DSIO

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On July 8, the staff of the Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission issued a report containing data and analysis concerning possible exclusions from the calculation of the swap dealer de minimis registration threshold for swaps executed on a regulated exchange and/or cleared by a derivatives clearing organization.
Continue Reading CFTC Report Concerning On-Venue and Cleared Swaps

On June 27, 2019, the Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission issued a no-action relief (No Action Letter) for registered floor traders from compliance with certain conditions of a CFTC regulation related to the de minimis exception to the swap dealer definition.

Under paragraph (6)(iv) of the swap dealer definition in CFTC regulation 1.3, a registered floor trader does not need to consider cleared swaps executed on or subject to the rules of a designated contract market (DCM) or swap execution facility (SEF Cleared Swaps) when determining whether it is a swap dealer, provided certain conditions are satisfied. The No Action Letter clarifies that the exemption is available even if the registered floor trader: (1) enters into swaps other than DCM and SEF Cleared Swaps; and (2) directly, or through an affiliated person, negotiates the terms of those other swaps. The No Action Letter also removes the condition that a registered floor trader must submit periodic risk reports as required by CFTC regulation 23.600(c)(2).Continue Reading CFTC Staff Issues No-Action Relief for Floor Traders Engaged in Swaps Activity

On June 6, the Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission issued no action letter 19-13 to permit swap dealers and their counterparties to make certain changes to current swaps without subjecting the swaps to the CFTC swap margin rule. The need for the relief stems from the anti-avoidance position taken by the CFTC when the swap margin rule was enacted that any change made after the margin rule compliance date applicable to swap dealer and its counterparty to an uncleared swap (a Legacy Swap) in existence on the compliance date will cause the Legacy Swap to be brought into scope for margin.
Continue Reading CFTC Issues Margin Relief for Changes to Legacy Swaps

The Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission has issued no-action relief to swap dealers (SDs) for certain swaps with prime brokerage customers where the customer initiates the swap by executing a trade as agent for the SD on a swap execution facility (SEF).
Continue Reading CFTC Issues No-Action Relief for Prime Brokerage Trading on SEFs

On December 20, the US Commodity Futures Trading Commission’s Division of Clearing and Risk (DCR) and Division of Swap Dealer and Intermediary Oversight (DSIO) issued several staff letters related to Eurex Clearing AG (Eurex) for the purpose of (1) authorizing Eurex to clear and settle swaps on behalf of US persons and (2) facilitating such clearing activities on behalf of cleared swaps customers as defined in Part 22 of the CFTC’s regulations. Set forth below is a description of each letter.
Continue Reading CFTC Issues Staff Letters Related to Eurex Clearing AG

On October 31, the Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission issued Letter No. 18-26 to provide continuing relief to a futures commission merchant (FCM) from certain requirements regarding the holding of customer-owned securities as margin for trading on foreign futures and foreign options markets. This letter supersedes CFTC Letter No. 16-88 and was issued to address certain changes in European law with regard to the clearing of positions of clearing members’ indirect clients.
Continue Reading CFTC Issues No-Action Relief Regarding FCM’s Deposit of Customer-Owned Securities

On May 16, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) provided no-action relief for certain non-US persons from counting swaps with international financial institutions, such as the International Monetary Fund, that are incorporated or based in the United States in determining swap dealer and major swap participant status as specified by the CFTC’s definitions.
Continue Reading CFTC Grants Relief to Certain Non-US Persons in Determining Swap Dealer and Major Swap Participant Status

On March 30, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) issued Letter 18-09, which granted exemptive relief to a commodity pool operator (CPO) of a foreign “Master Fund” and a US “Feeder Fund.” CFTC rules generally require that the financial statements a CPO is required to provide US pool participants, both in periodic reports and the annual report, must be prepared in accordance with US generally accepted accounting principles (US GAAP). However, where the pool is organized under the laws of a foreign jurisdiction, CFTC Rule 4.22(d)(2)(i) authorizes a CPO to compute and present financial statements in accordance with applicable accounting standards in that jurisdiction, including International Financial Reporting Standards (IFRS), subject to the conditions set out in the Rule.
Continue Reading CFTC’s Division of Swap Dealer and Intermediary Oversight Extends Exemptive Relief From CFTC Regulations 4.7 and 4.2 Requirement to Prepare Financial Statements in Accordance With US GAAP

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 endowment fund that includes the funds of multiple organizations affiliated with the university (Affiliated Organizations); and (2) the offering, solicitation and operation of multiple planned giving arrangements for donors to the university, which generally provided for a periodic income stream to identified beneficiaries for a specified period of time before the donation reverted wholly to the university’s benefit (Planned Giving Accounts).
Continue Reading CFTC Provides No-Action Relief From CPO and CTA Registration to a Private University

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 CPO that relies on such rule to distribute quarterly account statements to commodity pool participants within 30 days after the end of each quarter.
Continue Reading CFTC Provides No-Action Relief From Commission Regulation 4.7(b)(2) Reporting Requirements