On March 5, the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) issued guidance on two issues that have been identified in connection with the implementation of the framework for margin requirements for non-centrally cleared derivatives previously adopted by the two groups that initially went into effect in 2016.… Continue Reading
On March 5, the National Futures Association (NFA) submitted with the Commodity Futures Trading Commission proposed amendments to NFA Bylaw 301 and Compliance Rule 2-24. The proposed changes to NFA Bylaw 301(l) are intended to specify that any individual applying for approval as a futures commission merchant (FCM), introducing broker (IB), commodity pool operator (CPO)… Continue Reading
The Commodity Futures Trading Commission will hold a meeting on March 7 at 10:00 a.m. ET, which will be open to the public. The meeting will cover the following topics: Amendment to the Comparability Determination for Japan: Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants; Comparability Determination for Australia: Margin Requirements… Continue Reading
On February 12, the Commodity Futures Trading Commission announced 2019 Examination Priorities (the “Examination Priorities”) for registrants of the Division of Market Oversight (DMO), Division of Swap Dealer and Intermediary Oversight (DSIO), and Division of Clearing & Risk (DCR). This marks the first time that the agency has published Examination Priorities for its divisions.… Continue Reading
On December 10, the International Swaps and Derivatives Association (ISDA) introduced its latest market protocol, the 2018 Benchmark Supplement Protocol, which is designed to give market participants an efficient means to incorporate terms from the ISDA Benchmark Supplement into their existing and/or future derivative transactions.… Continue Reading
On December 10, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission for review and approval proposed amendments to various NFA Compliance Rules and four NFA Interpretive Notices to incorporate swaps into these rules and notices. Specifically, the NFA proposal would amend the following Compliance Rules:… Continue Reading
On November 19, the Commodity Futures Trading Commission approved a final rule to amend its margin requirements for uncleared swaps for swap dealers and major swap participants for which there is no prudential regulator (CFTC Margin Rule). As a part of the Project KISS initiative, the amendments were designed to harmonize the CFTC Margin Rule… Continue Reading
On November 5, the Commodity Futures Trading Commission held an open meeting to consider the following matters relating to swaps and swap execution facilities: Final Rule: Amending the De Minimis Exception to the Swap Dealer Definition Proposed Rule: Amendments to Regulations on Swap Execution Facilities and Trade Execution Requirement Request for Comment Regarding the Practice… Continue Reading
On October 31, the Securities and Exchange Commission took an unusual additional step towards implementing its rules for security-based swaps (SBS) by issuing a document entitled “Commission Statement on Certain Provisions of Business Conduct Standards for Security-Based Swap Dealers and Major Security-Based Swap Participants.” The novelty of the Statement is that it amounts to a… Continue Reading
On October 22, the UK Financial Conduct Authority (FCA) published an evaluation paper that considers the impact that bringing seven additional benchmarks into its regulatory and supervisory regime had on the market. The paper evaluates the Benchmarks (Amendment) Instrument 2015 (Benchmarks Instrument), by which the FCA made amendments to the FCA Handbook to reflect the… Continue Reading
On October 11, the Securities and Exchange Commission demonstrated renewed interest in completing the regulatory regime for security-based swaps (SBS) by re-opening the comment periods for a number of SBS rules that were previously proposed but never adopted. Specifically, the SEC is requesting further comment on the following proposals:… Continue Reading
On October 1, Commodity Futures Trading Commission Chairman J. Christopher Giancarlo released a white paper addressing the regulation of cross-border swaps. The white paper, titled “Cross-Border Swaps Regulation Version 2.0: A Risk-Based Approach with Deference to Comparable Non-U.S. Regulation,” sets forth various proposed changes to the CFTC’s current cross-border approach.… Continue Reading
On September 26, the European Securities and Markets Authority (ESMA) published updates to two of its sets of question and answer documents (Q&As): (1) Q&As relating to the implementation of the European Market Infrastructure Regulation (EMIR); and (2) those relating to data reporting under the Markets in Financial Instruments Regulation (MiFIR).… Continue Reading
On September 6, the National Futures Association (NFA) sent a notice to its members with information regarding the Interpretive Notice to NFA Compliance Rule 2-49. NFA Compliance Rule 2-49 requires swap dealers and major swap participants (collectively, SDs) to promptly submit relevant information to the NFA in the form and manner prescribed by NFA. The… Continue Reading
On August 29, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (Division) issued a no-action letter confirming that it will not recommend enforcement action against a futures commission merchant (FCM) if the accountant’s audit opinion included in the FCM’s annual financial report does not include “critical audit matters” (or the absence… Continue Reading
On August 28, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (Division) issued time-limited, no-action relief, permitting certain insured depository institutions (IDIs) from counting certain swaps toward the swap dealer de minimis threshold. Relief was requested after certain IDIs experienced a spike in the demand for interest rate swaps from existing… Continue Reading
On August 21, the Commodity Futures Trading Commission adopted amendments to Rule 3.3, which sets out the duties of a chief compliance officer (CCO) of a futures commission merchant, swap dealer and major swap participant (each, a registrant). The amended rules are designed to simplify a CCO’s duties under the rule and to harmonize further… Continue Reading
On August 23, the Commodity Futures Trading Commission proposed amendments to Rule 50.5 in order to exempt certain bank holding companies, savings and loan holding companies, and community development financial institutions from the clearing requirement for certain swaps. The proposed amendments would codify no-action relief that the Division of Clearing and Risk (DCR) had granted… Continue Reading
On August 8, the Commodity Futures Trading Commission announced that it has proposed rules pursuant to which a clearing organization located outside of the United States may obtain an exemption from registration as a derivatives clearing organization (DCO) in order to provide swaps clearing services to certain US persons. The proposed rules codify the CFTC’s… Continue Reading
On July 31, the Commodity Futures Trading Commission’s Division of Clearing and Risk extended no-action relief to the Shanghai Clearing House (SHCH). Originally set to expire on February 28, 2019, the relief is extended until July 31, 2021. The no-action relief, originally granted in May 2016 and renewed several times, permits SHCH to continue to… Continue Reading
The Commodity Futures Trading Commission KISS initiative has finally produced some substantive results for swap dealers in the form of proposed amendments to Subpart L of the CFTC’s regulations (“Segregation of Assets in Uncleared Swap Transactions”) that were issued for comment on July 24. Subpart L (which encompasses CFTC Regulations 23.700-704) has been problematic for… Continue Reading
On February 20, the Commodity Futures Trading Commission’s Division of Market Oversight (DMO) published Staff Letter 18-03, which extends the time-limited no-action relief provided in Staff Letter 16-85 for entities submitting swaps for clearing by derivatives clearing organizations (DCOs) operating under (1) exemptive orders issued by the CFTC; or (2) no-action relief granted by the… Continue Reading
On February 5, the Prudential Regulators—the five federal banking regulators for swap dealers that are banks—proposed technical amendments to their margin rules for uncleared swaps. The amendments aim to harmonize the definition of Eligible Master Netting Agreement (EMNA) in the margin rules with recent changes made to the definition of “Qualifying Master Netting Agreement” (QMNA)… Continue Reading
On January 3, the Financial Industry Regulatory Authority proposed a rule change to extend the expiration date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps) to February 12, 2019. FINRA Rule 0180 temporarily limits the application of certain FINRA rules with regard to security-based swaps. The rule was originally designed to avoid disruptions… Continue Reading
