On April 25, 2019, the U.S. Commodity Futures Trading Commission (“CFTC”) announced its approval of a proposed rule and request for comment (“Proposed Rule”) that, if finalized, would amend swap data repository (“SDR”) regulations. The Proposed Rule also proposes to amend existing SDR reporting requirements for market participants. In sum, if adopted, the Proposed Rule will require market participants who are subject to reporting obligations under Part 45 of the CFTC Rules (“reporting counterparties”) to:

  • verify the accuracy of swap data against swaps reports generated and provided by the SDR; and
  • correct swap data errors and omissions “as soon as technologically practicable . . . but no later than three business days following” discovery of the error or omission.

Similarly, any non-reporting counterparty that discovers an error or omission would have to lodge a report with the reporting counterparty as soon as technologically practicable but within three business days after discovering the error or omission.

The comment period for the Proposed Rule ends on July 29, 2019. The remainder of this post provides additional information about the Proposed Rule and potential implications for market participants.Continue Reading CFTC Begins Implementing Swap Data Roadmap; Proposes Additional Reporting Requirements

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)

Links to Text of Rules

Final Rules: http://www.sec.gov/rules/final.shtml

Proposed Rules: http://www.sec.gov/rules/proposed.shtml

2015 Timeline Final Rules (F) and Proposed Rules (P)

(F) February 2015 Finalized Registration and Governance Rules that Apply to SBS Data Repositories

(F) February 2015 Finalized SBS Data Reporting Rules

(P) February 2015 Proposed Rules to Implement the Finalized Reporting Rules, Establish Certain