. (CX) with no-action relief from specified Part 39 regulations applicable to derivatives clearing organizations (DCO).
Continue Reading CFTC Issues No-Action Response Letter Providing Relief to DCO From Complying With Specified Part 39 Regulatory Requirements
CFTC Renews No-Action Relief for Entities Submitting Swaps for Clearing With DCOs Acting Under Exemptive Orders or No-Action Relief
On April 28, the Division of Data of the Commodity Futures Trading Commission issued a renewal of the temporary no-action relief available to entities (Relief Counterparties) that submit certain swaps for clearing by derivatives clearing organizations that operate pursuant to CFTC exemptive orders or staff no-action letters (Relief DCOs). CFTC Letter No. 21-12 extends relief…
CFTC Issues Conditional Relief From Reporting Fully Collateralized Binary Option Data to Swap Data Repositories
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
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.”
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CFTC Provides Relief to DCOs from New Daily Reporting Requirements
The Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission (CFTC) has issued no-action relief to derivatives clearing organizations (DCOs) from the CFTC’s recently adopted daily reporting requirements.
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CFTC Unanimously Approves Final Rule for Granting Exemptions From DCO Registration
On November 18, the Commodity Futures Trading Commission unanimously approved a final rule (Final Rule) establishing a framework for the CFTC to grant a clearing organization organized outside of the US an exemption from registration as a derivatives clearing organization (DCO) to permit the clearing organization to clear swaps transactions on behalf of certain US persons. Subject to the terms and conditions set out in the Final Rule, the CFTC may grant an exemption from registration if: (1) the CFTC determines that the clearing organization is subject to comparable, comprehensive supervision and regulation by its home country authorities; and (2) the clearing organization agrees that its clearing services on behalf of US persons will be limited to:
Continue Reading CFTC Unanimously Approves Final Rule for Granting Exemptions From DCO Registration
CFTC Staff Issues Advisory on Virtual Currency for Futures Commission Merchants
On October 21, the Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission issued an advisory to futures commission merchants (FCMs) regarding the holding of virtual currency in segregated accounts. The advisory, Letter No. 20-34, provides guidance to FCMs on how to hold and report certain deposited virtual currency from customers in connection with physically delivered futures contracts or swaps and how to maintain appropriate risk management programs concerning the acceptance of virtual currencies as customer funds.
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CFTC Staff Provides Reporting Relief for Swaps Related to Certain Upcoming DCO Auctions
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…
CFTC Staff Issue Supplemental Advisory and Time-Limited No-Action Relief on Treatment of Separate Accounts by FCMs
On September 15, the staff of the Commodity Futures Trading Commission’s (CFTC) Division of Clearing and Risk (DCR) and Division of Swap Dealer and Intermediary Oversight (DSIO) issued CFTC Letter No. 20-28, providing supplemental guidance and further no-action relief with respect to the treatment of separate accounts by futures commission merchants (FCMs). Initial guidance and relief was set out in CFTC Letter No. 19-17, which was issued in July 2019.
Continue Reading CFTC Staff Issue Supplemental Advisory and Time-Limited No-Action Relief on Treatment of Separate Accounts by FCMs
CFTC to Hold an Open Commission Meeting on September 17
The Commodity Futures Trading Commission will hold an open meeting on September 17, from 10:00 a.m. to 3:00 p.m. ET, to consider adopting several final rules, including with respect to:
- registration with alternative compliance for non-US derivative clearing organizations;
- amendments to real-time public reporting requirements under the CFTC’s Part 43 rules;
- amendments to swap data recordkeeping and reporting requirements under the CFTC’s Part 45 rules; and
- amendments to the CFTC’s regulations relating to certain swap data repository and data reporting requirements.
Continue Reading CFTC to Hold an Open Commission Meeting on September 17