Relief from Ownership and Control Reporting Requirement
On July 23rd, the CFTC’s Division of Market Oversight issued a no-action letter that provides additional time for reporting parties to comply with certain reporting requirements of the ownership and control final rule (“OCR Final Rule”). The OCR Final Rule requires the electronic submission of trader identification and market participant data on new and updated reporting forms. DMO issued the relief to provide market participants additional time to build and test systems for purposes of complying with the electronic reporting and substantive requirements of the OCR Final Rule. CFTC Press Release.
CFTC Completes Rule Enforcement Review of ICE Futures U.S.
On July 22nd, the CFTC announced that the Division of Market Oversight has completed a rule enforcement review of ICE Futures U.S. The Division assessed the Exchange’s compliance with elements of Core Principles 4 and 5, relating to the Exchange’s market surveillance program. The Division found the Exchange has appropriate tools for monitoring daily trading activity and large trader positions. The Exchange also has adequate procedures for monitoring deliverable supply of physical-delivery contracts. Finally, the sanctions for violations related to market surveillance imposed by the Exchange via warning letters and monetary fines are generally reasonable. The Division identified certain areas in which the Exchange needs to make improvements. Those areas include the implementation of tie-breaking procedures for the Exchange’s Regulatory Oversight Committee; if the Exchange intends to sanction misreporting of open interest alongside the Exchange’s clearinghouse (Ice Clear U.S.), the implementation of rules stating that open interest misreporting represents a violation of Exchange rules; the formalization of the role of Exchange staff in enforcing open interest reporting requirements of the clearinghouse; and the resubmission by market participants of detailed information on at least an annual basis to support their hedge exemptions. CFTC Press Release.
Commissioner O’Malia to Leave CFTC for ISDA
On July 21st, Commissioner Scott O’Malia announced he would be resigning from the CFTC, effective August 8, 2014. On July 23rd, the International Swaps and Derivatives Association announced that O’Malia will join the organization as its CEO. ISDA Press Release.