Recently appointed CFTC Chairman Tim Massad announced last week that there were “a lot of things” he would like to do to continue the CFTC’s goal of regulating financial markets, but that he is held back by strict congressional budget constraintsRead More
CFTC Commissioner Scott O’Malia issued a stern warning to financial regulators in the United States and abroad that market fragmentation could have grave consequences on the world financial system.
The CFTC’s Division of Market Oversight this week granted no-action relief from certain requirements applicable to swap dealers and major swap participants regarding the reporting of swap transactions to swap data repositories. The no-action relief, issues June 30, 2014, extends previous no-action relief regarding the reporting of valuation data reporting of cleared swaps.
Maxine Waters, ranking member of the House Financial Services Committee, urged the CFTC this week to begin investigating the offshore actions of Wall Street banks in avoiding certain mandates set forth in the Dodd-Frank Act.
The Senate has confirmed three new CFTC commissioners.
The CFTC announced last week its first award under the whistleblower award program initiated pursuant to the Dodd-Frank Act. Under the program, eligible whistleblowers are entitled to a financial award where original information provided leads to a successful…
TeraExchange has recently announced that it has created a swap involving the average exchange rate of bitcoin and plans to list it on its Swap Execution Facility.
The Commodity Futures Trading Commission (CFTC) released a no-action letter recently, offering relief to public utilities that were having trouble finding market participants willing to work with them for hedging purposes.
Among a list of reasons for this given by CFTC Commissioner Scott O’Malia during an event, O’Malia mentioned inconsistent reporting and technological issues as major pain points.
The Commodity Futures Trading Commission’s internal regulator has determined that the CFTC may have been in violation of a federal law that requires the Commission to maintain a research program after suspending outside research from being published.
The Commodity Futures Trading Commission issued a no-action letter on Friday, stating that the Commission will be extending its overseas trading rules deadline, giving overseas traders more time to comply with the CFTC’s rules.
In a study done by the ISDA, Cross-Border Fragmentation of Global OTC Derivatives: An Empirical Analysis, it was found that the trade volume between Europe and the US in the OTC market dropped 77% in October
The CFTC has released a request for comment on around 70 questions regarding swaps-data reporting and how to use the data it collects from companies like Depository Trust & Clearing Corp. and CME Group Inc.
The Commodity Futures Trading Commission (CFTC) is looking into deals given to high speed trading firms by exchange operators.
The Commodity Futures Trading Commission may be delaying overseas trading restrictions that are set to go into effect next week.
Several commissioners have spoken out over the CFTC’s no action letters, finding that many of them were instituted without leaving them enough time to give their own input into the matter.
Chilton, who had said he would be leaving the CFTC in November, has stated that he will step down from the Commission by March 22nd.
The DTCC CFTC lawsuit was filed by the DTCC over the how the CFTC allowed CME Group Inc and IntercontinentalExchange to gather market data
The Commodity Futures Trading Commission and the Federal Energy Regulatory Commission have released a “Memorandum of Understanding” (MOU) detailing their agreement to share market data between one another.
Massad was one of several CFTC nominees to speak on their experience in front of the Senate yesterday, being joined by Sharon Bowen and J. Christopher Giancarlo, who also seem likely to be approved.
Outside of Massad, CFTC nominees Sharon Y. Bowen and J. Christopher Giancarlo, who are slated to take on roles as commissioners, will also be answering some questions for the Senate.
It was hoped that the swaps market reform would help promote trading between these two groups. But, even without this, the market will at least be more transparent.
While this will be a sizable increase to the CFTC budget, up 30 percent from the current $215 million, this new budget increase falls short from last year’s request of $315 million.
Platform operators seem to think that this new CFTC EC SEF agreement may not do much at all to keep liquidity between Europe and US markets.
Under the European Parliament Economic and Monetary Affairs Committee’s revised European benchmark legislation, EU based institutions will be forbidden from holding any products linked to unauthorized benchmarks.
