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On May 11, the Securities Exchange Commission’s (SEC) Division of Investment Management (IM) staff issued a Public Statement (Statement) strongly encouraging any investor interested in investing in mutual funds exposed to the Bitcoin futures market to carefully consider the risks involved with such investments.
Continue Reading SEC Division of Investment Management Staff Publishes Public Statement on Funds Registered Under Investment Company Act Investing in Bitcoin Futures Market

On April 6, the Commodity Futures Trading Commission’s (CFTC) Office of Customer Education and Outreach (OCEO) issued a Customer Advisory, reminding investors to understand fully how commodity futures markets, physical markets and securities markets differ before engaging in trading activity based on tips or other information communicated through social media.
Continue Reading CFTC Issues Customer Advisory on Trading Based on Information Communicated Online

On July 22, the Commodity Futures Trading Commission adopted rules (Final Rules) that set minimum financial capital requirements for swap dealers (SDs) and major swap participants (MSPs) that are not subject to prudential regulation (each, a “Covered Swap Entity” or CSE). The capital requirements were originally proposed in 2016, as explained in more detail here.

The core financial require
Continue Reading CFTC Adopts Final Capital Requirements for Swap Dealers

On May 28, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission (CFTC) proposed amendments to NFA Interpretive Notice 9045 (Interpretive Notice) regarding the anti-money laundering (AML) Programs that introducing brokers (IBs) (and futures commission merchants) are required to implement.
Continue Reading NFA Proposes Amendments to Interpretive Notice Regarding AML Programs

On May 22, the Commodity Futures Trading Commission issued a Customer Advisory addressing the unique risks associated with certain trading vehicles that use futures contracts or other commodity interests. The CFTC noted that recent market volatility arising from the COVID-19 pandemic has led many investors to purchase shares of trading vehicles that use futures contracts…

The Commodity Futures Trading Commission has issued an order granting registration as a derivatives clearing organization (DCO) to Eris Clearing, LLC. The order permits Eris Clearing to clear fully collateralized virtual currency futures contracts. These contracts will be listed for trading on Eris Clearing’s affiliate, Eris Exchange, LLC.
Continue Reading CFTC Grants DCO Registration to Eris Clearing

On March 27, the Commodity Futures Trading Commission’s Market Intelligence Branch in the Division of Market Oversight (DMO) issued a report analyzing the entering of manual and automatic orders in commodity futures markets in the United States to determine how technological change is affecting futures trading. DMO staff used internal CFTC transactional data for 30 futures contracts during the period January 2013 – December 2018, and examined what effect the order placement mechanism had on the respective transaction.
Continue Reading CFTC Staff Issues Research Report on Impact of Automated Orders in Commodity Futures Markets

On August 14, the Joint Audit Committee (JAC) released Regulatory Alert #18-04. The Alert, which responds to industry requests, clarifies the procedures that a futures commission merchant (FCM) should follow prior to making an intra-day withdrawal from the residual interest amount that the FCM maintains in its segregated, secured 30.7 and cleared swap customer accounts (Accounts) in order to ensure compliance with applicable Commodity Futures Trading Commission regulations.
Continue Reading Joint Audit Committee Publishes Regulatory Alert Regarding Residual Interest Withdrawals