On November 2, the Commodity Futures Trading Commission (CFTC) approved a final rule exempting swaps entered into by certain financial institutions from the CFTC’s swap-clearing requirement under the Commodity Exchange Act (CEA). The exemption applies to swaps entered into by certain central banks, sovereign entities, international financial institutions, bank holding companies, savings and loan holding companies and community development financial institutions. Release.
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.
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.
On October 13, 2017, the U.S. Commodity Futures Trading Commission (“CFTC“) announced determinations by the CFTC and the European Commission (“EC“) on comparability and equivalence of margin requirements for uncleared swaps. CFTC Commissioners unanimously approved a comparability determination finding the margin requirements for uncleared swaps under the laws and regulations of the European Union (“EU“) comparable in outcome to those under the Commodity Exchange Act (CEA) and CFTC regulations. This determination is effective immediately. This announcement coincides with the EC’s announcement of an equivalence decision which similarly finds that the CFTC’s uncleared swap margin rules are comparable in outcome to the EU’s corresponding margin requirements for uncleared OTC derivatives. Additionally, the CFTC and EC announced a common approach regarding certain CFTC and EU authorized derivatives trading venues. Press Release. Rule. Common Approach.
On October 11, 2016, the U.S. Commodity Futures Trading Commission (“CFTC“) unanimously approved proposed rules relating to the application of certain swap provisions of the Commodity Exchange Act (CEA) and CTFC to cross-border transactions. The proposed rules address, among other things, key terms for cross-border transactions, registration thresholds and external business conduct standards. The comment period ends 60 days after publication of the proposal in the Federal Register. Press Release.
On August 8, 2016, the U.S. Commodity Futures Trading Commission (CFTC) announced three separate enhancements relating to the protection of customer funds. The new protections address the exemption of certain Federal Reserve Banks from liability under the Commodity Exchange Act, as well as the use of money market funds by derivatives clearing organizations and futures commission merchants. Press Release.
On April 4, 2016, the U.S. Commodity Futures Trading Commission (the “CFTC”) approved guidance relating to the appropriate treatment of certain electric power and natural gas contracts. The guidance provides that certain capacity contracts in electric power markets and certain natural gas contracts should not be considered “swaps” under the Commodity Exchange Act. Release.
On August 18, CFTC issued an order of exemption from registration as a derivative clearing organization (DCO) to ASX Clear (Futures) Pty Limited (ASX). The order is the first of its kind issued by CFTC based on its authority under Section 5b(h) of the Commodity Exchange Act. The provision permits CFTC to exempt a clearing organization from DCO registration if it determines that such organization is subject to comparable and comprehensive supervision by appropriate government authorities in the organization’s home country. Press Release.
On November 26, the CFTC issued a time-limited no-action letter that provides relief to swap dealers registered with the CFTC that are established under the laws of jurisdictions other than the United States from certain transaction-level requirements under the Commodity Exchange Act. Press Release. No-Action Letter.
On November 28, the CFTC Division of Clearing and Risk issued time-limited no-action letters granting relief from required clearing under Section 2(h)(1)(A) of the Commodity Exchange Act and the newly adopted Part 50 regulations for (i) certain swaps entered into by qualifying cooperatives and (ii) certain swaps entered into by qualifying affiliated counterparties. The no-action relief provided by each letter will remain effective until the earlier of April 1, 2013 or the effective date of final rulemaking regarding the clearing exemptions for cooperatives or affiliated counterparties, respectively. CFTC Release (Cooperatives). CFTC Release (Affiliates). CFTC No Action Letter (Cooperatives). CFTC No Action Letter (Affiliates).