US banks and central counter parties (CCPs) seem to be gaining confidence in the European Commission (EC) overlooking differences in their clearing house rules, preventing US CCPs from losing European clients.
This Tuesday (February 18th) marked the first day that trades had to be executed through SEFs in the US. And it seems that traders aren’t quite ready to jump on board.
After a meeting this morning, it seems the transaction tax plan, which failed to gain widespread acceptance at first, has received backing from 11 euro zone countries– though this acceptance could perhaps be seen as begrudging in some cases.
The banking industry has been pushing to have a group of debt investments omitted from the Volcker rule, saying that they differ from the types of investments that the Volcker rule was designed to regulate.
The CFTC and the EU have agreed to allow US firms to trade over European platforms, rather than forcing them to be traded through US swap execution facilities, or SEFs.
Having issued a report on high frequency trading last fall, the CFTC is now looking to get feedback on the many suggestions it has put forth for better regulating the industry.
Without the no-action letter, any traders participating in package swap trading would have to report any package swap that includes swaps subject to the made-available-to-trade (MAT) ruling to SEFs by February 15th.
The EU is set to implement new European derivatives rules this Wednesday in an attempt to begin bringing more transparency to the $700 trillion dollar market that has been blamed for being a major factor in the 2008 financial crisis.
Masters has been working in the swaps industry for well over a decade, and helped JP Morgan begin using credit default swaps to hedge bank risks.
The agreement will relieve EU trading platforms from being affected by US derivative trading rules, at least for the time being.
The rules will be addressing flaws in the credit derivatives market that were exposed during the financial crisis of 2008.
Beginning on February 12th, derivative transactions made by businesses in the EU will have to be reported to data banks known as trade repositories. This will be one of the EU’s first steps toward swap reform geared toward preventing a financial crisis similar to 2008 from occurring again.
The EU and the CFTC have announced that they will be working together in their implementation of cross-border regulation, after talks in Washington.
The European Union’s plan to quell big banks’ proprietary trading has been met with criticism from French banking lobbyists who say it will give an advantage to US banks, which would not be affected by the new rules.
The certification means that certain swaps handled by both TrueEx and Tradeweb will now fall under the trade execution mandate, and will now have to be traded over swap execution facilities (SEFs).
Before the ISDA can move forward with the ICAP investigation, they must phase it out of its current roles within the$ 463 trillion dollar swaps market, which will begin this week.
The CFTC will be putting together a group to review its swap report data collection process, as well as ensure that banks and other financial institutions are reporting and keeping records that are on par with the rules the Commission has put in place.
According to Reuters, the UK’s attempt to challenge a short-selling law that bans the ability to short-sell shares during market emergencies has been denied by a European Union Court.
Interestingly, with Bart Chilton leaving the CFTC soon, this will mark the first time the CFTC, originally created to monitor commodity trading and hedging within the agricultural industry, will be without a chairman or commissioner with a background in agriculture.
The first task of the IVSC, it seems, will be developing a benchmark by which to base this valuation. There is currently little to no guidance on how to price an asset contained within a company’s account, particularly when there is no market for the asset.
According to Reuters, the EU’s chief tax official is calling on countries within the Union to implement a strong financial transaction tax, rather than watering it down with various exemptions.
In accordance with CFTC regulation, swaps that are subject to MAT determinations, whether listed by Javelin or any other platform, will be subject to the trade execution mandate under a sections of the Commodity Exchange Act about one month after certification (February 15).
the European Union has successfully come to an agreement on a market rule overhaul that will tighten measures to regulate the derivatives market, slowing down high frequency trading and curbing speculation in commodity derivatives.
According to CFTC.gov, five federal agencies have approved an interim rule that will allow banks to keep certain securities, namely collateralized debt obligations, which are backed by trust preferred securities (TruPS CDOs).
The driving force behind this reform comes from public and political complaints over the risk involved with having banks trade physical commodities like crude oil and aluminum.
According to Bloomberg, the Commodity Futures Trading Commission (CFTC) is set to push interest-rate and credit swaps onto SEFs in the near future. While the CFTC is currently reviewing the plans, they haven’t found any reason…
Banks in the European Union are going to see limits on proprietary trading, based on a draft of an EU proposal.
