Position Limits Regulation - Comment Letters

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Agricultural Swaps
Key Pages	Summary	Related Documents / Meetings	Key Dates
Agricultural Swaps Regulation Comment Letters White Papers Hearings & Testimony Agricultural Commodities Definition Regulation Swaps Regulation Swaps Definitions Regulation	On August 4, 2011, the CFTC held an open meeting to discuss three final rulemakings under the Dodd-Frank Act. Among the rules approved at the meeting was a final rule regarding agricultural swaps. Summary of the final rule, which will repeal and replace CEA Part 35, generally permitting the transaction of swaps in an agricultural commodity subject to all rules and regulations applicable to any other swap: New Part 35 will permit the transaction of swaps in an agricultural commodity subject to all provisions of the CEA – and any rule, regulation, or order thereunder – applicable to all other swaps. New Part 35 will also explicitly provide that swaps in an agricultural commodity may transact on a swap execution facility (SEF) and/or Designated Contract Market Regulation\|designated contract market]] (DCM) to the same extent that any other swap may transact on a SEF and/or DCM. At the August 4 meeting, the Commission only finalized the agricultural swaps piece of the proposed rules (repealing and replacing Part 35). The commodity options final rule was approved at a CFTC Open Meeting, April 18, 2012. more>	CFTC Final Rule: Agricultural Swaps CFTC Final Rule: Commodity Options Proposed Rule on Agricultural Swaps and Commodity Options Agricultural Commodities Definition Regulation Agricultural Swaps Regulation - ANPRM CFTC Open Meeting, April 18, 2012 CFTC Open Meeting, August 4, 2011 CFTC Open Meeting, July 7, 2011 CFTC Open Meeting, January 20, 2011 CFTC Open Meeting, October 19, 2010	Key dates vary. Click here to view all timelines.

Algorithmic Descriptions
Key Pages	Summary	Related Documents / Meetings	Key Dates
Algorithmic Descriptions Regulation Comment Letters White Papers Hearings & Testimony	On April 7, 2011, the CFTC and the SEC released a joint study on algorithmic derivatives descriptions. After conducting its analysis, which included meetings with industry leaders, regulators, and academics, as well as comments submitted by the public, the staff offered conclusions. more>	Algorithmic Descriptions Regulation - White Paper - CFTC/SEC: Joint Study on the Feasibility of Mandating Algorithmic Descriptions for Derivatives - April 7, 2011	Proposal Date: December 9, 2010 Comment Deadline: December 31, 2010 Study Issued: April 7, 2011

Asian Swaps
Key Pages	Summary	Related Documents / Meetings	Key Dates
Asian Swaps Regulation Comment Letters White Papers Hearings & Testimony Swaps Regulation	In 2010, Singapore (Singapore Exchange Limited), China (Shanghai Clearing House), and India (Clearing Corporation of India) launched their own central counterparty clearing houses (CCPs) in order to regulate the derivatives market. Japan, Hong Kong, Korea, and Taiwan have created task forces to study setting up CCPs. more>

Asset-Backed Securities
Key Pages	Summary	Related Documents / Meetings	Key Dates
Asset-Backed Securities Regulation Comment Letters White Papers Hearings & Testimony	At an open meeting on January 20, 2011, the SEC finalized rules requiring an issuer of asset-backed securities (ABS) to "perform a review of the assets underlying the ABS and disclose information relating to the review." Rules regarding shelf eligibility conditions for asset-backed securities were re-proposed on July 26, 2011. On October 13, 2010, the SEC adopted an interim final temporary Rule 13Aa-2T concerning the reporting of security-based swap data. Also introduced at this meeting was a new proposed rule to "mitigate conflicts of interest at security-based swap clearing agencies, security-based swap execution facilities, and national security exchanges that post or make available for trading security-based swaps." more>		Key dates vary. Click here to view all timelines.

