Commodity Futures Trading Commission

CFTC Approves Final Swap Dealer Capital Rule

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On July 22, the Commodity Futures Trading Commission (CFTC) approved a final rule regarding new capital and financial reporting requirements for swap dealers and major swap participants that are not subject to supervision by a banking regulator and imposing financial reporting requirements for swap dealers and major swap participants generally. The final rule provides swap dealers and major swap participants three alternative methods to establish and meet minimum capital requirements depending on the characteristics of their business. The final rule also includes: a comprehensive model approval process; accompanying financial reporting, recordkeeping, and notification requirements; and a substituted compliance determination process for those swap dealers that may already be required to maintain capital in accordance with a foreign regulator. Release.

CFTC Approves Final Rule Regarding Registration Requirements for Commodity Pool Operators

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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

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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 and MAS Mutually Recognize Certain Derivatives Trading Venues in the U.S. and Singapore

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On March 13, the Commodity Futures Trading Commission (CFTC) issued an order exempting certain derivatives trading facilities regulated by the Monetary Authority of Singapore (MAS) from the requirement to register with the CFTC as swap execution facilities (SEFs), and MAS announced the issuance of regulations exempting certain derivatives trading venues regulated by the CFTC from the requirement to be a MAS-authorized approved exchange (AE) or recognized market operator (RMO) before establishing or operating an organized market. Press Release. CFTC Order of Exemption. MAS Order of Exemption.

CFTC Approves Exemption from SEF Registration Requirement for Multilateral Trading Facilities and Organized Trading Facilities Authorized Within the EU

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On December 8, 2017, the Commodity Futures Trading Commission (“CFTC“) announced the issuance of an order exempting certain multilateral trading facilities and organized trading facilities authorized within the European Union from the requirement to register with the CFTC as swap execution facilities. The order will become effective on January 3, 2018. Press Release. Order of Exemption.

CFTC Staff Issues Interpretive Guidance Clarifying Commodity Trading Advisor Registration Requirements Resulting from the European Union’s MiFID II Research Compensation Provisions for Investment Managers

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On December 11, 2017, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight issued interpretative guidance providing that a futures commission merchant (“FCM“), swap dealer (“SD“), or introducing broker (“IB“) that receives separate compensation for commodity trading advice is not required to register as a commodity trading advisor, provided that the offered advice is “solely incidental” to the conduct of the FCM’s or SD’s business, or “solely in connection with” the operation of the IB’s business. Press Release. CFTC Staff Letter.

Implementing Decision Adopted Regarding US Trading Venues Under MiFIR

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On December 5, 2017, an Implementing Decision was adopted by the European Commission which recognized certain US trading venues under MiFIR.

The Implementing Decision outlined that the European Commission considers US designated contract markets and swap execution facilities as equivalent to trading venues as defined in the MiFID II Directive.

As well as the decision, which is available here, the European Commission and the Commodity Futures Trading Commission (“CFTC“) issued a joint statement which confirmed the ability of EU counterparties to trade derivative instruments which are subject to EU trading obligations on the markets and facilities referred to above.

The joint statement also outlined that the CFTC have recommended to the European Commission that an order of exemption from SEF registration requirements is authorized in the EU.

The joint statement is available here.

CFTC Staff Grants Time-Limited Extension of Swap Data Reporting Relief for Certain Swap Dealers and Major Swap Participants Established under the Laws of Australia, Canada, the European Union, Japan or Switzerland

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On November 30, 2017, the U.S. Commodity Futures Trading Commission‘s (“CFTC“) Division of Market Oversight announced in a no-action letter that it had extended relief it provided certain CFTC-registered swap dealers (“SD“) and major swap participants (“MSP“) in November 2016.  The no-action letter states that the Division of Market Oversight “will not recommend that the CFTC take an enforcement action against a non-U.S. SD or a non-U.S. MSP established in Australia, Canada, the European Union, Japan or Switzerland, that is not part of an affiliated group in which the ultimate parent entity is a U.S. SD, U.S. MSP, U.S. bank, U.S. financial holding company, or U.S. bank holding company, for failure to comply with the swap data reporting requirements of Part 45 and Part 46 of the CFTC’s regulations (SDR Reporting Rules), with respect to its swaps with non-U.S. counterparties that are not guaranteed affiliates, or conduit affiliates, of a U.S. person.”  The relief provided in the no-action letter is subject to certain terms and conditions as outlined in the letter, and is time-limited.  The Division of Market Oversight does not currently intend to extend the no-action relief beyond December 1, 2020. Release. No-Action Letter.

CFTC Signs Memorandum of Understanding with Two Mexican Authorities to Enhance Supervision of Cross-Border Regulated Entities

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On September 6, 2016, the U.S. Commodity Futures Trading Commission announced that it “signed a Memorandum of Understanding (MOU) with the Comisión Nacional Bancaria y de Valores (CNBV) and the Banco de México (BDM) regarding cooperation and the exchange of information in the supervision and oversight of certain regulated entities that operate on a cross-border basis in the United States and in Mexico.” Press release.

CFTC Seeks Public Comment on Proposed Whistleblower Rule Amendments

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On September 1, 2016, the U.S. Commodity Futures Trading Commission (“CFTC”) announced that it is “requesting public comment on proposed amendments to the Whistleblower Rules found in Part 165 of the CFTC’s regulations.” The amendments would, among other things, “enhance the process for reviewing whistleblower claims and make related changes to clarify staff authority to administer the whistleblower program.” Comments are due on or before September 29, 2016. Press release.