With this approval, the Singapore Exchange can now offer US traders local clearing services for products like iron ore swaps, interest rate swaps and non-deliverable foreign exchange forwards.
Though this marks another step taken towards financial stability, it seems there is still a long way to go, and it may take some time before even the next step is made.
According to the Wall Street Journal, the Commodity Futures Trading Commission may be looking to force the derivatives trading rules the Commission has implemented in the US onto foreign markets. The CFTC had agreed to…
As the year comes to an end, so will the term for current Commodity Futures Trading Commission chairman Gary Gensler, according to Bloomberg, commissioner Mark P. Wetjen will be temporarily taking his place. Though Obama…
According to Reuters, a lack of congruency between US and EU over how to police the $640 trillion dollar derivative market is causing frustration within Asian Pacific markets, and could lead to serious and expensive…
According to the Wall Street Journal, the Federal Deposit Insurance Corp., Federal Reserve Board, Securities and Exchange Commission, and Commodity Futures Trading Commission have all voted to approve the infamous Volcker Rule. While the vote…
The Commodity Futures Trading Commission’s Scott O’Malia is hoping to see some changes to the CFTC over the next year.
According to the New York Post, several of the US’s largest banks plan to sue the Commodity Futures Trading Commission (CFTC) over some of the new rules it has been implementing. The banks are looking…
According to Reuters, many Asian and U.S. banks are looking for ways around new rules implemented by the Commodity Futures Trading Commission and other regulators. Some fear their maneuvers may lead to liquidity shortages within the market.
According to CFTC.gov, the Commodity Futures Trading Commission has filed a civil enforcement action against principal trading organization for both ”banging the close” and “spoofing” the IDEX USD Three-Month Interest Rate Swap Futures Contract.
According to Businessweek, the Commodity Futures Trading Commission will be voting today on a new rule that will result in Treasury collateral being subject to a “prearranged and highly reliable funding arrangement.” Should the rule…
According to Bloomberg, President Obama’s nominee for the next chairman to the Commodity Futures Trading Commission is being met with skepticism by some members of the Senate.
It seems safe to assume that the SEF registration rules will disrupt these trends, as traders will be more inclined to conduct business via single-trade platforms in order to circumvent the process altogether.
According to the Financial Times, the White House plans to nominate Timothy Massad for chairman of the Commodity Futures Trading Commission (CFTC). Massad, a US treasury official, will be taking the place of current CFTC…
According to Bloomberg, the EU’s antitrust probe will see delays now that the banks involved with the case have successfully fought for the ability to see the confidential information the Commission has gathered on the…
The new rule will alter the operations of the options market to be more like the stock market, where “obvious” trading errors are already handled under a single blanket set of rules.
Despite pleas from foreign markets and regulators alike, Gensler refuses to back down. During the address he stated that if a swap dealer, US or non-US, negotiates or executes a swap anywhere in the US, then it falls under Dodd-Frank.
The call for change to the ISDA comes in the wake of the collapse of Lehman Brothers and the ensuing 2008 financial crisis. The delay will allow regulators and failing banks to sell off contracts in a more orderly fashion, reducing volatility in the market.
The BDA is concerned that giving out too much information may cause market participants to ease up on trading and decrease liquidity.
According to Business Week, the Federal Reserve liquidity coverage ratio proposal was approved earlier today. The rule, which affects banks with over a quarter of a trillion dollars in assets the most, will take the approved international rules a few steps further.
According to Bloomberg.com, many of the United States’ largest banks aren’t happy with a recently proposed rule to increase the minimum capital a bank needs to hold against potential losses. Banks are saying the new…
Experts are saying that the CFTC’s new rules will affect fund performance, as the higher cost of doing business will detract from returns. Many also worry that new disclosure rules will lead to confidentiality issues offshore.
In hopes of raising CFTC staff morale, Chairman Gary Gensler will be holding a town hall meeting with the entire agency to try and bring employees together and address any of their concerns.
