Tag Archives: Dodd Frank Reforms

CFTC Enforcement Division Drops “Absent Objection” Investigatory Orders

By Patricia Dondanville, James A. Rolfes, and Sarah R. Wolff In a reversal of course, the Division of Enforcement of the Commodities Futures Trading Commission ("CFTC"), has confirmed that it will no longer pursue omnibus orders of investigation by means of an "absent objection" procedure, and instead will seek Commission approval before extending such orders.  In … Continue Reading

Breaking- CFTC Staff Offers Relief from Reporting and SEF Rulebook Enforcement Obligations In a Series of Letters

By Andrew Cross and Tom Watterson Last night the CFTC Division of Market Oversight (“DMO”) released CFTC Letters 13-55, 13-56, and 13-57. CFTC Letters 13-56 and 13-57 are particularly relevant for market participants other than SEFs. CFTC Letter 13-55 provides no-action relief to the SEFs for compliance with the Part 43 reporting obligations and the … Continue Reading

ISDA Publishes EMIR Top-Up Protocol (The “DF Protocol Extension”): Dodd-Frank Protocol can now be linked to EMIR Protocol

Earlier this week, the International Swaps and Derivatives Association published the “ISDA DF Protocol Extension”.  As described by ISDA, the newly-published document allows market participants who have already adhered to the ISDA March 2013 DF Protocol (commonly referred to as “DF Protocol 2.0”) to facilitate compliance with the portfolio reconciliation and dispute resolution requirements under EMIR without adhering … Continue Reading

Op-Ed: Now Is the Time to Defer the June 10th Central Clearing Deadline

June 10th marks the day on which many "Category 2 Entities" will be required to centrally clear certain credit default index and interest rate swaps.  Unlike the Category 1 implementation date – which only involved swap dealers with the operational infrastructure required to process cleared swaps –  the June 10th implementation date will affect thousands upon … Continue Reading

A Practical Guide to Lender Compliance with Eligible Contract Participant (ECP) Requirements

By David Surbeck, Reed Smith LLP In the attached piece, David Surbeck of Reed Smith LLP offers practical insights about the documentation of eligible contract participant (ECP) provisions in the context of single bank loan and syndicated agent lending transactions.  You may access this article by clicking the following link: Download file This article makes reference … Continue Reading

CFTC Open Meeting Scheduled for 5/16 at 9:30 a.m. Eastern: Block Sizes, Made Available to Trade, SEFs and Anti-disruptive Trading Practices

The proposed agenda covers: Minimum Block Sizes for Swaps; The "Made Available to Trade" Rule Under section 2(h)(8) of the Commodity Exchange Act and Swap Transaction Compliance and Implementation Schedule; Core Principles for Swap Execution Facilities (SEFs); and Anti-disruptive Practices Authority – Interpretive Guidance and Policy Statement. You can obtain information about participation by clicking here. Good day. Good … Continue Reading

A Practical Guide to the Eligible Contract Participant (ECP) Definition: A Q&A for Banks and Borrowers

 By Andrew Cross, Crystal Travanti and Tom Watterson of Reed Smith LLP We have prepared the above-referenced guide to the eligible contract participant ("ECP") definition under section 1a(18) of the Commodity Exchange Act ("CEA").  The guide does not cover every aspect of the ECP definition, but rather focuses on the application of the so-called "entity" … Continue Reading

CFTC Letter 13-09: Relief from Reporting Requirements for Intra-Group Swaps

By Andrew Cross and Crystal Travanti OVERVIEW The CFTC recently issued no-action relief from certain swap data reporting requirements for swaps entered into between affiliated counterparties.  The relief is conditioned upon several factors, which we have summarized in greater detail in the table below.  In general, Letter 13-09 grants relief from: historical swap reporting (Part 46); … Continue Reading

Breaking – CFTC Offers Non-Swap Dealers (Some) Relief From (Some) Swap Reporting Requirements: The “Who, What, When, Where, Why” of CFTC Letter 13-10

INTRODUCTION The CFTC just released (less than 7 hours before the deadline) CFTC Letter No. 13-10 providing no action relief from the reporting requirements of Parts 43, 45, and 46 for non-swap dealer, non-major swap participant counterparties. By our count, there are now nine different reporting deadlines. As an introductory item, non-swap dealer banks or other … Continue Reading

Getting Ready for Dodd-Frank: A Checklist for Non-Swap Dealers and Non-Major Swap Participants

Checklist: Non-Swap Dealers / Non-MSPs Getting Ready For Dodd-Frank WHAT TO DO WHEN Obtain your LEI / CICI by going to www.ciciutility.org and following applicable instructions By April 10, 2013 Report all swaps for which you are the reporting counterparty, as required by Parts 43, 45 and 46 of the CFTC Rules Beginning on April 10, 2013 Maintain all records … Continue Reading

