CFTC Proposes Rules For Future Commission Merchants and Derivative Clearing Organizations
On Tuesday, October 23, 2012, the Commodity Futures Trading
Commission (the "CFTC") proposed new regulations and
amendments to existing regulations pursuant to Sections 4d(a)(2)
and Section 4d(f) of the Commodity Exchange Act (the
"CEA"), as amended by Section 724(a) of the Dodd-Frank
Wall Street Reform and Consumer Protection Act (the
"Dodd-Frank Act"). The proposed regulations and
amendments require enhanced customer protections, risk management
programs, internal monitoring and controls, capital and liquidity
standards, customer disclosures, and auditing and examination
programs for futures commission merchants. The proposal also
addresses certain related issues concerning the role of derivatives
clearing organizations and the duties of chief compliance
officers.
Read the CFTC press release
CFTC Adjusts the Maximum Civil Monetary Penalties for Inflation
On Thursday, October 25, 2012, the CFTC amended its rule that
governs the maximum amount of civil monetary penalties, to adjust
for inflation. This rule, adopted pursuant to Section 6(c) of the
CEA, as amended by Section 753(b) of the Dodd-Frank Act, sets forth
the maximum, inflation-adjusted dollar amount for civil monetary
penalties assessable for violations of the CEA and CFTC rules,
regulations, and orders thereunder. These amendments are adopted
pursuant to the Federal Civil Penalties Inflation Adjustment Act of
1990, as amended by the Debt Collection Improvement Act of
1996.
Read the CFTC rule
CFTC Announces Temporary No-Action Relief from Certain Recordkeeping Obligations of Swap Dealers and Major Swap Participants
On Friday, October 26, 2012, the CFTC announced the issuance of
time-limited no-action relief for swap dealers ("SDs")
and major swap participants ("MSPs") concerning certain
recordkeeping obligations under Part 23 of the CFTC's
Regulations adopted pursuant to Sections 4s(f) and 4s(g) of the
CEA, as amended by Section 731 of the Dodd-Frank Act.
The no-action letter will delay until March 31, 2013, the
compliance date for the following provisions:
- The requirement that SDs and MSPs make and keep records of all oral communications related to pre-execution swap trade information (and communications that lead to the conclusion of a related cash or forward transaction), pursuant to CFTC Regulations 23.202(a) and (b);
- The requirement that SDs and MSPs maintain all transaction records and daily trading records in a manner "identifiable and searchable" by transaction and counterparty, pursuant to CFTC Regulations 23.201(a)(1), 23.202(a) and 23.202(b);
- The requirement that SDs and MSPs use a Coordinated Universal Time timestamp when recording quotations prior to and at the time of execution of a swap, pursuant to CFTC Regulations 23.202(a)(1)(ii), (a)(2)(iv), (b)(3) and (b)(4); and
- The requirement that SDs and MSPs retain swap records at their principal places of business or such other principal offices as designated by the SDs or MSPs.
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