Requests for Comment

Public comment sought on requirement submissions for swap clearing. The CFTC requested public comment on submissions it has received over the past several years from seven registered derivatives clearing organizations pursuant to Section 2(h)(2)(B) of the Commodity Exchange Act and CFTC Regulation 39.5(b). The comment period will be open until July 25, 2016. (6/23/2016)

No-Action Letters

CFTC staff recommends granting of no-action relief to CME from requirements of CFTC Regulations 1.20(g), 22.5, and 1.49(d)(3). The Chicago Mercantile Exchange Inc. sought to maintain accounts at the Bank of Canada (BoC) in which CME would hold customer funds. For these accounts, the CME is required to obtain an acknowledgment letter from the BoC. However, the BoC proposed to execute with CME a Template Acknowledgment Letter modified in certain respects relative to the operations of a central bank. CFTC staff stated that it will not recommend that the CFTC take enforcement action against CME for executing a BoC Acknowledgment Letter in place of a Template Acknowledgement Letter. CFTC staff also granted an exemption to the CME from the requirements of Regulation 1.49(d)(3)(i) as to CME’s holding of customer funds in the BoC, which is not a qualified depository for customer funds under the regulation. (6/21/2016)

Other Developments

Staff advisory reminds registrants of compliance requirements regarding suspicious activity reporting and economic sanctions programs. The Division of Swap Dealer and Intermediary Oversight issued a Staff Advisory to remind futures commission merchants and introducing brokers of their compliance obligations to report suspicious activities to the Financial Crimes Enforcement Network. The Advisory also reminds all CFTC registrants of their compliance obligations regarding economic sanctions programs against countries and groups of individuals administered by the Office of Foreign Assets Control. (7/6/2016)

Amendments to swap data recordkeeping, reporting requirements for cleared swaps adopted. The CFTC adopted final regulations, effective July 27, 2016 (except for the removal of Section 45.4(b)(2)(ii), which is effective June 27, 2016), regarding swap data reporting in connection with cleared swaps for swap data repositories, derivatives clearing organizations, designated contract markets, swap execution facilities, swap dealers (SDs), major swap participants (MSPs), and swap counterparties who are neither SDs nor MSPs. These revisions clarify regulations to clearly delineate the swap data reporting requirements associated with each of the swaps involved in a cleared swap transaction. In addition, these revisions leave the choice of SDR for each swap in a cleared swap transaction to the entity submitting the first report on such swap. (6/27/2016)

Rule governing the adjustment of civil monetary penalties for inflation is amended. The CFTC amended its rule that governs the maximum amount of civil monetary penalties, to adjust for inflation. This interim final rule, which becomes effective on August 1, 2016, sets forth the maximum, inflation adjusted dollar amount for civil monetary penalties assessable for violations of the CEA and CFTC rules, regulations and orders. The amended rule implements the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. (6/27/2016)