On October 2, 2023, the Commodity Futures Trading Commission (CFTC) published a notice of proposed rulemaking (NPRM), which includes a proposal to amend portions of 17 C.F.R. § 4.7. Under Regulation 4.7, commodity pool operators (CPOs) and commodity trading advisors (CTAs) are exempt from certain disclosure, reporting, and recordkeeping requirements, so long as the
Derivatives & Repo Report
A Buy-Side Guide to Regulatory and Transactional Issues Related To Derivatives and Repurchase Agreements
Blog Authors
Latest from Derivatives & Repo Report
Rule 4210 Amendments Approved With May ’24 Effective Date
The U.S. Securities and Exchange Commission (SEC) approved FINRA’s proposed amendments (Amendments) to Rule 4210 on July 27, 2023.
In summary, the Amendments amend Rule 4210 in the following respects:
- Eliminate the 2% maintenance margin for nonexempt accounts.
- Permit dealers to take a capital charge in lieu collecting margin from accounts for net mark-to-market losses
…
Rule 18f-4 Derivatives Transactions Recap
By Perkins Coie
This post completes our exploration of the definition of “derivatives transactions” in Rule 18f-4, which is relevant to business development companies, closed-end funds and open-end funds other than a money market fund (“Funds”). Our object is to generate a fairly comprehensive list of what is, is not, and may be a “derivatives transaction”…
Transactions that Are “Derivatives Transactions” under Rule 18f-4
By Perkins Coie
By Stephen A. Keen and Andrew P. Cross
In this post, we continue our exploration of the definition of “derivatives transaction” in new Rule 18f-4, which is relevant to business development companies, closed-end funds and open-end funds other than a money market fund (“Funds”). Our last post discussed examples of derivatives that fall…
Derivatives that Are Not “Derivatives Transactions” under Rule 18f-4
By Perkins Coie
By Stephen A. Keen & Andrew P. Cross
In this, the twelfth installment of our review of the compliance requirements of new Rule 18f‑4, we leave the peripheral transactions addressed in the rule (i.e., delayed-delivery transactions, reverse repurchase agreements, and unfunded commitment agreements) and plunge into the core of the rule: “derivatives…
Compliance Checklist for Unfunded Commitment Agreements
By Perkins Coie
By Stephen A. Keen & Andrew P. Cross
This eleventh installment of our review of the compliance requirements of new Rule 18f‑4 as it applies to business development companies, closed-end funds and open-end funds other than money market funds (“Funds”) completes our discussion of unfunded commitment agreements. Here we consider what changes may be required…
Identifying Unfunded Commitment Agreements
By Perkins Coie
By Stephen A. Keen and Andrew P. Cross
This is the tenth installment of our review of the compliance requirements of new Rule 18f‑4 as it applies to business development companies, closed-end funds and open-end funds other than a money market fund (“Funds”). We have previously discussed the asset sufficiency risk posed by unfunded commitment…
Unfunded Commitment Agreements under Rule 18f-4: The Last Vestige of Release 10666
By Perkins Coie
By Stephen A. Keen & Andrew P. Cross on March 4, 2021
This is the ninth installment of our review of the compliance requirements of new Rule 18f‑4. Our last post explained why unfunded commitment agreements present asset sufficiency risk but did not create leverage risk. In this post, we will explain how paragraph (e)…
FINRA and CFTC Staff Issue COVID-19 Advisories on Commodity-Linked ETPs and Funds
FINRA and the CFTC each issued recent advisories on commodity-linked exchange traded products. Directed at retail investors and broker-dealers, the advisories each highlighted certain issues unique to commodity-linked exchange traded products that were recently demonstrated by market reactions to fluctuating oil prices caused by the COVID-19 pandemic. The advisories provided guidance on relevant considerations in…
FINRA Issues Notice Regarding Business Continuity Planning During COVID-19 Outbreak
On March 9, 2020, FINRA released Regulatory Notice 20-08 (the “Regulatory Notice”) providing guidance and limited relief to its member broker-dealers during the COVID-19 pandemic. In particular, the Regulatory Notice requests that broker-dealers evaluate their compliance with FINRA Rule 4370, which requires broker-dealers to create, maintain, and update upon any material change, BCPs (Business…