CFTC approved a proposed rule on position limits for derivatives and a proposed rule amending requirements for certain Swap Execution Facilities and real-time reporting. Comments on the proposed rule on position limits for derivatives must be received before April 29, 2020. The proposed rule that amends the requirements for certain Swap Execution Facilities and real-time reporting has a comment period until April 20, 2020. CFTC also published a fact sheet on the proposed rule on position limits for derivatives.
Proposed rule on Position Limits for Derivatives. CFTC is proposing amendments to regulations concerning speculative position limits to conform to the Dodd-Frank Act amendments to the Commodity Exchange Act. Among other amendments, CFTC proposed:
- New and amended federal spot month limits for 25 physical commodity derivatives
- New and amended definitions for use throughout the position limits regulations, including a revised definition of “bona fide hedging transactions or positions” and a new definition of “economically equivalent swaps”
- Amended rules governing exchange-set limit levels and grants of exemptions therefrom
- A new streamlined process for bona fide hedging recognitions for purposes of federal limits
- New enumerated hedges
- Amendments to certain regulatory provisions that would eliminate Form 204, enabling CFTC to leverage cash-market reporting submitted directly to the exchanges
Proposed Rule on Amendments to Swap Execution Facility Requirements and Real-Time Reporting Requirements. CFTC proposed to amend certain parts of its regulations related to the execution of package transactions on swap execution facilities; the execution of block trades on swap execution facilities; and the resolution of error trades on swap execution facilities. These matters are currently the subject of relief in certain no-action letters from the CFTC staff.
- Federal Register Notice on Position Limits for Derivatives
- Federal Register Notice on Swap Execution Facility Requirements
Comment Due Date: April 29, 2020/April 20, 2020
Keywords: Americas, US, Banking, Securities, Position Limits, Swap Execution Facility, Reporting, Hedging, Dodd-Frank Act, Derivatives, Swaps, CFTC
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
Previous ArticleFINMA Assesses Recovery and Emergency Plans of Large Swiss Banks
The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.
The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.
As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.
The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.
The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.
The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.
The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.