On June 1, 2023, The Commodity Futures Trading Commission (CFTC) published an advanced notice of proposed rulemaking (ANPRM) seeking public comment on potential amendments to the Risk Management Program (RMP) requirements in CFTC Regulations 23.600 and 1.11 (collectively, “RMP Regulations”), which are applicable to swap dealers (SDs) and futures commission merchants (FCMs).Continue Reading CFTC Seeks Comment on the Risk Management Program Requirements for Swap Dealers and Futures Commission Merchants With a Focus on Digital Assets
On June 5, 2023, the Commodity Futures Trading Commission (CFTC) issued an order authorizing CBOE Clear Digital, LLC (“CBOE Clear”), a registered derivatives clearing organization (DCO), to clear margined digital asset futures contracts. Concurrent with the June 5th order, CFTC Commissioner Christy Goldsmith Romero issued a supporting statement in respect of the order. This blog post provides an overview of the terms and conditions of the CFTC’s June 5th order, particularly in light of certain of Commissioner Goldsmith Romero’s comments, following a brief outline of the administrative history related to CBOE Clear’s digital asset product line-up.Continue Reading CFTC Permits CBOE Clear Digital, LLC to Clear Digital Asset Futures on a Margined Basis
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…
By Keith Miller, Kari Larsen and Sarah Howland
The Commodity Futures Trading Commission (CFTC) Settlements Timeline serves as an interactive compilation of select CFTC guidance, enforcement actions, and speeches relating to the application of the federal securities laws to digital assets. Beginning with the Order filed in September, 2015 by the CFTC requiring Coinflip and…
In Episode 4 of our Podcast Series, Todd Zerega and Andrew Cross discuss the use of derivatives on cryptocurrencies by institutional investors. Specific attention is given to regulatory and product development considerations for registered investment advisors and fund sponsors, as well as technical considerations related to exchange-traded futures on bitcoin and other similar listed…
By Andrew Cross and Kari Larsen
Original post is from 12/18 in the Virtual Currency Report.
The Commodity Futures Trading Commission (CFTC) recently released a Digital Assets Primer that provides updated information to the public about emerging concepts in digital assets. The primer is part of a series issued by the CFTC’s innovation office, LabCFTC,…
A discussion with Andrew Cross on the ISDA’s new LIBOR fallback protocol and guidance for FCMs holding virtual currencies and single security futures.
This post builds upon an idea presented in Part 4 of current series of posts on considerations for investment funds and advisers related to cryptocurrency derivatives.
In particular, this post provides additional perspectives on the relationship of leverage, margin, and financing to two commodity interests: “retail commodity transactions” and a “swaps”. We decided to present these comments separate from the current multi-part series on cryptocurrency derivatives, since the topic may appeal to a broader audience than funds and advisers.
This post was co-authored with Michael Selig, an associate attorney in the New York office of Perkins Coie.Continue Reading Swaps and Retail Commodity Transactions (Leverage, Margin or Financing: Will We Know It When We See It or Only After It Has Been Identified As Such?)
This post is the fourth in a series that outlines key considerations for investment funds and their advisers regarding the application of the U.S. commodity laws to cryptocurrency derivatives. This post is intended to be a primer on the topic and is not legal advice. You should consult with your counsel regarding the application of the U.S. Commodity laws to your particular facts and circumstances.
In this Part 4, we discuss the commodity interests that are likely to be of greatest interest to crypto funds and advisers: futures contracts, swaps and retail commodity transactions.
At the outset, a sincere thanks goes out to Conor O’Hanlon and Michael Selig for their invaluable assistance and time spent thinking through many of the issues that are at this heart of this post and, more generally, this series.Continue Reading Cryptocurrency Derivatives, Funds and Advisers: Key Considerations Under U.S. Commodity Laws (Part 4: About the Interests of Interest)
This post is the third in a series that outlines key considerations for investment funds and their advisers regarding the application of the U.S. commodity laws to cryptocurrency derivatives. This post is intended to be a primer on the topic and is not legal advice. You should consult with your counsel regarding the application of the U.S. commodity laws to your particular facts and circumstances.
In Part 1, we focused on the status of cryptocurrencies as commodities and how that status relates to the jurisdiction of the U.S. Commodity Futures Trading Commission (the “CFTC”). In Part 2, we provided an overview of the regulation of commodities and the commodity markets under the Commodity Exchange Act (the “CEA”), explaining in particular that while the authority to prevent fraud and manipulation may apply to any transaction in interstate commerce that involves a commodity, the CFTC’s “substantive regulation” applies only if a transaction involves a “commodity interest“.
Here, in Part 3, we explain why the concept of a commodity interest can be described as a “linchpin” to the substantive regulation of CPOs and CTAs.Continue Reading Cryptocurrency Derivatives, Funds and Advisers: Key Considerations Under U.S. Commodity Laws (Part 3: Why Commodity Interests Are of Interest)