Derivatives Update: Dodd-Frank Protocol 2.0 Now Open & Update on Treasury Market Practices Group Forward MBS Recommendation

A few updates of note: 1) Dodd-Frank Protocol 2.0 Open – As of March 22nd, Dodd-Frank Protocol 2.0 is open for adherence.  More information is available here. 2) Further Guidance Issued by TMPG on Initiative to Margin Forward Agency MBS – On March 27th, the Treasury Market Practices Group of the New York Fed issued additional … Continue Reading

A Swap Guarantor Must Be An ECP: CFTC OGC Letter No. 12-17

Section 2(e) of the Commodity Exchange Act requires every swap counterparty to be an eligible contract participant ("ECP").  In CFTC OGC Letter No. 12-17, the CFTC Office of General Counsel stated that it interprets section 2(e) to require each guarantor of a swap to be an ECP.  In other words, as a general rule, a non-ECP can … Continue Reading

DOL Advisory Opinion 2013-01A: Cleared Swaps Under ERISA – Margin Not a Plan Asset / CCPs & FCMs Are Not Fiduciaries / No Prohibited Transactions (By Andrew P. Cross and Allison W. Sizemore)

By Andrew P. Cross and Allison W. Sizemore, Reed Smith LLP This posting summarizes Advisory Opinion 2013-01A, which was issued by the U.S. Department of Labor in February 2013 in order to address key interpretive issues relating to the ability of pension plans to trade centrally cleared swaps.  This posting will be of interest to pension … Continue Reading

Changes to Permitted Repo Investments for FCMs Authored by Todd Zerega and Tom Watterson

  The CFTC is proposing changes to its rules to enhance the protection of customer funds held by Futures Commission Merchants ("FCMs").  The proposal seeks, among numerous other changes, to amend CFTC Rule 1.25, which governs the permitted investments an FCM may make with customer funds. Under the current Rule 1.25, FCMs must limit reverse … Continue Reading

OCC Defers Implementation of Swap-Push Out Rule Until July 2015

On January 3, 2013, the Office of Comptroller of Currency ("OCC"), Department of Treasury published a notice of guidance to insured Federal depository institutions that are or may become swap dealers (the "Guidance"). As explained below, the effect of the Guidance will be to delay implementation of the so-called "swap push-out" rule from July 16, 2013 to … Continue Reading

The Inaugural List of Provisionally Registered Swap Dealers

On January 2nd, the CFTC published the first-ever list of swap dealers – 65 in number consisting exclusively of financial entities and related subsidiaries.  Presumably, in due course, non-financial market players will eventually cross the de minimis thresholds for swap dealing and register as swap dealers; but, as of now, that does not appear to be the … Continue Reading

CFTC Extends Compliance Date For Dodd-Frank Business Conduct Rules To May 1, 2013 In Order to Give Market Participants Additional Time to Adhere to Dodd-Frank Protocol

Today, the CFTC deferred the compliance date for many of the Dodd-Frank’s external business conduct standards from December 31, 2012 to May 1, 2013.  The press release and related Interim Final Rules (“IFRs”) are available here. The CFTC based the issuance of the IFRs and related compliance date extension, to a large extent, on representations … Continue Reading

Free Webcast: End-User Exception to Central Clearing Dec. 4th at 1 p.m. Eastern

On December 4th at 1 p.m., FTI Consulting will host a free Securities Docket webcast on the end-user exception to central clearing.  PRESENTERS Erik F. Remmler, Associate Director of the Commodity Futures Trading Commission Dr. Susan Mangiero, FTI Consulting Andrew P. Cross, Reed Smith DATE & TIME December 4th, 1:00 p.m. Eastern COST Nothing – it … Continue Reading

The Swap Report Reports That The CFTC Announces That It Will Publish the “CFTC Swaps Report”

On November 14th, the CFTC issued a press release announcing a proposal to publish the CFTC Swaps Report, not to be confused with The Swap Report – Reed Smith’s blog on derivatives and regulatory transactional issues. The CFTC Swaps Report is a CFTC transparency initiative to aggregate and publish swaps market data on a weekly basis.  … Continue Reading

The End-User Exception to Central Clearing: A “Walking Map” and Some Introductory Thoughts – NOW IS THE TIME TO FOCUS

Who Should Pay Attention to the end-user exception to central clearing (and, by extension, this posting)? You should pay attention to this posting if you are any of the following: 1) A swap dealer or major swap participant that intends to offer hedging products to counterparties; 2) A non-swap dealer bank that intends to offer … Continue Reading