Commentaries

Bridging the Week by Gary DeWaal: April 24 to 28 and May 1, 2017 (Registration Forms; Social Networking; Recordkeeping; Exchanges Expenses)

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Published Date: April 30, 2017

It was a light week for news impacting financial service industry participants, but there were still a few items of interest. Among other things, the core basic registration form required for all individual registrants with the Commodity Futures Trading Commission will be getting a minor nip and tuck after many years. Additionally, India approved and proposed many significant changes regarding its oversight of commodity derivatives participants and products. As a result, the following matters are covered in this week’s edition of Bridging the Week:

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Article Version

Briefly:

Legal Weeds: Registered floor traders that trade swaps for their own account solely on a swap execution facility do not have to register as a swap dealer regardless of the notional value of the swaps they have executed. (Click here to access CFTC Rule 1.3(ggg)(6)(iv) and here for CFTC Division of Swap Dealer and Intermediary Oversight No-Action Letter 13-80.) In its initially proposed Regulation Automated Trading, the CFTC recommended the mandatory registration of persons as floor traders if they engaged in algorithmic trading for their own accounts through direct electronic access on designated contract markets and they were not registered with the CFTC in any one of certain enumerated capacities (i.e., an FCM, floor broker, swap dealer, major swap participant, commodity pool operator, commodity trading advisor or introducing broker). Under a supplemental proposal made in November 2016, the CFTC recommended that the floor trader registration requirement only apply to an otherwise relevant non-registered person if the person traded 20,000 or more contracts in aggregate on a DEA basis across all DCMs on an average daily basis during the prior six-month counting period (i.e., January 1 through June 30 or July 1 through December 31). (Click here for further details regarding Regulation AT and the CFTC’s supplemental proposal in the article “Proposed Regulation AT Amended by CFTC; Attempts to Reduce Universe of Most Affected to No More Than 120 Persons” in the November 6, 2016 edition of Bridging the Week.)

And finally:

For further information:

CFTC’s Division of Market Oversight Issues Guidance to Exchanges on Calculating Projected Operating Costs:
http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/17-25.pdf

CFTC’s DSIO Authorizes CTAs to Use Third-Party Record-keepers:
http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/17-24.pdf

FINRA Issues Guidance on Use of Social Networking Websites and Business Communications:
http://www.finra.org/sites/default/files/notice_doc_file_ref/Regulatory-Notice-17-18.pdf

HK Regulators Consider Carve-Out of Delta One Warrants From the Definition of OTC Product:
http://www.sfc.hk/edistributionWeb/gateway/EN/consultation/openFile?refNo=17CP2

India Approves and Proposes Substantial Changes to Its Oversight of Commodity Derivatives Participants:

Registration Form for Individuals Revised by CFTC:
http://www.cftc.gov/idc/groups/public/@lrfederalregister/documents/file/2017-08558a.pdf

The information in this article is for informational purposes only and is derived from sources believed to be reliable as of April 29, 2017. No representation or warranty is made regarding the accuracy of any statement or information in this article. Also, the information in this article is not intended as a substitute for legal counsel, and is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. The impact of the law for any particular situation depends on a variety of factors; therefore, readers of this article should not act upon any information in the article without seeking professional legal counsel. Katten Muchin Rosenman LLP may represent one or more entities mentioned in this article. Quotations attributable to speeches are from published remarks and may not reflect statements actually made.

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ABOUT GARY DEWAAL

Gary DeWaal

Gary DeWaal is currently Special Counsel with Katten Muchin Rosenman LLP in its New York office focusing on financial services regulatory matters. He provides advisory services and assists with investigations and litigation.


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