Commodity Pool Operator
Key Pages	Summary	Related Documents / Meetings	Key Dates
Commodity Pool Operator Regulation Comment Letters White Papers Hearings & Testimony	Among the provisions of the Dodd-Frank Act are several requirements affecting commodity trading advisors (CTAs), commodity pool operators (CPOs) and investment advisors to private funds. The Securities and Exchange Commission submitted a proposed rule on systemic risk reporting requirements for private fund advisers including hedge funds, CPOs and CTAs in February 2011; the rules became finalized in October 2011. The Commodity Futures Trading Commission participated in the joint rulemaking with the SEC on the reporting requirements, and also proposed its own rules on certain compliance aspects for CPOs and CTAs. These rules were finalized in February 2012. more>	CFTC Final Rule: Registration and Compliance Obligations for Commodity Pool Operators and Commodity Trading Advisors SEC Final Rule: Reporting by Investment Advisers to Private Funds and Certain Commodity Pool Operators and Commodity Trading Advisors on Form PF Private Fund Systemic Risk Reporting Regulation Commodity Trading Advisor Regulation Hedge Fund Regulation Form PF	Final Rule Issue: February 9, 2012 Effective Date: July 2, 2012 Compliance Date: December 2012

Commodity Trading Advisor
Key Pages	Summary	Related Documents / Meetings	Key Dates
Commodity Trading Advisor Regulation Comment Letters White Papers Hearings & Testimony	Among the provisions of the Dodd-Frank Act are several requirements affecting commodity trading advisors (CTAs), commodity pool operators (CPOs) and investment advisors to private funds. The Securities and Exchange Commission submitted a proposed rule on systemic risk reporting requirements for private fund advisers including hedge funds, CPOs and CTAs in February 2011; the rules became finalized in October 2011. The Commodity Futures Trading Commission participated in the joint rulemaking with the SEC on the reporting requirements, and also proposed its own rules on certain compliance aspects for CPOs and CTAs. These rules were finalized in February 2012. more>	CFTC Open Meeting, January 26, 2011 SEC Open Meeting, January 25, 2011 Private Fund Systemic Risk Reporting Regulation Commodity Trading Advisor Regulation Hedge Fund Regulation Form PF Futures Commission Merchant Regulation	Final Rule Issue: February 9, 2012 Effective Date: July 2, 2012 Compliance Date: December 2012

Derivatives Clearing Organizations
Key Pages	Summary	Related Documents / Meetings	Key Dates
Derivatives Clearing Organizations Regulation Comment Letters White Papers Hearings & Testimony	The CFTC approved its first set of final DCO rules related to the Dodd-Frank Act at its October 18, 2011 open meeting. The final rules cover these five proposed rules: Requirements for Processing, Clearing, and Transfer of Customer Positions Risk Management Requirements for Derivatives Clearing Organizations General Regulations and Derivatives Clearing Organizations Information Management Requirements for Derivatives Clearing Organizations Financial Resources Requirements for Derivatives Clearing Organizations more>	CFTC Final Rule: Process for Review of Swaps for Mandatory Clearing CFTC Final Rule: Derivatives Clearing Organization General Provisions and Core Principles CFTC Open Meeting, July 19, 2011 CFTC Open Meeting, October 18, 2011 Swap Entities Regulation Swaps Review Regulation Chart: Reporting, Recordkeeping, Public Information and Information Sharing Requirements for DCOs	Key dates vary. Click here to view all timelines.

Designated Contract Market
Key Pages	Summary	Related Documents / Meetings	Key Dates
Designated Contract Market Regulation Comment Letters White Papers Hearings & Testimony Swaps Definitions Regulation Swap Execution Facilities Regulation	At an open meeting on May 10, 2012, the CFTC finalized rules, guidance and acceptable practices under Dodd-Frank Act that, among other things, amend Section 5 of the Commodity Exchange Act ("CEA") concerning designation and operation of contract markets, and add a new CEA Section 2(h)(8) to include the listing, trading and execution of swaps on designated contract markets. The rules were originally proposed on December 1, 2010. more>	CFTC Final Rule: Provisions Common to Registered Entities Federal Register: Core Principles and Other Requirements for Designated Contracts Markets CFTC Open Meeting, May 10, 2012 CFTC Proposed Rule: Process for a Designated Contract Market or Swap Execution Facility to Make a Swap Available to Trade	Key dates vary. Click here to view all timelines.

