Today, senior financial analysts from the Office of Financial Research (OFR) published a blog post, Five Risk Areas That Financial Regulators Should Watch in 2023.
Continue Reading OFR Identifies Five Risk Areas That Financial Regulators Should Watch in 2023
On February 28, 2023, the National Futures Association (NFA) submitted the proposed adoption of NFA Compliance Rule 2-51 to the Commodity Futures Trading Commission (CFTC). The new compliance rule will apply to NFA members, including commodity pool operators (CPOs) and commodity trading advisors (CTAs), engaged in activities involving digital asset commodities. For purposes of the
According to Newsweek, Punxsutawney Phil saw his shadow on February 2, 2023, signaling 6 more weeks of winter. And, on February 24, 2023, the Financial Institution Regulatory Authority (FINRA) submitted a filing to the SEC that, in effect, will defer implementation of revisions to FINRA Rule 4210 mandating so-called “TBA margining” (technically, margin requirements
In March 2020, we published a post entitled Master Agreements and Volatile Markets: Decline in Net Asset Value Provisions.
We believe that the March 2020 post is particularly relevant in light of the cascading nature of stock market declines over the past year, and on-going market commentary and debates about the likelihood and extent
This post will bring to a close, for now, our survey of the requirements of new Rule 18f-4, which investment companies must comply with by August 19, 2022. This post considers whether a Chief Compliance or Risk Officer should seek to treat some or all of their funds as Limited Derivatives Users and
The release adopting Rule 18f-4 (the “Adopting Release”) devotes an entire section to discussing how “a fund that invests in other registered investment companies (‘underlying funds’)” should comply with the value-at-risk (“VaR”) requirements of the rule. This post considers three circumstances in which a fund investing in underlying funds:
As with Fund-of-Funds, the release adopting Rule 18f-4 (the “Adopting Release”) devotes a section to sub-advised funds. We again consider three types of funds:
This post continues our assessment of whether the Limited Derivatives User requirements of Rule 18f-4(c)(4) effectively and efficiently accomplish the SEC’s aim of providing “an objective standard to identify funds that use derivatives in a limited manner.” Here we question whether the “gross notional amount” of a derivatives transaction measures the
The financial press is awash this morning with reports that the launch of a bitcoin futures exchange-traded fund (a “BTC Futures ETF“) may be imminent.
Before recommending that clients invest directly in bitcoin or in a BTC Futures ETF, a registered investment adviser (RIA) should analyze:
Continue Reading RIAs and Bitcoin Futures ETFs: Forget Not Thy CPO and CTA Analysis
Our last series of posts on Rule 18f-4 have struggled to understand how its Limited Derivatives User requirements are supposed to work. We have done the best we could to explain the process for calculating a fund’s derivatives exposure, including determining the gross notional amount of derivatives transactions and adjustments thereto, excluding closed-out positions