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
As contemplated by announcements last month, the European Commission (EC) and the Commodity Futures Trading Commission (CFTC) took action this week to implement mutual recognition of derivatives trading venues in advance of the January 3, 2018 compliance date for the Markets in Financial Instruments Directive (MiFID II) requirement that the most liquid derivative instruments that… Continue Reading
On November 7, the Commodity Futures Trading Commission’s (CFTC) Division of Clearing and Risk (DCR) published Staff Letters 17-57, 17-58 and 17-59 (Staff Letters), which provided Banco Centroamericano de Integración Económica, the European Stability Mechanism, and the North American Development Bank, respectively, with no-action relief from the swap clearing requirements set forth in Section 2(h)(1)… Continue Reading
On September 1, the Board of Governors of the Federal Reserve System adopted a final rule that will affect the rights of counterparties that enter into Qualified Financial Contracts (QFC) (e.g., derivatives, stock loans and repurchase agreements) with banks that have been designated as global systemically important banking organizations (GSIBs). This rule, which was proposed… Continue Reading
On March 24, the Commodity Futures Trading Commission’s Division of Market Oversight extended no-action relief relating to the recordkeeping and confirmation requirements in CFTC Regulations 37.6(b), 37.1000, 37.1001, 45.2, and 45.3(a). This relief applies only to uncleared swap transactions executed on or pursuant to the rules of a Swap Execution Facility (SEF) and is subject to… Continue Reading
On August 16, the Commodity Futures Trading Commission published in the Federal Register its final response to the order of the US District Court for the District of Columbia in SIFMA v. CFTC, which remanded eight swaps-related rulemakings for new cost-benefit analysis.… Continue Reading
The bankruptcy court overseeing the Lehman Brothers chapter 11 cases rejected efforts by Lehman Brothers Special Financing Inc. (LBSF) to recover roughly $1 billion in payments made to numerous noteholder defendants from the liquidation of collateral originally pledged to secure both obligations under notes issued by special purpose entities and credit default swap (CDS) obligations… Continue Reading
On June 14, 2016, the Commodity Futures Trading Commission announced the approval of amendments to Part 45 of the CFTC’s regulations, which pertain to the reporting and recordkeeping obligations involved in cleared swaps transactions. The amendments seek to clarify certain aspects of the existing Part 45 rules, including the roles of registered entities and swap… Continue Reading
On January 15, the Commodity Futures Trading Commission’s Division of Market Oversight (DMO) issued CFTC letter 16-03 (“Letter”) providing a conditional, time-limited extension of the relief provided in CFTC Letter 13-41, issued on June 28, 2013, regarding the masking of certain identifying information required to be reported in connection with swaps required to be reported… Continue Reading