While White feels all of the provided information she mentioned is or has been useful to investors, she wonders if there isn’t a more efficient way to provide this information, fearing that the often lengthy reports can be difficult for investors to work through.
The government shutdown, which started over the House’s inability to come to an agreement on the Affordable Care Act, has since changed trajectory and is now a fight over how the government will pay down its debt, and under what terms will the debt ceiling be raised.
The new rule is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law in 2010 as a means to create more transparency in the financial services industry in response to the 2008 financial crises.
O’Malia feels the use of data will allow the CFTC to understand problems that can occur within the market, citing the Flash Crash of 2010, where the market was found to be vulnerable to automated trading errors after the event.
O’Malia, who was named commissioner of the CFTC in 2009, has stated that there have not been any significant issues to date, though they were having difficulty getting consistent data on just how many trades have been executed through the facilities so far.
According to bankingtech.com, senior financial industry executives are less than pleased with the US and EU’s inability to work together on the implementation of derivatives reforms and swap execution facilities. While the Dodd-Frank Act was…
In the investigation, the CFTC sat down with Susan Butterman to ask her some questions. Butterman, who would often pre-stamp several order forms, covering every time bracket as a ways to be prepared, told the CFTC said that she only stamped forms as orders were being processed.
While some traders plan to fall back on other options for their insights, such as the New York Mercantile Exchange, these reports don’t offer as much data as the CFTC’s.
With almost no personnel, the CFTC is finding it nearly impossible to monitor the $633 trillion dollar market.
Gensler’s apparently unyielding stance on deadlines, despite continuous complaints and requests for delays is impressive considering not only that he will be stepping down as Chairman within the month, but that he is going forward with these deadlines in the midst of a government shutdown.
As of right now, the CFTC plans to cut the time margin calls must be reported from three days to just one day. The CFTC would also require that all customer funds be fully margined at all times.
The CFTC mandated that all swaps trading must be done through SEFs in order to add more transparency to the swaps market, which is often considered to be a major factor in the cause of the 2008 financial crisis.
Outside of enforcement actions, Mr. Meister enhanced collaborative relationships with the U.S. Justice department, the FBI, and many other domestic and foreign agencies. He also smoothed out the Division’s investigative and management techniques, increasing the speed in which cases were handled, and ensuring consistent enforcement actions across the board.
The delays will affect the required reporting of foreign exchange swaps as well as equity swaps, by one and two months, respectively. The largest part of the market, fixed income and credit swaps, will be unaffected, and will begin being reported on October 2nd.
Beginning his speech, Chairman Gensler recalls the state of the U.S. economy in 2008, putting the majority of the blame for the financial crisis on the swaps market.
Obama had brought up the idea of a second term to Gensler back in March, and though Gensler hasn’t commented on the subject, it’s been assumed that he is looking for a more prominent position.
According to CFTC.gov, the Commodity Futures Trading Commission (CFTC) has closed its investigation on the silver market after five years. While the CFTC normally keeps a tight lid on its investigations, it has decided to announce…
ccupy Wall Street is back, and this time their target is high frequency trading. On the second anniversary of the Occupy Wall Street movement, protesters will be gathering in New York City to demand Congress pass the “Robin Hood Tax.”
The U.S. Commodity Futures Trading Commission (CFTC) has approved the applications of SwapEx LLC, GFI Swaps Exchange LLC, and MarketAxess SEF Corporation for temporary registration as swap execution facilities (SEFs) pursuant to section 5h of the Commodity Exchange Act and section 37.3(c) of the Commission’s regulations.
The third phase of mandatory compliance with clearing requirements for certain Credit Default Swaps and Interest Rate Swaps was implemented on September 9, 2013.
The U.S. Commodity Futures Trading Commission today published a Concept Release on Risk Controls and System Safeguards for Automated Trading Environments in the Federal Register. The Release is intended to serve as an overview of potential measures that may be able reduce the likelihood and mitigate the impact of market disrupting events.
