Commodity Futures Trading Commission January 2014 – Federal Register Recent Federal Regulation Documents

The Commodity Futures Trading Commission (``CFTC'' or ``Commission'') is adopting a final rule to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank Act''), which contains certain prohibitions and restrictions on the ability of a banking entity and nonbank financial company supervised by the Board of Governors of the Federal Reserve System (the ``Board'') to engage in proprietary trading and have certain interests in, or relationships with, a hedge fund or private equity fund. Section 619 also requires the Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission to also issue regulations implementing section 619 and directs the CFTC and those four agencies to consult and coordinate with each other, as appropriate, in developing and issuing the implementing rules, for the purposes of assuring, to the extent possible, that such rules are comparable and provide for consistent application and implementation. To that end, although the Commission is adopting a final rule that is not a joint rule with the other agencies, the CFTC and the other agencies have worked closely together to develop the same rule text and supplementary information, except for information specific to the CFTC or the other agencies, as applicable. In particular, the CFTC's final rule is numbered as part 75 of the Commission's regulations, the rule text refers to the ``Commission'' instead of the ``[Agency]'' and one section of the regulations addresses authority, purpose, scope, and relationship to other authorities with respect to the Commission. Furthermore, it is noted that the supplementary information generally refers to the ``Agencies'' collectively when referring to deliberations and considerations in developing the final rule by the CFTC together with the other four agencies and references to the ``final rule'' should be deemed to refer to the final rule of the Commission as herein adopted.

On September 12, 2013, the Commodity Futures Trading Commission (``Commission'') published in the Federal Register a Concept Release on Risk Controls and System Safeguards for Automated Trading Environments (``Concept Release''). The Concept Release addresses the evolution from human-centered to automated trading environments and seeks comment on a series of pre-trade risk controls, post-trade measures, system safeguards and other protections applicable to trading platforms and other categories of market participants. Its original comment period closed on December 11, 2013. For the reasons set forth below, the Commission is reopening the comment period for the Concept Release beginning on January 21, 2014. Interested parties may submit comments on or before February 14, 2014.

On November 15, 2013, the Commodity Futures Trading Commission (``Commission'') published in the Federal Register a notice of proposed rulemaking (the ``Aggregation Proposal'') to amend existing regulations setting out the Commission's policy for aggregation under its position limits regime. On the same day that the Commission adopted the Aggregation Proposal, it also adopted a proposal to establish speculative position limits for the 28 exempt and agricultural commodity futures and options contracts and the physical commodity swaps that are economically equivalent to such contracts that previously had been covered by part 151 of its regulations (the ``Position Limits Proposal''). However, the Position Limits Proposal was not published in the Federal Register until December 12, 2013. Because the comment period for both proposals was 60 days after publication in the Federal Register, the comment period for the Position Limits Proposal runs to a later date than the comment period for the Aggregation Proposal. In order to provide interested parties with an opportunity to comment on the Aggregation Proposal for so long as the comment period on the Position Limits Proposal is open, the Commission is extending the comment period for the Aggregation Proposal so that it ends at the same time as the comment period for the Position Limits Proposal.

The Commodity Futures Trading Commission (``Commission'') is requesting comment on an advisory issued by Commission staff on November 14, 2013 (the ``Staff Advisory''), regarding the applicability of certain Commission regulations to the activity in the United States of swap dealers (``SDs'') and major swap participants (``MSPs'') registered with the Commission that are established in jurisdictions other than the United States (whether an affiliate or not of a U.S. person, a ``non-U.S. SD'' or ``non-U.S. MSP'').