Commodity Futures Trading Commission

CFTC Issues No-Action Letter to Swap Dealers to Extend Collateral Rule Deadline due to Limitations with Custodial Accounts

Posted on

 

On September 1, 2016, the U.S. Commodity Futures Trading Commission’s (“CFTC”) Division of Swap Dealer and Intermediary Oversight announced that it “issued a time-limited, no-action letter stating that it will not recommend an enforcement action against a swap dealer subject to the September 1, 2016 compliance date for the CFTC’s uncleared swap margin rules, subject to certain conditions, for failing to fully comply with the custodial arrangement requirements of CFTC regulation 23.157 prior to October 3, 2016.” Press release.

CFTC Extends Comment Period on Proposed Amendments to Regulation 4.22 Regarding CPO Annual Reports

Posted on

 

On August 30, 2016, the Commodity Futures Trading Commission extended the comment period for proposed amendments to a regulation regarding Annual Reports from commodity pool operators. Press release.

CFTC Requests Public Comment on a Rule Amendment Certification Filing by ICE Futures U.S.

Posted on

The U.S. Commodity Futures Trading Commission (CFTC) seeks comments from the public on a proposed amendment that “would clarify that parties to a block trade may engage in pre-hedging or anticipatory hedging of the position that they believe in good faith will result from the consummation of the block trade, except for an intermediary that takes the opposite side of its own customer order.” Release.

CFTC Approves Final Rule to Amend Swap Data Recordkeeping and Reporting Requirements for Cleared Swaps

Posted on

The U.S. Commodity Futures Trading Commission (CFTC) issued a final rule that clarified reporting obligations for completed swap transactions, such as providing additional instruction relating to who must report the various aspects of the transaction. Release.

CFTC Extends No-Action Relief to SEFs and DCMs from Certain CFTC Regulations for Correction of Errors

Posted on

The U.S. Commodity Futures Trading Commission (CFTC) extended the relief contained in CFTC Letter No. 15-24 that allowed swap execution facilities and designated contract markets to correct certain errors that would lead to a swap being rejected and considered void. Release.

New FAQ’s Regarding the Scope and Implementation of the Volcker Rule Issued by the U.S. Banking, Securities and Commodities Regulatory Agencies

Posted on

On February 27, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and the Commodity Futures Trading Commission issued a new set of frequently asked questions and responses regarding the scope and implementation of Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly referred to as the “Volcker Rule.”  Among the issues addressed are:

  • Loan Securitization Servicing Assets:  Are the “rights or other assets” described in § 44.10(c)(8)(i)(B) of the Volcker Rule (“servicing assets”) limited to “permitted securities,” or can other assets be servicing assets for purposes of the loan securitization exclusion?
  • Mortgage-Backed Securities of Government-Sponsored Enterprise:  How are certain mortgage-backed securities issuers sponsored by government-sponsored enterprises treated under the final rule’s covered funds provisions?
  • Covered Fund Exemption; Marketing Restriction on Foreign Banking Organization:  The Volcker Rule provides an exemption for certain covered fund activities conducted by foreign banking entities (known as the “SOTUS Covered Fund Exemption”) provided that, among other conditions, “no ownership interest in such hedge fund or private equity fund is offered for sale or sold to a resident of the United States” (the “marketing restriction”).  Does the marketing restriction apply only to the activities of a foreign banking entity that is seeking to rely on the SOTUS covered fund exemption or does it apply more generally to the activities of any person offering for sale or selling ownership interests in the covered fund?
  • Conformance Period:  How do the requirements of the Volcker Rule apply to a banking entity during the conformance period? For instance, must a banking entity deduct its investment in a covered fund from its tier 1 capital prior to the end of the conformance period?
  • Foreign Public Fund Seeding Vehicles:  The Volcker Rule excludes from the definition of covered fund a registered investment company and business development company, including an entity that is formed and operated pursuant to a written plan to become one of these entities.  Would an entity that is formed and operated pursuant to a written plan to become a foreign public fund receive the same treatment?

Link to the website of the Office of the Comptroller of the Currency that sets forth the FAQ’s.

ESMA Finalises Cooperation Agreements for Alternative Investment Funds

Posted on

On July 18, the European Securities and Markets Association (ESMA) published a press release stating that it has approved seven Memoranda of Understanding (MoUs) between EU securities regulators and non-EU authorities granting responsibility for the supervision of alternative investment funds (AIFs).  The MoUs are applicable from July 22 and will enable cross-border marketing of AIFs to professional investors between jurisdictions.

ESMA’s Board of Supervisors approved MoUs with authorities from the Bahamas, Japan, Malaysia, Mexico and the United States, including the Commodity Futures Trading Commission.  ESMA has now negotiated 38 MoUs on behalf of the 31 EU/EEA authorities.

The Alternative Investment Fund Managers Directive (AIFMD) requires that MoUs are entered into between the EU and non-EU authorities. MoUs allow alternative investment fund managers (AIFMs) from non-EU countries access to EU markets or to perform fund management by delegation from EU AIFMs.  The MoUs cover non-EU AIFMs that market AIFs in the EU and EU AIFMs that manage or market AIFs outside the EU.  The MoUs also cover cooperation in the cross-border supervision of depositaries and AIFMs’ delegates.  Press Release.  Memoranda of Understanding.

European Commission and CFTC Reach Agreement on “Common Path Forward”

Posted on

On July 11, the European Commission (EC) issued a memorandum announcing its agreement with the United States Commodity Futures Trading Commission (CFTC) relating to their joint understanding on a package of measures for regulating cross-border derivatives.

The agreement acknowledges that as the derivatives market is international, notwithstanding the high degree of similarity between the two jurisdictions’ respective requirements, subjecting the global market to “simultaneous application of each other’s requirements” could lead to “conflicts of law, inconsistencies and legal uncertainty.”

The agreement confirms that the CFTC plans to use non-action relief from certain transaction-based requirements in relation to bilateral uncleared swaps.  If the CFTC’s trade execution requirement is triggered before March 15, 2004, then the CFTC has agreed to extend appropriate time-limited transitional relief to some EU multilateral trading facilities.  The CFTC is also considering extending regulatory relief to trading platforms if they are subject to requirements comparable to those imposed on swap execution facilities.

The EC, CFTC and the European Securities and Markets Authority will continue to work together on further issues including harmonised international rules on margins for uncleared swaps and issues relating to reporting to trade repositories (e.g. data fields, blocking and secrecy laws).  CFTC Press Release.  European Commission Memorandum.