CFTC Updates

The following Final Rule has been published:

  • 78 FR 20788
    Dual and Multiple Associations of Persons Associated With Swap Dealers, Major Swap Participants and Other Commission Registrants17 CFR Parts 3 and 23

CFTC Announces Jonathan L. Marcus as General Counsel

Commodity Futures Trading Commission Chairman Gary Gensler today announced that Jonathan L. Marcus has been named the agency’s General Counsel. Mr. Marcus has served at the Commission for the past two years as the Deputy General Counsel for Litigation.

CFTC Approves Final Regulations Governing Exemption from Required Clearing for Inter-Affiliate Swaps

The Commodity Futures Trading Commission (CFTC) today issued a final rule to exempt swaps between certain affiliated entities within a corporate group from the clearing requirement under section 2(h)(1)(A) of the Commodity Exchange Act (CEA) and Commission regulations, subject to a number of conditions.

CFTC’s Division of Swap Dealer and Intermediary Oversight Issues Time-Limited No-Action Relief to Swap Dealers and Major Swap Participants Regarding Certain Recordkeeping Obligations

The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) issued time-limited no-action relief for swap dealers (SDs) and major swap participants (MSPs) concerning certain recordkeeping obligations under Part 23 of the Commission’s Regulations.

CFTC’s Division of Clearing and Risk Issues Limited No-Action Relief from Required Clearing for Partial Novation and Partial Termination of Certain Swaps

CFTC’s Division of Clearing and Risk Issues Limited No-Action Relief from Required Clearing for Partial Novation and Partial Termination of Certain Swaps

The Commission’s Division of Clearing and Risk (Division) today issued a no-action letter that provides relief from required clearing for a limited set of “stub swaps” that remain after the partial novation or partial termination of an original swap that was not required to be cleared because it was executed prior to an applicable compliance date for required clearing.

CFTC Announces that Mandatory Clearing Begins Today

CFTC Announces that Mandatory Clearing Begins Today

Today, swap dealers, major swap participants and private funds active in the swaps market are required to begin clearing certain index credit default swaps (CDS) and interest rate swaps that they entered into on or after March 11, 2013.

CMC Signs onto Coalition Comment Letter

CMC signed on to this comment letter, along with other allied trade associations. This is a letter to the CFTC requesting exemptive relief from clearing and trading requirements for centralized treasury affiliates of non-financial end users.

Sanjeev Joshipura of the Commodity Markets Council on Dodd-Frank in 2013

Sanjeev Joshipura, President of Commodity Markets Council, talks about how Dodd-Frank rules will impact his membership base.  Joshipura talks with JLN editor-in-chief Jim Kharouf about the future of the controversial position limit rule, which was vacated by a US District Court on September 28, 2012.  A new position limit rule is expected from the CFTC, which will include a cost-benefit analysis.  CMC is also focused on the CFTC’s reauthorization this year and the continuation of EMIR regulations.  Joshipura also talks about US and EU regulatory harmonization and the challenges facing that goal.

CMC Members Discuss Electronic Recording Rule

On CMC’s policy call yesterday, members and staff discussed the salient points of the CFTC’s electronic recording and recordkeeping rule, which is expected to be promulgated in a few weeks.  The rule pertains to futures/swaps transactions and related cash transactions, and applies to all Designated Contract Markets (DCM) members, covering both written and oral communications.  CMC members have strong concerns about the rule, and strategies to educate and advocate the CFTC were discussed.

President’s Anti-Speculation Campaign Draws Skepticism

Under pressure to address high gasoline prices in a politically charged election cycle, President Obama outlined an initiative to strengthen oversight of energy markets.  It is important to note that some of the President’s proposals require significant budget increases – including an additional $52 million in CFTC funding.  To garner such increased appropriations as lawmakers ready for the campaign trail with the budget a hot-button issues seems highly unlikely.

The President plan would:

1)      Increase funding to increase the number of surveillance and enforcement staff charged with oversight of the oil futures market;

2)      Allow the Commodity Futures Trading Commission (CFTC) to upgrade the technology used to monitor the energy markets;

3)      Increase the civil and criminal penalties for those convicted of manipulating the oil futures market;

4)      Provide the CFTC with additional the authority to limit disruptions in the oil market, including allowing the CFTC to direct exchanges to raise margin requirements; and

5)      Expand access to CFTC data so that analysts can better understand trading trends in the oil markets.

CME Group quickly issued a response warning the Administration against “mistakenly categorizing speculation as a form of manipulation.”  Moreover, CME Group defended the exchange’s right to set margins.  “The Administration must recognize that exchanges, as operators of regulated energy markets, are in the best position to monitor volatility and manage margin requirements,” CME Group said.

Potentially noteworthy: In his Rose Garden speech unveiling the initiative President Obama invoked Enron as a cautionary tale.  A day later, CFTC Chairman Gensler also invoked Enron as justification for the swap dealer rule.  Ten years later, Enron continue to have political traction.