DSIO

CFTC Issues Advisory Regarding Chief Compliance Officer Annual Report Requirements

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On December 4, the CFTC issued an advisory (Staff Advisory 19-24) providing further guidance on certain requirements applicable to swap dealers, futures commission merchants and major swap participants (collectively, Registrants) in connection with the preparation and submission of chief compliance officer annual compliance reports (CCO Annual Reports) pursuant to CFTC Regulation 3.3. The CFTC had previously issued: (i) a final rule governing CCO Annual Reports in 2012; (ii) a related staff advisory in 2014; (iii) a final rule modifying certain regulations related to the CCO Annual Report requirements in December 2018; and (iv) guidance focused on certain of those requirements in December 2018.

After reviewing CCO Annual Reports submitted for the 2018 fiscal year, the Division of Swap Dealer and Intermediary Oversight (DSIO) of the CFTC issued Staff Advisory 19-24 to provide additional guidance to Registrants regarding the CCO Annual Report requirements. Staff Advisory 19-24 addresses the following areas of the CCO Annual Report: (i) areas for improvement; (ii) financial, managerial, operational, and staffing resources; (iii) material non-compliance issues; (iv) furnishing the annual report and related matters; (v) the certification requirement; (vi) compliance with the Volcker Rule; and (vii) other miscellaneous items. The Advisory also notes that, if a Registrant files a CCO Annual Report that DSIO staff determines is noncompliant, the Registrant may be required to file a corrected CCO Annual Report pursuant to CFTC Regulation 3.3(f)(4). Release.

DSIO Issues Time-Limited, Conditional No-Action Relief for Excluding Certain Loan-Related Swaps from Counting toward the Swap Dealer Registration De Minimis Threshold

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On August 28, 2018, the Division of Swap Dealer and Intermediary Oversight of the Commodity Futures Trading Commission (“DSIO“) announced “conditional, time-limited no-action relief to a banking entity for not counting certain loan-related swaps towards its swap dealer de minimis threshold (under paragraph (4) of the “swap dealer” definition in Regulation 1.3).”  The specific conditions are provided in the letter and apply to specific swaps between “the date of the no-action relief through December 31, 2018.” Press Release.

CFTC Reduces Marketplace Barriers for Global Development Initiatives

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On May 16, 2018, the Commodity Futures Trading Commission’s (“CFTC“) Division of Swap Dealer and Intermediary Oversight (“DSIO“) granted relief to non-U.S. counterparties who enter into swaps with International Financial Institutions (“IFIs“), such as development banks. In the no-action letter, DSIO announced it would not recommend that the Commission take action if non-U.S. persons do not include swaps with IFIs when determining whether such non-U.S. persons meet or exceed agency-prescribed registration thresholds. Release.

CFTC Announces Actions Addressing Application of the Dodd-Frank Act to Cross-Border Transactions

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On August 4, 2016, the U.S. Commodity Futures Trading Commission (CFTC) announced two separate actions relating to the application of the Dodd-Frank Act to cross-border transactions. The CFTC issued a Final Response to District Court Remand Order in Securities Industry and Financial Markets Association, et al. v. United States Commodity Futures Trading Commission that explains the CFTC’s approach to application of swaps regulations internationally. The CFTC’s Divisions of Swap Dealer and Intermediary Oversight (DSIO), Clearing and Risk, and Market Oversight (Divisions) also issued a no-action letter that extends relief to swap dealers registered with the CFTC from certain transaction-level requirements under the Commodity Exchange Act. Press Release.

CFTC Staff Announces Self-Executing Registration No-Action Relief for Delegating CPOs

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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.