Despite industry hand-wringing and earlier indications of flexibility, the CFTC yesterday signalled that it sees little prospect of relaxing its long-standing proposed margin rules.  Current practice allows a broker to use one client’s excess margin to cover the shortfall in another’s, allowing clients up to three days to meet a margin call. The proposed rule […]

19 July 2013. In a press release typical for its constant reincarnation, the CFTC’s DCR issued it’s fifth extension of “time-limited” relief with respect to swaps clearing by cooperatives. In summary, if one of the counterparties to a swap is a cooperative, whose members (or one of them) are non-financial entities, and the swap is […]

Scott O’Malia, the CFTC’s only Republican Commissioner, launched another articulate attack on Dodd-Frank implementation in his 12th July Dissent from Cross-Border Guidance, as usual his remarks are worth reading in full. He opined that the Guidance: (1) fails to articulate a valid statutory foundation for its overbroad scope and inconsistently applies the statute to different […]

One day before today’s cross-border clarification deadline, the CFTC and the EU announced a breakthrough shared approach, which they are calling the “Common Path Forward”. The package of measures is intended to provide clarity, minimise inter-jurisdictional conflict and reduce the possibility of regulatory arbitrage. Like most newly-engaged couples (shotgun or otherwise), the participants had only […]

5July 2013: the CFTC announced a meeting to finalise controversial cross-border guidance.  The meeting will decide final rules as to Dodd-Frank’s extra-territorial jurisdiction, and will issue a new exemptive order enabling phased-in compliance.  The meeting is scheduled to take place on 12 July 2013, the last day before relief is due to expire. The cross-border […]

Introduction In a letter to the CFTC dated 27 June 2013, a number of market participants highlighted the practical challenge in complying with certain Dodd-Frank External Business Conduct Standards (“EBCS”) in the context of intermediated prime brokerage arrangements relating to (i) non-cleared foreign exchange swaps, and (ii) physically-settled foreign exchange forwards and swap agreements that […]

An interesting article in the New York Times which highlights the increasing tension within the CFTC as the 12 July deadline for the application of the cross-border rules under the Dodd-Frank Act looms.  The suggestion is that a deal will be struck at the eleventh hour, but there is precious little evidence of that at […]

Friday 28 June 2013. In a wholly unexpected move, the CFTC issued another two no-action letters.  A brief summary follows: Time-limited relief for SD/MSP’s with respect to the portfolio reconciliation requirements of regulation § 23.502. This blanket relief is of short duration, expiring on 23 August 2013; Time-limited relief with respect to reporting obligations under […]

On 26 June 2013, the CFTC issued four no-action letters, bringing the total for 2013 to 29.  Affecting substantive documentation/reporting issues for SD/MSP’s, a brief summary follows: Extension of time-limited relief for SD/MSP’s obligation under § 45.4(b)(2)(ii) to report valuation data for cleared swaps. The relief expires on 30th June 2014. Limited relief from the […]