On April 23, the CFTC issued guidance regarding the calculation of projected operating costs or expenses for the purpose of meeting the financial resource requirements under SEF Core Principle 13 in Section 5h(13) of the Commodity Exchange Act and Commission Regulation 37.1303. Release. CFTC Letter.
CFTC
CFTC Provides Relief in Connection with Erroneous Swap Trades and Swap Trade Confirmations
On April 22, the CFTC issued two no action letters providing relief intended to support the development of swap execution facilities (SEFs) and the trading of swaps on SEFs and designated contract markets (DCMs). The first no action letter provides relief to SEFs and DCMs from regulations to allow for the correction of trades voided as a result of clerical or operational errors or errors discovered after a trade has been cleared. The second no action letter provides relief to SEFs from certain requirements concerning trade confirmations required from SEFs for non-cleared swaps. Release. No Action Letter #1. No Action Letter #2.
CFTC Solicits Public Comment on Swaps-Related Rulemakings in Response to U.S. District Court Order
On March 10, the CFTC issued a request for comment in response to an order issued by the U.S. District Court for the District of Columbia in the matter Securities Industry and Financial Markets Association, et al. v. United States Commodity Futures Trading Commission remanding eight swaps-related rulemakings to the CFTC to address what the court held to be inadequacies in the CFTC’s explanation of its consideration of costs and benefits in those rulemakings, in particular in connection with cross-border activities. Comments must be received on or before May 11, 2015. Release. Request for Comment.
CFTC Reopens Comment Periods
On February 24, the CFTC submitted for publication in the Federal Register a notice reopening the comment periods for the two Position Limit rulemakings, in anticipation of questions and comments that may arise from the Commission’s Energy and Environmental Markets Advisory Committee meeting. Release.
CFTC Issues No-Action Relief to Certain Introducing Brokers
On January 23, 2015 the CFTC Division of Swap Dealer and Intermediary Oversight issued no-action relief to certain introducing brokers (IBs) with respect to net capital and financial reporting requirements under Commission Regulations 1.10 and 1.17, respectively. The conditioned relief permits foreign-domiciled IBs to file audited and unaudited form 1-FR-IBs, as applicable, using local accounting principles in effect where the IB is domiciled in lieu of U.S. Generally Accepted Accounting Principles or International Financial Reporting Standards. In addition, eligible foreign-domiciled IBs will not be required to apply certain foreign currency capital charges under Regulation 1.17 and staff guidance. Release.
CFTC Provides Relief from the Clearing Requirement for Swaps Entered into by Eligible Treasury Affiliates
On November 26, CFTC issued a no-action letter providing additional relief for eligible treasury affiliates that enter into swaps that are subject to the clearing requirement in section 2(h)(1) of the Commodity Exchange Act (CEA) and part 50 of the CFTC’s regulations. The no-action letter modifies relief that was previously issued for treasury affiliates on June 4, 2013 in CFTC No-Action Letter 13-22. “Eligible treasury affiliates” are entities that are wholly-owned by a non-financial parent company, and are “financial entities” under section 2(h)(7)(C)(i)(VIII) of the CEA because of the activities undertaken on behalf of its non-financial affiliates. Among other changes, the no-action letter modifies the rules placed upon operations between a treasury affiliate and its affiliates and removes restrictions as to the number of financial affiliates that may be within a corporate group. Release. Letter.
CFTC Launches National Campaign to Protect Consumers
On November 19, the CFTC launched CFTC SmartCheck, a new national campaign to help investors identify and protect themselves against financial fraud. The comprehensive campaign includes a new website, a national advertising campaign and interactive videos that will help investors spot investment offers that are potentially fraudulent. Release. Website.
CFTC Staff Announces Self-Executing Registration No-Action Relief for Delegating CPOs
On October 15, CFTC Division of Swap Dealer and Intermediary Oversight (DSIO) announced that it is providing self-executing registration no-action relief for certain commodity pool operators (CPOs) who delegate certain activities (Delegating CPOs) to a registered CPO and meet the conditions specified. The relief was made available in CFTC Staff Letter 14-126. Release. Staff Letter.
CFTC Proposes Margin Requirements for Uncleared Swaps
On September 17, the CFTC approved a proposed rule addressing margin requirements for uncleared swaps entered into by swap dealers or major swap participants that are not subject to regulation by the Federal Reserve Board, the OCC, the FDIC, the FCA or the FHFA. Press Release. Fact Sheet.
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 Release. Fact Sheet.