Earlier today, LabCFTC released, “A Primer on Virtual Currencies,” which it describes as being the first of a series of publications “to help market participants and innovators navigate the FinTech landscape”. The publication, which provides an overview of “virtual currencies and their potential use-cases,” is noteworthy for several reasons: Continue Reading
The Federal Reserve Bank of New York (FRBNY) released the monthly statistics of the U.S. tri-party repo market for September 2017.
Tri-party repo statistics are available on a consolidated basis through the FRBNY’s tri-party repo interactive tool (available here) and master excel data file (current version here). Continue Reading
Earlier today, the CFTC’s Division of Clearing and Risk issued an interpretation stating that, “variation margin (‘VM’) payments and all other payments in satisfaction of outstanding exposures on counterparty’s cleared swap positions constitute settlement of the outstanding exposure and not collateral against it.” The practical effect of this interpretation Continue Reading
Yesterday, CFTC Chairman Christopher Giancarlo testified before the House Agricultural Committee. The following are highlights of “Fin Tech” issues addressed during the course of that testimony. Continue reading “FinTech Highlights from CFTC Chairman Giancarlo’s Testimony Before House Agricultural Committee” from the FinTech Report here.
Good day. Good to stay current on these very current events. DR2.
In testimony earlier today before the House Agricultural Committee, CFTC Chairman Christopher Giancarlo announced his advocacy of a one-year delay in the implementation of the reduction in swap dealer de minimis level. As background, a bank or other market participant can engage in a de minimis level of swap dealing activity without having to register as a swap dealer. Presently, the de minimis level is set at $8 billion, Continue Reading
In CFTC Letter 17-48, the Division of Swap Dealer and Intermediary Oversight (the “Division”) of the Commodity Futures Trading Commission (the “CFTC”) indicated that it would not recommend enforcement action against the manager of a oil and gas fund and its subsidiaries for failure to register as a commodity pool operator (“CPO”) or a commodity trading advisor (“CTA”). As background, the manager intended to use over-the-counter swap transactions (“Swaps”) to hedge commodity price risks relating to oil and natural gas investments made by the fund and its subsidiaries (collectively, the “Fund”). The following are the key facts presented in CFTC Letter 17-48: Continue Reading
On September 21st, the Commodity Futures Trading Commission (“CFTC”) announced the filing of charges against Nicholas Gelfman and Gelfman Blueprint, Inc. (the “Defendants”) for fraud, misappropriation, and issuing false account statements in connection with solicited investments in Bitcoin. According to the allegations asserted by the CFTC, the Defendants operated a Ponzi scheme, misappropriated funds from investors, and took steps to conceal losses (including by staging a “hack” on its computer systems designed to conceal what were actually trading losses and depletion of funds due to misappropriation).
The enforcement action is notable for two reasons: Continue Reading
On September 19, 2017, the Financial Industry Regulatory Authority (“FINRA”) published a proposed rule change (available here) to delay implementation of certain margin requirements in respect of what are referred to as “Covered Agency Transactions,” including To Be Announced (“TBA”) transactions and other specified delayed delivery transactions involving mortgage-backed securities.
The delay will move the implementation date of the margin requirements from December 15, 2017 until June 25, 2018. Continue Reading
Earlier today, the International Swaps and Derivatives Association (ISDA) sponsored a webinar, “The Foundations of an Efficient Market Infrastructure,” that focused on an initiative by ISDA’s Market Infrastructure and Technology Committee to facilitate the adoption of emerging technologies (DLT, smart contracts)into the trading, documentation and processing of derivatives.
The focus of the conference was on derivatives processing and reporting; however, the issues that plague derivatives are relevant to many other financial market processes and activities. Specifically, the primary challenge with respect to derivatives – a strained infrastructure that is too costly and inefficient to be sustainable – is common throughout the financial markets. Or, put differently, the development of technological solutions within the derivatives sector has the potential to become a template for the resolution of similar issues in other sectors of the financial marketplace. For this reason, today’s webinar may have an appeal that is broader than market participants with an interest in the process of derivatives.
The remainder of this message contains a summary of the information discussed at this informative webinar. Continue Reading
The Federal Reserve Bank of New York (FRBNY) continues to track and release monthly statistics of the U.S. tri-party repo market. This post concerns the April 2017 through August 2017 statistics (the “Five-Month Period”).
In March 2017, the FRBNY discontinued publishing the PDF and excel files containing single month statistics to which we have ordinarily provided a hyperlink. Instead, tri-party repo statistics will only be available on a consolidated basis through the FRBNY’s tri-party repo interactive tool (available here) and master excel data file (current version here). Continue Reading