CFTC

CFTC Approves Proposed Amendments to Margin Requirements for Swap Dealers and Major Swap Participants

 

On August 14, the Commodity Futures Trading Commission (CFTC) approved two proposed amendments to margin requirements for Swap Dealers and Major Swap Participants (the “CFTC Margin Rule”). The first proposal would, among other changes, revise the method for determining whether an entity comes within the scope of the initial margin requirements under the CFTC Margin Rule and the timing for compliance. The second proposal would permit the application of separate minimum transfer amounts for initial and variation margin, as well as a minimum transfer amount of up to $50,000 for separately managed accounts. Each proposal will be subject to a 30-day comment period following publication in the Federal Register. Release.

Regulatory Agencies Finalize Changes to Covered Fund Provisions of the Volcker Rule

 

On July 31, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FRB), the U.S. CFTC, the Federal Deposit Insurance Corporation (FDIC), and the U.S. Securities and Exchange Commission (SEC) published a final rule amending the regulations that implement Section 13 of the Bank Holding Company Act (the “BHC Act”), commonly known as the Volcker Rule. The final rule, which goes into effect on October 1, is intended to improve and streamline the covered fund provisions of Section 13 of the BHC Act. The final rule aims to accomplish this by, among other things, permitting the following activities: qualifying foreign excluded funds; revising the exclusions from the definition of “covered fund” for foreign public funds, loan securitizations, public welfare investments, and small business investment companies; creating new exclusions from the definition of covered fund for credit funds, qualifying venture capital funds, family wealth management vehicles, and customer facilitation vehicles; modifying the definition of “ownership interest”; and providing that certain investments made in parallel with a covered fund, as well as certain restricted profit interests held by an employee or director, need not be included in a banking entity’s calculation of its ownership interest in the covered fund. OCC Bulletin. Federal Register Final Rule.

CFTC Approves Final Rule Regarding Registration Requirements for Commodity Pool Operators

 

On June 4, the Commodity Futures Trading Commission (CFTC) finalized a rule to prohibit certain commodity pool operators from relying on the registration exemptions found in Regulation 4.13 in Title 17 of the Code of Federal Regulations (“Regulation 4.13”). The final rule generally prohibits persons who have, or whose principals have, any of the disqualifying factors listed in Section 8a (2) of the Commodity Exchange Act from claiming one of the exemptions to the commodity-pool-operator registration requirements set forth in Regulation 4.13. Release.

CFTC: Interim Final Rule – Uncleared Swaps Margin – Proposed Rule: CPO Registration Exemption

 

On May 28, the Commodity Futures Trading Commission (CFTC) approved an interim rule to grant an extension of the compliance schedule for initial margin requirements for uncleared swaps in response to operational challenges certain entities are facing due to the COVID-19 pandemic. The CFTC also approved a proposed rule that amends regulation 3.10(c)(3), which provides an exemption from registration as a CPO for certain persons located outside the U.S. who are operating offshore commodity pools that are neither offered nor sold to U.S. participants. Release.

CFTC Unanimously Passes Final Rule Affecting Formulation, Amendment or Repeal of Commission’s Rules and Regulations

 

On December 10, the U.S. Commodity Futures Trading Commission (CFTC) approved a final rule eliminating the provisions of the Commission’s Regulations that established the formulation, amendment or repeal of its rules or regulations. The CFTC unanimously passed the final rule, with rule makers stating these provisions were unnecessary because the CFTC’s rulemaking process is governed by the Administrative Procedure Act. Rule.

Agencies Publish Rule Excluding Community Banks from Volcker Rule

 

On July 9, the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board, the Commodity Futures Trading Commission (CFTC), the Office of the Comptroller of the Currency (OCC) and the Securities and Exchange Commission (SEC) adopted a final rule that excludes community banks from the Volcker Rule, which restricts banking entities from engaging in proprietary trading and from owning, sponsoring or having certain relationships with hedge funds or private equity funds. Under the final rule that was adopted, community banks with $10 billion or less in total consolidated assets, and which have total trading assets and liabilities that are 5% or less than such community bank’s total consolidated assets, will be excluded from the Volcker Rule.

 

CFTC Publishes First Enforcement Manual

 

On May 8, the Division of Enforcement (DOE) of the Commodity Futures Trading Commission (CFTC) published its first Enforcement Manual. The Enforcement Manual establishes certain general policies and procedures to guide the work of the DOE in pursing violations of the Commodity Exchange Act (CEA) and CFTC regulations, and will serve as a general reference for DOE staff in the investigation and prosecution of potential violations of the CEA and CFTC regulations.

CFTC Approves a Final Rule Revising Privacy Notice Requirements

 

On April 19, the Commodity Futures Trading Commission (CFTC) approved a final rule to revise an existing CFTC regulation that currently requires certain merchants and dealers, among other persons, to provide annual privacy notices to customers. The new rule will remove this requirement to provide annual privacy notices when certain conditions are met. Release.

CFTC Approves Comparability Determination for Japan’s Uncleared Swap Margin Rules

 

On March 26, the CFTC approved an amended comparability determination that would extend the substituted compliance permitted for Japan’s margin requirements for uncleared swaps with respect to the scope of entities subject to the margin requirements and the treatment of inter-affiliate transactions. Release. Comparability Determination.