CFTC Issues Orders of Registration to Two Foreign Boards of Trade

On August 22, the Commodity Futures Trading Commission announced it had issued Orders of Registration to Osaka Exchange, Inc. (OSE), a Foreign Board of Trade (FBOT) located in Japan, and Nasdaq Oslo ASA (Nasdaq Oslo), an FBOT located in Norway. The Orders authorize OSE and Nasdaq Oslo to provide their identified members or other participants located in the US with direct access to their electronic order entry and trade matching systems.

The OSE Order of Registration is available here.

The Nasdaq Oslo Order of Registration is available here.

CFTC Proposes To Exempt Some Companies and Institutions From the Clearing Requirement for Certain Swaps

On August 23, the Commodity Futures Trading Commission proposed amendments to Rule 50.5 in order to exempt certain bank holding companies, savings and loan holding companies, and community development financial institutions from the clearing requirement for certain swaps. The proposed amendments would codify no-action relief that the Division of Clearing and Risk (DCR) had granted these institutions in 2016. Consistent with the earlier no-action letters, amended Rule 50.5 would exempt from the clearing requirement a swap entered into to hedge or mitigate commercial risk, if one of the counterparties to the swap is either (1) a bank holding company or savings and loan holding company, each having no more than $10 billion in consolidated assets, or (2) a community development financial institution transacting in certain types and quantities of swaps.

Comments with respect to the proposed rules are due 60 days after the proposed rules are published in the Federal Register. The proposed rules are available here.

CFTC Adopts Amendments To Simplify Chief Compliance Officer Duties and Annual Report Rules

On August 21, the Commodity Futures Trading Commission adopted amendments to Rule 3.3, which sets out the duties of a chief compliance officer (CCO) of a futures commission merchant, swap dealer and major swap participant (each, a registrant). The amended rules are designed to simplify a CCO’s duties under the rule and to harmonize further CFTC and parallel rules previously adopted by the SEC. Among other changes, the amended rules: (1) clarify that a CCO’s duty is to administer policies and procedures that are specific to the registrant’s business as such; (2) provide that a CCO must take reasonable steps to resolve “material” conflicts of interest arising from the registrant’s business as such (rather than resolve any conflicts of interest); (3) require that the CCO take “reasonable steps” to establish and maintain written policies and procedures and remove the requirement that the CCO consult with the board of directors in doing so; and (4) require that the CCO take “reasonable steps” to establish written procedures for the handling of noncompliance issues and remove the requirement that the CCO consult with the board of directors in doing so.

The CFTC also simplified the requirements with respect to the preparation and filing of the CCO Annual Report and adopted revised guidance on the form and content of the Report.

The amended rules will take effect 30 days after publication in the Federal Register. The amended rules are available here.