CFTC Meeting Nov 3 at 10:30: Forwards, Residual Interest and Recordkeeping

There are three topics on the CFTC agenda.  The call-in details are available in the links to the CFTC’s event releases below.

  1. Forward Contracts with Embedded Optionality: Clarify the CFTC’s interpretation of when an agreement, contract, or transaction that contains embedded volumetric optionality falls within the forward exclusion from being considered a “swap”.
  2. Residual Interest Deadline: Clarify the deadline for when “residual interest” must be posted by FCMs. The deadline will become 6:00 pm on the settlement date as of November 14, 2014. The CFTC will consider clarifying that the deadline will not be moved earlier than 6:00 pm without CFTC action and an opportunity for public comment.
  3. Rule 1.35 Recordkeeping Requirements: Conform the text of CFTC regulation 1.35 to no-action relief already granted by CFTC staff.  The current no-action relief under Rule 1.35 is as follows:

See CFTC Staff No-Action Letter No. 14-60, issued on April 25, 2014 by the Division of Swap Dealer and Intermediary Oversight and the Division of Market Oversight, available at:  http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/14-60.pdf (Extends no-action relief for CTAs that are members of SEFs and DCMs from compliance with Rule 1.35(a)’s oral recordkeeping requirement until December 31, 2014).

See CFTC No-Action Letter No. 14-72, issued on May 22, 2014 by the Division of Swap Dealer and Intermediary Oversight and the Division of Market Oversight, available at: http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/14-72.pdf (Grants a temporary exemption to members of SEFs and DCMs that are not registered, or required to be registered, with the Commission from Rule 1.35(a)’s written recordkeeping requirements to keep electronic text messages and to keep records in a form and manner identifiable and searchable by transaction).

Click here for the CFTC press release.

Click here for the CFTC event announcement.

Click here for Chairman Massad’s Statement.