Requests for Comment
Reopened Comment Period on Position Limit Rulemakings
On January 5th, the Commodity Futures Trading Commission (“CFTC”) made clear that those wishing to submit comments during the reopened comment periods for the two position limit rulemakings may do so with respect to the questions raised at the December 9, 2014 Agricultural Advisory Committee public meeting, the agenda issues, and the associated agenda materials. Comments should be submitted on or before January 22, 2015. 80 FR 200.
Bitcoin Trader Applies for Registration
On December 15th, the CFTC requested comment on LedgerX, LLC’s applications for registration as a derivatives clearing organization and registration as a swap execution facility. LedgerX plans to list and clear fully collateralized, physically settled options on bitcoin. Comments should be submitted on or before January 30, 2015. CFTC Press Release.
CCO Reporting Relief
On January 6th, the CFTC’s Division of Swap Dealer and Intermediary Oversight made public the November 25, 2014 relief provided to a provisionally registered swap dealer. The conditional relief permits the firm to: maintain a limited reporting line for the chief compliance officer (“CCO”) to the “governing body” established pursuant to Regulation 23.600, undertake CCO consultations required under Regulation 3.3 with the governing body instead of the board of directors or senior officer; and have the CCO meet with the governing body at least annually and at the election of the CCO, rather than with the board of directors or senior officer. CFTC Press Release.
Depository Acknowledgement Letter Relief Extended
On December 29th, the CFTC’s Division of Swap Dealer and Intermediary Oversight extended to April 30, 2015, previously issued noaction relief which provides additional time for futures commission merchants (“FCMs”) to comply with regulations requiring FCMs to obtain acknowledgement letters from certain depositories. CFTC Letter No. 14157.
Eurex Clearing’s Registration Relief Extended
On December 23rd, the CFTC’s Division of Clearing and Risk extended to September 30, 2015, the previously issued noaction relief granted to Eurex Clearing AG and its U.S. clearing members. The Division will not recommend enforcement action against Eurex Clearing, an applicant for registration as a derivatives clearing organization (“DCO”), for failure to register as a DCO. Nor will enforcement action be recommended against Eurex Clearing’s U.S. clearing members for failure to clear certain interest rate swaps that are required to be cleared under Section 2(h)(1)(A) of the Commodity Exchange Act through a registered or exempt DCO. CFTC Letter No. 14156.
Guidance and Relief for CCO Annual Reports
On December 22nd, the CFTC’s Division of Swap Dealer and Intermediary Oversight issued a staff advisory that provides guidance for chief compliance officers (“CCO”) of futures commission merchants, swap dealers and major swap participants to comply with the requirement to prepare an annual report on the state of the registrant’s compliance program under Commission Regulation 3.3(e). DSIO also issued timelimited noaction relief to certain registrants concerning the timing of the filing of the CCO annual report. Regulation 3.3(f) requires the CCO annual report to be furnished to the Commission within 60 days after the end of the registrant’s fiscal year. The noaction relief grants registrants that have a fiscal year ending on or before January 31, 2015 an additional 30 days to furnish the annual reports. CFTC Press Release.
Japan Securities Clearing’s Registration Relief Extended
On December 22nd, the CFTC’s Division of Clearing and Risk extended to December 31, 2015, the previously issued noaction relief granted to Japan Securities Clearing Corporation and its qualifying clearing participants and affiliates. The Division will not recommend enforcement action against JSCC, an applicant for registration as a derivatives clearing organization (“DCO”), for failure to register as a DCO. Nor will enforcement action be recommended against any qualified clearing participant of JSCC, or a parent or affiliate of a JSCC qualified clearing participant, for failure to clear a Japanese yendenominated interest rate swap that is required to be cleared under Section 2(h)(1)(A) of the Commodity Exchange through a registered or exempt DCO. CFTC Letter No. 14155.
Registration Relief for ILS Issuers
On December 19th, the CFTC’s Division of Swap Dealer and Intermediary Oversight issued a letter providing no action relief to entities operating issuers of insurancelinked securities (“ILS Issuer”). The operator of an ILS Issuer that meets the conditions outlined in the letter will be exempt from commodity pool operator registration with respect to the issuance of insurancelinked securities. CFTC Press Release.
DCO Registration Relief
On December 18th, the CFTC’s Division of Clearing and Risk extended previously issued noaction relief to four foreign clearing organizations: ASX Clear (Futures) Pty Limited, Clearing Corporation of India Ltd., Korea Exchange, Inc., and OTC Clearing Hong Kong Limited. Provided that certain requirements are met, DCR will not recommend enforcement action against the firms for failing to register as a derivatives clearing organization. CFTC Press Release.
Relief from Oral Communications Recording Requirement
On December 16th, the CFTC’s Division of Swap Dealer and Intermediary Oversight and Division of Market Oversight issued a noaction letter extending and expanding previously issued relief from certain recordkeeping requirements under CFTC Regulation 1.35(a). The letter provides that commodity trading advisors that are registered with the CFTC and are members of designated contract markets or of swap execution facilities will not be required to record oral communications. The letter also provides that market participants covered by the rule will not be required to link records of oral and written communications that lead to the execution of a transaction in a commodity interest and related cash or forward transactions with any particular transaction. The noaction relief is effective immediately and will expire on the earlier of December 31, 2015, or the effective date of any CFTC action with respect to the CFTC’s recent proposal to amend Regulation 1.35(a). CFTC Press Release.
Volcker Rule Guidance
On December 23rd, the CFTC’s Division of Swap Dealer and Intermediary Oversight provided guidance on how to protect confidential, proprietary information which must be reported in accordance with Section 619 of the DoddFrank Act, the “Volcker rule”.
Report on Clearing Mandate for Forex NonDeliverable Forwards
On December 22nd, the CFTC’s Subcommittee on Foreign Exchange Markets submitted a report to the Global Markets Advisory Committee regarding a prospective clearing mandate for foreign exchange nondeliverable forwards (“NDFs”). The Subcommittee recommended that if the CFTC proceeds with a clearing mandate for NDFs, such mandate should contain a clear timeline and method of implementation. CFTC Press Release.