CFTC Adopts Final Rule on Utility Operations-related Swaps with Utility Special Entities

On September 17, the CFTC approved a final rule on the exclusion of utility operations-related swaps with utility special entities from de minimis threshold for swaps with special entities.  “Special entities” refers to certain federal agencies and states, political subdivisions of states, and certain of their agencies, instrumentalities and pension systems, and certain electric and natural gas utilities.  Press ReleaseFact Sheet.

CFTC and EC Statement on Regulatory Framework

On February 12, the CFTC and the European Commission announced jointly that the two agencies have made significant progress in their collaboration on the regulatory frameworks for CFTC-regulated swap execution facilities (SEFs) and EU-regulated multilateral trading facilities (MTFs).  Joint Release.

Volcker Rule Exclusion for TruPS CDOs

On January 14, the Fed, CFTC, FDIC, OCC and SEC issued an interim final rule which will permit banking entities to retain interests in certain collateralized debt obligations backed primarily by trust preferred securities (TruPS CDOs) if the following conditions are met: (i) the TruPS CDO was established and the interest was issued before May 19, 2010; (ii) the banking entity reasonably believes that the offering proceeds received by the TruPS CDO were invested primarily in Qualifying TruPS Collateral (as defined by the rule); and (iii) the banking entity’s interest in the TruPS CDO was acquired on or before December 10, 2013, the date the agencies issued final rules implementing section 619 of the Dodd-Frank Act (the Volcker Rule).  The agencies also released a non-exclusive list of issuers which meet the requirements of the interim final rule.  Comments must be submitted within 30 days of publication in the Federal Register.  Joint ReleaseJoint Interim Final RuleList of Excluded CDO Issuers.

CFTC Issues No-Action Letter Regarding Introducing Brokers’ Compliance with Certain Financial Reporting

On December 23, CFTC issued a no-action letter that provides relief for certain Introducing Brokers (IBs) from certain financial reporting and capital computation requirements.  Part of the no-action relief is time-limited to newly registered IBs for the fiscal years ending on or before December 31, 2013ReleaseLetter.

CFTC Issues Time-Limited No-Action Letter Relating to Certain CDS Clearing-Related Swaps Executed Pursuant to a CDS Settlement Price Process

On December 31, CFTC issued a no-action letter providing time-limited relief relating to certain occasional, off-facility, cleared credit default swaps (CDSs) that are entered into pursuant to a DCO’s rules related to its price submission process for determining end-of-day settlement prices for cleared CDSs.  ReleaseLetter.

Final Rules Implementing the Volcker Rule

On December 10, the Fed, CFTC, FDIC, OCC and SEC issued final rules to implement Section 619 of the Volcker Rule Act (the Volcker Rule), which prohibit insured depository institutions and banking entities from engaging in short-term proprietary trading of certain securities, derivatives, commodity futures and options for their own account.  Banking organizations covered by the rules will be required to fully conform their activities and investments by July 21, 2015.  Joint ReleaseFinal RulesFact Sheet.