President Barack Obama met with Wall St regulators on Monday, August 19th 2013 to discuss the progress made after the 2010 passing of the Dodd-Frank Act.
It was announced on Sunday that President Obama is planning to meet with key regulatory officials Today to discuss the advancement of Dodd-Frank.
Hurricane Sandy took a physical toll on New York City, but a joint meeting of the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), and the Commodity Futures Trading Commission (CFTC) on the topic of disaster recovery, proved that it’s not just physical damage that companies are worried about.
Also in his testimony, Gensler cited the recent progress made with cross-border swaps regulation in addition to registration of securities as positive steps forward in the CFTC’s aim to create transparency in the futures industry.
The Federal Reserve announced that they will be reviewing their rulings regarding Banks trading commodities after receiving complaints.
In response to several high profile anomalies in the trading market due to High Frequency Trading (HFT) in the past year, the Finance Industry Regulatory Authority (Finra) has been looking into several trading firms with how they use and control their trading algorithms.
Terrence Duffy, Chairmen of the CME Group, counseled Senators against a pending CFTC ruling regarding collateral set aside by brokerages on July 17th, 2013. Duffy’s presentation before the Senate Committee on Agriculture, Nutrition and Forestry was in a hearing to evaluate the CFTC.
Since the last cybersecurity simulation in 2011, the list of firms and institutions wishing to be included in this years attack has more than doubled, according to the SIFMA brief released today. The organizations undergoing the attack has grown to include stock exchanges, businesses, the U.S. Treasury and Department of Homeland Security, and the simulation will attempt to expose any critical weaknesses in security these firms may have.
Cross border swaps have become a hot issue in the CFTC for some time now, but was resolved following last Friday’s vote, which passed the new regulations as well as a 75 day guidance period.
Christopher Ehrman was most recently an Assistant Director at the Office of Market Intelligence at the Securities and Exchange Commission, and brings with him extensive regulatory experience. As Gary Gensler said, in a CFTC press release that came out today, “Chris, who comes to us after many years of experience in the SEC’s Enforcement Division, takes on an important role at the Commission to oversee our Whistleblower program and engage with people who report misconduct in the futures and swaps markets.”
The impacts of the Commodities Futures Trading Commission’s (CFTC) response to cross-border swaps are yet unknown. With a 75 day period of guidance in addition implementation of the final ruling, this unprecedented move by the CFTC may deeply impact the derivatives market.
The European Commission and the CFTC have many advantages of developing cross-border regulations together. In light of this demonstration of international cooperation, some have hopes that the G20 promise to promote transparency in over-the-counter derivatives trading will become more of a focal point in regulation.
On Monday, the Basel Committee released a discussion paper dealing with the simplicity of the regulatory systems, leading some to take it as a sign that the committee may advocate simpler regulations in the future.
After weeks of speculation, it looks like the Commodity Futures Trading Commission (CFTC) will conclude a foreign regulatory issue this Friday, July 12th. The vote will regard how domestic regulations on swaps apply to foreign…
The first paper improves upon the interim credit assessment suggestions that the Basel Committee made with the Current Exposure Method (CEM) and the Standardised Method. The new credit risk assessment of counterparties in derivative trading fine-tune upon the CEM and the Standardised Method by creating separate risk exposure plans for margined and unmargined trades.
Corzine originally joined MF Global with intent to turn the futures broker into an investment bank, and according to the CFTC release, “Corzine’s strategy called for making increasingly risky and larger investments of the firm’s money.” Apparently, Corzine had been made aware of the low cash balance of the firm, but still continued to order the payback of loans and obligations.
The No-Action relief issued to SDs and MSPs regarding reporting regulations is extended to June 30th, 2014.
Gary Gensler, Chairman of the CFTC, told members of the Senate Appropriations committee that the CFTC would let the extension expire and continue reformation. He also mentioned that swap participants, including big banks, would comply with the regulations. An exemption from cross-border swap regulation is set to expire on June 12th, meaning firms participating in swaps would have to finalize compliance by that date.
