CFTC signs MOU with ESMA on recognized central counterparties. The CFTC announced that Chair Timothy Massad signed an MOU with the European Securities and Markets Authority as to cooperation with respect to derivative clearing organizations (DCOs) established in the US that have applied or that may apply to ESMA for recognition as central counterparties. (6/6/2016)
CFTC proposes to exempt some Federal Reserve banks from CEA Sections 4d and 22. The CFTC has proposed to exempt Federal Reserve Banks that provide customer accounts and other services to systemically important DCOs from Sections 4d and 22 of the CEA. Comments must be received by July 5, 2016. (6/2/2016)
DCR issues no-action letter for Shanghai Clearing House. The CFTC’s Division of Clearing and Risk issued a time-limited no-action letter stating that it will not recommend that the CFTC take enforcement action against Shanghai Clearing House (SHCH) for failing to register as a DCO pursuant to the CEA. The no-action relief applies to swaps accepted for clearing by SHCH and subject by the People’s Bank of China to mandatory clearing in the People’s Republic of China, including certain interest rate swaps denominated in renminbi. (5/31/2016) CFTC press release.
DMO is holding a public roundtable on Regulation AT. The Division of Market Oversight announced that it will be holding a public roundtable meeting on Friday, June 10th, at 9:00 a.m. at the CFTC headquarters to discuss certain elements of the CFTC’s notice of proposed rulemaking regarding Regulation Automated Trading, which was published in the Federal Register on December 17, 2015. On June 2nd, the CFTC announced that it will reopen the comment period for Regulation AT as of June 10, 2016, and will close the comment period on June 24, 2016, to accept comments on items in the agenda and that arise during the roundtable. (5/27/2016)
CFTC approves supplement to position limits proposal allowing exchanges to recognize non-enumerated bona fide hedges. The CFTC unanimously voted to issue for public comment a supplement to its December 2013 position limits proposal that will modify procedures proposed for those persons seeking exemptions from speculative position limits for non-enumerated bona fide hedging. (5/26/2016) CFTC press release.
CFTC adopts cross-border margin rule. The CFTC adopted a rule implementing a cross-border approach to its margin requirements for uncleared swaps. The CFTC’s margin rule, which was published in January 2016, applies to CFTC-registered swap dealers and major swap participants for which there is no Prudential Regulator (covered swap entities or CSEs). The final rule, in general, requires CSEs to comply with the CFTC’s margin requirements for all uncleared swaps in cross-border transactions, with a limited exclusion for certain non-US CSEs. The exclusion is not available to non-US CSEs that are consolidated with a US parent. (5/24/2016) CFTC press release. Fact sheet. Chairman Massad statement. Commissioner Bowen concurring statement. Commissioner Giancarlo statement of dissent.