Proposed Rules

Residual interest deadline for FCMs. The CFTC proposed revisions to the Residual Interest Deadline in Commission Rule 1.22. The amendment would remove the December 31, 2018 termination date for the phased-in compliance schedule for futures commission merchants (FCMs) and provide assurance that the Residual Interest Deadline would only be revised through a separate Commission rulemaking. Comments should be submitted within 60 days after publication in the Federal Register. (11/3/2014) Amendments. 

Records of commodity interest and related cash or forward transactions. The CFTC proposed amendments to Commission Rule 1.35(a) to: (i) provide that all records required to be maintained under this regulation be searchable; (ii) clarify that all records be kept in a form and manner that allows for identification of a particular transaction, except that records of oral and written communications leading to the execution of a transaction in a commodity interest and related cash or forward transactions are not required to be kept in a form and manner that allows for identification of a particular transaction; (iii) exclude unregistered members of designated contract markets and swap execution facilities from the requirements to retain text messages and to maintain records in a particular form and manner; and (iv) exclude commodity trading advisors from the oral recordkeeping requirement. Comments should be submitted within 60 days after publication in the Federal Register. Amendments. 

Forward contracts with embedded volumetric optionality. The CFTC announced it will publish for comment a proposal that would clarify its interpretation concerning forward contracts with embedded volumetric optionality. (11/3/2014) Fact sheet. 

Auditor disqualification rules. The CFTC published proposed amendments to the rules governing when it may bar an accountant from appearing or practicing before it. Comments should be submitted by November 24, 2014. (10/23/2014) 79 FR 63343. 


Requirements for uncleared swap transactions. The Division of Swap Dealer and Intermediary Oversight issued interpretive guidance as to the applicability of certain provisions of Commission Regulations 23.701 and 23.704, which impose notification and reporting requirements on swap dealers and major swap participants with respect to margin posted by their counterparties in uncleared swap transactions. (10/31/2014) CFTC press release. 

Customer margin deposits. The Division of Swap Dealer and Intermediary Oversight issued interpretive guidance on when a futures commission merchant (FCM) may credit a customer’s trading account for a margin payment upon the FCM’s initiation of a withdrawal from the customer’s bank account using the Automated Clearing House payment processing system. (10/23/2014) CFTC press release. 

Regulatory Relief

Phased compliance timeline for trade execution requirement. The Division of Market Oversight extended previously issued no-action relief for certain swaps required to be traded on a swap execution facility (SEF) or designated contract market (DCM) to the extent that those swaps were part of a package transaction. The extended tailored relief provides market participants with the opportunity to transition their trading of these swap components onto SEFs and DCMs over a phased compliance timeline. (11/10/2014) CFTC press release. 

Inter-affiliate swaps. Previously-issued no-action relief for certain inter-affiliate swaps transaction has been extended to the end of the year by the Divisions of Clearing and Risk and Market Oversight. The relief permits Eligible Affiliate Counterparties to continue to use the alternative compliance framework for certain outward-facing swaps and provides relief from the trade execution requirements to Eligible Affiliate Counterparties. (11/7/2014) CFTC press release. 

Southwest Airlines obtains reporting relief. The Division of Market Oversight has granted Southwest Airlines and its counterparties additional time to comply with the reporting obligation in Section 43.3(a), in the context of transactions in long-dated Brent and WTI crude oil swaps and swaptions. (11/6/2014) CFTC press release. 

Regulation 1.57(a)(1). Relief from Regulation 1.57(a)(1)’s requirement that a guaranteed introducing broker open and carry each customer account solely with its guarantor futures commission merchant on a fully-disclosed basis has been issued by the Division of Swap Dealer and Intermediary Oversight. (10/31/2014)CFTC Letter No. 14-133. 

Political events contract market approved. The Division of Market Oversight granted Victoria University of Wellington, New Zealand relief to operate a not-for-profit market for event contracts, and to offer event contracts to US persons, without registration. The University’s proposed market for event contracts consists of submarkets for binary contracts concerning political elections and economic indicators, is operated for academic research purposes only, and its operators, who are faculty at the University, receive no separate compensation. (10/29/2014)CFTC press release. 

Time for FCM submission of acknowledgement letters extended. The Division of Swap Dealer and Intermediary Oversight extended to December 31, 2014 the time in which futures commission merchants must comply with CFTC regulations requiring FCMs to obtain acknowledgement letters from certain depositories. (10/16/2014) CFTC press release. 

Self-executing registration relief for delegating CPOs. The Division of Swap Dealer and Intermediary Oversight provided self-executing registration relief for commodity pool operators who delegate certain activities to a registered CPO and meet certain conditions. (10/15/2014) CFTC press release. 

Other Developments

OTC derivatives regulators report to G20. The Over-the-Counter (OTC) Derivatives Regulators Group (ODRG) issued a report updating the G20 Leaders regarding the ODRG’s efforts to identify and resolve cross-border issues associated with the implementation of the G20 OTC derivatives reform agenda. (11/7/2014) CFTC press release. 

Rule enforcement fees. The fees designated contract markets and registered futures associations must pay to the CFTC for its oversight of self-regulatory organization rule enforcement programs have been published. The fees must be paid by December 16, 2014. (10/17/2014) 79 FR 62418.