The Commodity Futures Trading Commission’s interim relief for cross-border swaps is due to expire on July 12th, but in a speech at a London Futures Industry Associated expo, CFTC Commissioner Mark Wetjen made it clear he…
With Gary Gensler’s term expired in April, 2013 and a re-appointment being as soon as July, Elizabeth Warren is decrying commissioners for what she sees as stalling regulation. Certain policies that the Commodity Futures Trading…
On Tuesday, June 18th 2013, CFTC Commissioner Bart Chilton gave the keynote address in the conference Hedge Fund Industry in 2013, which was held in Chicago, Illinois. In the address, he gives some insight into…
The other members on the commission, such as Sommers, Chilton, O’Malia, and Wetjen are also up for re-appointments this year, and lobbyists and lawyers are waiting eagerly to see what the turnover is. According to the bylaws of the Commission, each commissioner is supposed to serve a five year term, as appointed by the president. Furthermore, no more than three members may be of the same political party at the same time.
Until the robustness of US credit swap policy has been reviewed, some European banks have been given more restricted access to clearing houses outside of the European Union. Because of concerns that US banking policies may not be compliant with European policies, credit swap rules have become a contentious issue between US and EU regulatory bodies, according to Bloomberg.
The Commodity Futures Trading Commission (CFTC) was prepared to supervise all derivatives trading, including FX trading ─however the Securities and Exchange Commission (SEC) took a more hands-off approach by allowing overseas derivative trading to bypass U.S. regulation if the country in which they occur had a regulation system that closely resembles our own.
The Wall Street Journal reports that seven banks have received extensions on complying with the rule that would require them to “move risky swap activities into separate affiliates.” The Office of the Comptroller of the…
According to the International Finance Review (IFR), the initial CSA that was published by the ISDA in 1994 had an enormous amount of optionality by allowing participants to use a “variety of collateral in differing currencies,” making the valuation of even the simplest swaps an intricate ordeal.
The new Standardized CSA aims to remove this optionality while solidifying overnight index swaps (OiS) discounting as the industry standard and creating a consistent valuation process for cleared and uncleared swaps.
CFTC chairman, Gary Gensler, is set to meet with European financial regulators on June 20th in Montreal, reports The Wall St. Journal. The meeting will be a hurdle for Gensler, who opposes an extension for…
With this new position, O’Connor will have hands-on involvement in driving ISDA’s strategic initiatives. The pace and scope of those initiatives continues to increase given global regulatory reform and the continued evolution of the financial markets and the OTC derivatives business. To address these needs, the decision was made to appoint a full-time chairman who could devote more time and energy to directing and leading the Association.
The Securities and Exchange Commission is looking to push through a plan that would aim to prevent another run on money market funds, The Washington Post reports. This comes as a response to the events…
Christopher Hale and Eric Richardson were charged for misleading their clients on the success of their futures trading. Bentley Equities told their clients that they were actively managing more than $1 million in commodity futures accounts, when in reality they never managed more than $480,000 in commodity futures at one time.
More than 50 investor groups released a statement expressing their disagreement with the lawsuit filed against the Securities and Exchange Commission (SEC) by the U.S. Chamber of Commerce, the National Association of Manufacturers, and the…
Reuters has reported that participating European countries plan to cut the FTT (financial transaction tax) rate by up to 90% and may have its “full roll-out” delayed. The tax, which is set to target speculative…
The E.U. has asked for a delay in the enforcement of new swaps rules set to take effect on July 12, when the exemptions for overseas banks of the Dodd-Frank Act expire. In a report…
Barney Frank himself, famous for his stance of government regulation has said, “I believe that a free market approach in this area will be better for the economy and all concerned parties than the current system,” yet the amendment remains in effect.
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In a response to a request by the CFTC’s Technology Advisory Committee for comment on how best to develop a 21st century surveillance system, the Financial Industry Association (FIA) and the FIA Principal Traders Group submitted a comment letter this week setting forth five core principles for modernizing market surveillance.