By William Kelly Acknowledging the rapid evolution of information technology and correspondent threats, on August 20, 2015 the National Futures Association (“NFA”) issued an Interpretive Notice addressing cybersecurity concerns. The Interpretive Notice established general requirements relating to the information systems security programs (“ISSPs”) of futures commission merchants, commodity trading advisors, commodity pool operators, introducing brokers, retail foreign exchange dealers, swap dealers, and major swap participants …
New Derivative Position Limit Rule
Under the Dodd–Frank Wall Street Reform and Consumer Protection Act (commonly referred to as “Dodd-Frank”), Congress required the Commodities Futures Trading Commission (“CFTC”) to impose limits in speculative positions in physical commodity futures and options contracts and economically equivalent swaps. On November 5, 2013, the CFTC in a 3-1 vote approved a new rule (the “Rule”) that establishes position limits in 28 physical commodity futures …
CFTC and Swaps: What You Should Know
Under the Commodity Exchange Act (“CEA”), a person who qualifies as a “swap dealer” or “major swap participant” is required to register with the Commodity Futures Trading Commission (“CFTC”) and comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act’s regulatory regime governing swaps, which generally requires, among other things: Mandatory clearing of certain designated derivatives through a “derivatives clearing organization” (“DCO”) Mandatory execution …
SEC and CFTC Establish Identity Theft Detection and Prevention Guidelines
By Ryan Finn and Simon Riveles In an effort to reduce the ever-increasing threat of identity theft, the Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”) (together, the “Commissions”) recently adopted the Identity Theft Red Flag Rule ( or Regulation “S-ID”). Broadly speaking, S-ID requires entities regulated by the Commissions that maintain “transaction accounts” to develop and implement a written identity …
The JOBS Act: Important Questions Remain Unresolved For Private Funds
On August 29, 2012, the SEC proposed rules implementing the Jumpstart Our Business Startups Act’s (JOBS) eliminating the long-standing ban on general solicitation and general advertising for certain exempt securities offerings. The proposal would require (1) all purchasers of securities sold in such offerings to be accredited investors and (2) that issuers take reasonable steps to verify that their purchasers are accredited investors. The proposed …
Commodity Mutual Funds Required to Register with CFTC
On February 9, 2012, the CFTC adopted final rules that, among other changes, amend Rule 4.5 which had provided relief to registered investment companies (e.g. mutual funds) from registration as commodity pool operators. Rule 4.5 as amended imposes significant new conditions on claiming the exclusion. These changes will result in the need for CPO registration in situations where an investment company’s investment program has a …
CFTC Rescinds and Modifies Certain Exemptions to Registration for CTOs and CTAs
On February 9, 2012, the CFTC adopted final rules regarding changes to Part 4 of the Commission’s regulations regarding registration and compliance obligations for CPOs and CTAs. The new rules: rescind registration exemptions available for commodity pool operators (“CPOs”) offering commodity pools to sophisticated and creditworthy investors under CFTC regulation 4.13(a)(4); rescind relief from the certification requirement for annual reports providing certain pools offered only …
CFTC Adopts Anti-Fraud and Anti-Manipulation Rules
On July 7, 2011, the Commodity Futures Trading Commission (“CFTC”) issued final rules under the new anti-manipulation and anti-fraud provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act