Proposed Rules

Proposed Position Limit Comment Period Reopened

On December 1, the CFTC reopened the comment period for its proposed position limit rulemaking that would establish speculative position limits for 28 exempt and agricultural commodity futures and options contracts. In anticipation of questions and comments that may arise from the Commission’s Agricultural Advisory Committee meeting scheduled for December 9, 2014, the CFTC has reopened the comment period beginning December 9, 2014 and ending January 22, 2015. 79 FR 71973; CFTC Press Release. The Agricultural Advisory Committee meeting will focus on issues related to deliverable supplies of agricultural commodities, as they pertain to position limits, and the agricultural economy. View the meeting agenda here.

Proposed Position Limit Comment Period Reopened

On December 1, the CFTC reopened the comment period for its proposed position limit rulemaking that would establish speculative position limits for 28 exempt and agricultural commodity futures and options contracts. In anticipation of questions and comments that may arise from the Commission’s Agricultural Advisory Committee meeting scheduled for December 9, 2014, the CFTC has reopened the comment period beginning December 9, 2014 and ending January 22, 2015. 79 FR 71973; CFTC Press Release. The Agricultural Advisory Committee meeting will focus on issues related to deliverable supplies of agricultural commodities, as they pertain to position limits, and the agricultural economy. View the meeting agenda here.

Regulatory Relief

Additional Clearing Relief Provided to Eligible Treasury Affiliates

On November 26, the CFTC’s Division of Clearing and Risk issued a no-action letter providing further relief for eligible treasury affiliates that enter into swaps that are subject to the clearing requirement in Section 2(h)(1) of the Commodity Exchange Act and Part 50 of the CFTC’s regulations. The letter provides relief from required clearing for “eligible treasury affiliates” that are wholly-owned by a non-financial parent company, and are “financial entities” under Section 2(h)(7)(C)(i)(VIII) of the Act because of the activities undertaken on behalf of its non-financial affiliates. Among other changes, the letter amends requirements placed upon operations between a treasury affiliate and its affiliates; removes restrictions as to the number of financial affiliates that may be within the corporate group; and allows treasury entities affiliated with nonbank financial companies designated as systemically important by the Financial Stability Oversight Council to elect the relief subject to certain conditions. CFTC Press Release.

Registration Relief Provided to Family Offices

On November 25, the CFTC’s Division of Swap Dealer and Intermediary Oversight issued a no-action letter providing family offices relief from commodity trading advisor registration, in connection with advisory services they provide to family clients. CFTC Press Release.

Swap Data Reporting Relief for Certain Off-Shore SDs and MSPs is Extended

On November 24, the CFTC’s Division of Market Oversight issued a time-limited no-action letter extending certain relief provided to certain Commission-registered swap dealers (“SDs”) and major swap participant (“MSPs”) in CFTC Letter No. 13-75. The new no-action letter states that the Division will not recommend enforcement action against a non-U.S. SD or a non-U.S. MSP established in Australia, Canada, the European Union, Japan and 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 requirements of Part 45 and Part 46 of the Commission’s regulations with respect to its swaps with non-U.S. counterparties that are not guaranteed affiliates, or conduit affiliates, of a U.S. person. CFTC Press Release.

Other Developments

Commissioner Wetjen Addresses FIA Asia Derivatives Conference

On December 4, CFTC Commissioner Mark Wetjen discussed central counterparties, their risk management, recovery, and resolution. He would like to see improved transparency with the use of standardized stress tests; a reassessment of loss mutualization by considering a requirement for CCP capital contributions to the guarantee fund, as well as the appropriate allocation of losses in the default waterfall; and a reevaluation of recovery and wind down plans to insure their effectiveness, including the consideration of whether to prohibit CCPs from allocating losses to customers in their recovery plans. Wetjen Remarks.

Rule Enforcement Review of DCMs

On November 24, the CFTC’s Division of Market Oversight issued three separate rule enforcement reviews of certain Designated Contract Markets (“DCMs”). The Division’s reviews assessed compliance with Commodity Exchange Act Core Principles for DCMs and related regulations with respect to the Chicago Board of Trade and Chicago Mercantile Exchange audit trail program; the New York Mercantile Exchange and Commodity Exchange trade practice surveillance program; and the CBOT, CME, COMEX, and NYMEX disciplinary program. Overall, the Division found the Exchanges’ respective programs to be generally in compliance with the assessed DCM core principles and Commission regulations. However, the Division’s reviews identified certain deficiencies. CFTC Press Release.

NASDAQ Futures Reinstated

On November 21, the CFTC approved the application of NASDAQ Futures, Inc. for reinstatement as a designated contract market. CFTC Press Release.