On July 20, the OCC issued a final rule implementing several provisions of the Dodd-Frank Act, including changes to facilitate the transfer of functions from the OTS, and revisions to the OCC’s rules on preemption and visitorial powers. OCC Release. OCC Final Rule.
Month: July 2011
CFTC Approval of Final Rules under Dodd-Frank Act
On July 7, the CFTC approved five final rules under the Dodd-Frank Act at an open meeting. The CFTC (i) approved the definition of “Agricultural Commodity” for purposes of Commodity Exchange Act; (ii) adopted regulations, pursuant to Title X of the Dodd-Frank Act, requiring CFTC-regulated entities to provide consumers with an opportunity to prohibit affiliates from using certain information to make marketing solicitations, and to develop policies and procedures for the proper disposal of consumer report information; (iii) expanded the scope of Part 160 of its regulations, which requires entities to provide certain privacy protections for consumer financial information, to apply to swap dealers and major swap participants; and (iv) adopted reporting regulations requiring clearing organizations, clearing members and swap dealers to submit routine position reports for physical commodity swaps and swaptions. CFTC Rule on Agricultural Commodity Definition. CFTC Rule on Consumer Information under FCRA. CFTC Rule Expanding Scope of Part 160. CFTC Rule on Physical Commodity Swaps Reporting.
CFTC Anti-Manipulation and Anti-Fraud Final Rules
On July 7, pursuant to Section 753 of the Dodd-Frank Act, the CFTC adopted final rules prohibiting manipulation and fraud in connection with any swap, or a contract of sale of any commodity in interstate commerce, or for future delivery on or subject to the rules of any registered entity. Rule 180.2 makes it unlawful for any person, directly or indirectly, to manipulate or attempt to manipulate the price of such instruments. Rule 180.1 prohibits manipulative or deceptive devices and contrivances, employed intentionally or recklessly, regardless of whether the conduct in question was intended to create or did create an artificial price. The final rules will become effective on August 15. CFTC Fact Sheet. CFTC Final Rules.
CFTC Part 40 Final Rulemaking
On July 19, the CFTC issued final rules to establish a new procedural framework for the submission of new products, rules, and rule amendments by designated contract markets, derivatives clearing organizations, swap execution facilities, and swap data repositories. The final rules also require a systemically important derivatives clearing organization (SIDCO) to provide the CFTC with 60-day advance notice of any proposed change to its rules or procedures that could materially affect the nature or level of risks presented by the SIDCO. The final rules will be effective 60 days after publication in the Federal Register. CFTC Fact Sheet. CFTC Final Rules.
CFTC Proposed Rule on Customer Clearing Restrictions
On July 19, the CFTC proposed a rule preventing swap dealers, major swap participants, and futures commissions merchants from entering into an arrangement with a customer that would disclose the identity of the customer’s original executing counterparty. The proposed rule would also prevent such CFTC registrants from: (i) limiting the number of a customer’s counterparties; (ii) restricting a customer’s position with an individual counterparty; (iii) impairing a customer’s access to execution of a trade on terms that have a reasonable relationship to the best terms available; and (iv) preventing compliance with specified time frames for acceptance of trades into clearing. Comments must be submitted within 60 days of publication in the Federal Register. CFTC Fact Sheet.
CFTC Proposed Rules on Clearing Member Risk Management
On July 19, the CFTC proposed rules concerning clearing member risk management for swap dealers, major swap participants, and futures commissions merchants that are clearing members. Comments must be submitted within 60 days of publication in the Federal Register. CFTC Fact Sheet.
CFTC Final Rule on Review of Swaps for Mandatory Clearing
On July 19, pursuant to Sections 723(a)(3) and 745(b) of the Dodd-Frank Act, the CFTC adopted Regulation 39.5 establishing procedures for: (i) determining the eligibility of a derivatives clearing organization (DCO) to clear swaps; (ii) the submission of swaps by a DCO to the CFTC for a mandatory clearing determination; (iii) CFTC-initiated review of swaps; and (iv) staying a clearing requirement while the clearing of a swap is reviewed. The final rule will be effective 60 days after publication in the Federal Register. CFTC Fact Sheet. CFTC Final Rule.
CFTC Final Rule on Removal of Credit Rating References
On July 19, pursuant to Section 939A of the Dodd-Frank Act, the CFTC adopted a final rule removing references to, and requirements of reliance on, credit ratings in certain CFTC regulations. CFTC Fact Sheet.
FSOC Final Rule on Designation of FMUs as Systemically Important
On July 18, pursuant to Section 804 of the Dodd-Frank Act, the FSOC adopted a final rule establishing criteria for the designation of a financial market utility (FMU) as systemically important. The final rule will be effective 30 days after publication in the Federal Register. FSOC Final Rule.
Allstate Sues Morgan Stanley in New York State Court for Concealing and Misrepresenting Loan Quality in RMBS Pools
On July 5, 2011, Allstate Insurance Co. filed suit against Morgan Stanley in the Supreme Court of New York, alleging that Morgan Stanley committed common law fraud and negligent misrepresentation in connection with the sale of $104 million in RMBS purchased by Allstate. Complaint.