CFTC Guidance on Commodity Pool Registration Exclusion

On October 11, the CFTC issued a “no-action” letter to ASF and SIFMA with respect to the funds being treated as commodity pool under CFTC regulations and the Commodities Exchange Act. The letter indicates that (i) certain securitization vehicles should not be included within the definition of “commodity pool” and (ii) operators of those vehicles should not be included within the definition of “commodity pool operator” . The letter includes a set of criteria which, if satisfied, would result in CFTC staff not considering a vehicle a commodity pool. CFTC Letter.

FDIC, Fed, and OCC Rules for Large Bank Stress Tests

On October 9, the FDIC, Fed, and OCC published final rules, required by section 165(i) of the Dodd-Frank Act, for annual company-run stress testing by covered institutions with total consolidated assets greater than $10 billion. The final rule requires institutions with assets greater than $50 billion to begin annual stress testing this year. The rule delays implementation for covered institutions with total consolidated assets between $10 billion and $50 billion until October 2013. The FDIC also approved a final rule that refines the deposit insurance assessment system for insured depository institutions with more than $10 billion in assets. The final rule amends the definitions used to identify concentrations in higher-risk assets to better reflect the risk posed to institutions and the FDIC. FDIC Release. Fed Release. OCC Release.

FHFA Releases Strategic Plan for 2013 – 2017

On October 9, the FHFA released “Preparing a Foundation for a More Efficient and Effective Housing Finance System”, an updated strategic plan for 2013 – 2017. The four strategic goals of the plan are: (i) safe and sound housing government-sponsored enterprises; (ii) stability, liquidity, and access in housing finance; (iii) to preserve and conserve Fannie Mae and Freddie Mac assets; and (iv) to prepare for the future of housing finance in the U.S. FHFA Release.

SEC Proposed Rule on Principal Trades with Advisory Clients

On October 9, the SEC proposed an amendment to rule 206(3)-3T under the Investment Advisers Act of 1940, a temporary rule that establishes an alternative means for investment advisers registered with the SEC as broker-dealers to meet the requirements of section 206(3) of the Act when they act in a principal capacity in transactions with certain of their advisory clients. Comments must be received within 30 days after publication in the Federal Register. SEC Proposed Rule.

OCC Final Rule on Short-Term Investment Funds

On October 9, the OCC published a final rule that revises the requirements on U.S. banks and federal branches of foreign banks pursuant to 12 CFR 9.18(b)(4)(ii)(B), the short-term investment fund rule. Under the final rule, a short-term investment fund must: (i) operate with a primary objective to maintain a stable NAV of $1.00 per participating interest; (ii) have a dollar-weighted average portfolio maturity of 60 days; (iii) have a dollar-weighted average portfolio life maturity of 120 days; (iv) adopt portfolio and issuer qualitative standards and concentration restrictions and standards to address contingency funding needs; (v) adopt shadow pricing procedures and calculate the difference on at least a weekly basis; (vi) adopt procedures for stress testing the fund’s ability to maintain a stable NAV and report adverse stress testing results to the managing bank’s senior risk management; (vii) provide monthly disclosures to fund plan participants and the OCC; (viii) adopt procedures that require a bank that administers a fund to notify the OCC before or within one business day after the occurrence of one or more of six specific events; (ix) use mark-to-market value accounting instead of amortized cost accounting if the market value of the portfolio falls below a NAV of $0.995 per participating interest; and (x) adopt procedures to take certain actions if a bank suspends or limits withdrawals and initiates liquidation of the fund as a result of redemptions. The final rule will be effective on July 1, 2013. OCC Release.

CFTC Responds to Cleared Swap Reporting Questions

On October 11, the CFTC responded to questions on the reporting of cleared swaps as required under part 45 of the CFTC’s regulations. CFTC Release.

CFTC Response to Swap Data Reporting Questions

On October 10, the CFTC responded to questions on the timing of when counterparties will be required to report swap pricing and transaction data as required under part 45 of the CFTC’s regulations. CFTC Release.