The CFTC’s DSIO has issued clarification as to notification and reporting requirements with respect to margin in uncleared swaps. Regulation 23.701 imposes an annual obligation to notify counterparties of their right to elect segregation of initial margin. Regulation 23.704 stipulates quarterly reports of any compliance breaches with respect to omnibus (non-segregated) accounts. The guidance in […]

The House Agriculture Committee has approved H.R. 4413, the Customer Protection and End-User Relief Act, bipartisan legislation to reauthorise the CFTC and fine-tune its procedures; the Act has been passed to Congress for full debate. The CFTC’s 2008 authority expired on 30th September 2013, the resulting authority-gap does not seem to be cause for concern. […]

CFTC Commissioner Scott O’Malia gave a speech late last week at the workshop on the Financialisation of Commodity Markets. The Republican Commissioner recast a number of his favourite bêtes noires with a commodity-specific slant, his argument separates into thee main strands: The Present Commodity markets are highly volatile, legitimate hedging is an important part of […]

21st March 2014. As previewed in the “path forward“, the CFTC issued a short-term extension to No-action Letter 14-16, exempting EU MTFs from the SEF registration and trade execution mandates[1]. The press release has the catchy title, “CFTC’s Division of Market Oversight Provides Extension of Temporary No-Action Relief with respect to Swaps Trading on Multilateral […]

The CFTC has signed a Memorandum of Cooperation (MOC) with the Financial Services Agency of Japan. The MOC lays out the basis for the exchange of information for the supervision of regulated entities that operate cross-border between Japan and the U.S. The MOC’s scope includes markets and organized trading platforms, central counterparties, trade repositories, and […]

The CFTC’s perennial underfunding problem just got worse. In a largely symbolic move, yesterday the White House proposed a 2015 budget for the agency of $280m., a shortfall of $35m. from its 2014 number. In contrast, the relatively well-funded SEC benefits from a small increase. Commissioner Bart Chilton was the first to respond in a […]

Another week, another volte-face from the CFTC. The agency announced Monday evening that packaged swaps will not be immediately subject to the 15th February[1] SEF mandate. The no-action letter provides relief until 15th May 2014. Packaged swaps are combination swaps, created by the simultaneous execution of multiple legs, such as spread, butterfly and curve trades. […]

The CFTC yesterday announced that it has certified Javelin SEF’s Made Available to Trade Submission (“MAT” Submission) for USD and EUR interest rate swaps.  This is an important milestone for the $400trn swaps market, as it triggers mandatory trading on SEF’s. The MAT certification begins a 30-day countdown, after which the certified swaps must be […]

In a statement that will come as no surprise to even lightly-seasoned CFTC watchers, the agency yesterday issued a time-limited no-action letter with reference to” “non-U.S. SD compliance with Transaction-Level Requirements in certain situations”.  While the CFTC has studiously avoided explicit reference to the controversial Footnote 513, this is a compromise delay to enable swap […]