Disruptive Trading Practices
Key Pages	Summary	Related Documents / Meetings	Key Dates
Disruptive Trading Practices Regulation Comment Letters White Papers Hearings & Testimony	At an open meeting on February 24, 2011, the CFTC proposed an interpretive order regarding disruptive trading practices. The proposal defines as disruptive any practice that: violates bids or offers; demonstrates intentional or reckless disregard for orderly execution; or is of the character of, or is commonly known to the trade as, “spoofing” (bidding or offering with the intent to cancel the bid or offer before execution). more>	CFTC Open Meeting, October 26, 2010 CFTC Open Meeting, February 24, 2011 Federal Register: Proposed Interpretive Order on Disruptive Trading Practices Market Manipulation Regulation	Proposal Date: March 18, 2011 Comment Deadline: May 17, 2011 Final Rule Issue: First Qtr. 2012

Dodd-Frank Act
Key Pages	Summary	Related Documents / Meetings	Key Dates
Dodd-Frank Act Comment Letters White Papers Hearings & Testimony	The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), named after Senate Banking Committee Chairman Chris Dodd and Chairman of the House Financial Services Committee Barney Frank, was signed into law by President Barack Obama on July 21, 2010. more>	Goldman Sachs Global Markets Institute: Effective Regulation, Parts 1-5 SEC: Organizational Study and Reform CFTC Office of the Inspector General - Dodd-Frank Cost-benefit Analyses - April 15, 2011 FSOC - White Papers	Proposal Date: December 2, 2009 Passed U.S. House of Representatives: December 11, 2009 Passed U.S. Senate: May 20, 2010 Final Law: July 21, 2010

End-User Exception to Mandatory Clearing
Key Pages	Summary	Related Documents / Meetings	Key Dates
End-User Exception to Mandatory Clearing Comment Letters White Papers Hearings & Testimony Interpretive Guidance on Product Definitions - Summary Table	The Dodd-Frank Act requires, among other things, that the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC), create and implement rules regarding mandatory clearing of swaps transactions. A major topic of contention has been whether end-users should be granted an exception to the Dodd-Frank requirement for mandatory clearing of swap transactions. more>	Swaps Review Regulation SEC Open Meeting, December 15, 2010 CFTC Open Meeting, December 9, 2010 Federal Register: End-User Exception to Mandatory Clearing of Swaps Federal Register: End-User Exception to Mandatory Clearing of Security-Based Swaps	Key dates vary. Click here to view all timelines.

European Swaps
Key Pages	Summary	Related Documents / Meetings	Key Dates
European Swaps Regulation Comment Letters White Papers Hearings & Testimony Swaps Regulation	The major institutions in charge of designing and implementing swaps regulation in Europe are the Financial Services Authority (FSA), International Organization of Securities Commissions (IOSCO), Futures and Options Association (FOA), the European Commission, and the European Securities and Markets Authority (ESMA). more>	European Credit Default Swap Regulation FSA (UK) European Securities and Markets Authority Swaps Regulation - White Paper - European Central Bank - Credit Default Swaps and Counterparty Risk - August 2009 Corporate Governance Regulation European Securities Regulation - UCITS - July 9, 2009

Executive Compensation
Key Pages	Summary	Related Documents / Meetings	Key Dates
Executive Compensation Regulation Comment Letters White Papers Hearings & Testimony	On March 2, 2011, the Securities and Exchange Commission (SEC) proposed rules regarding incentive-based compensation arrangements under the Dodd-Frank Act. The regulation would require incentive-based compensation annual reports, enforce new compliance procedures and add a threshold of $50 billion for certain institutions. Final rules concerning shareholder approval of executive compensation and golden parachute compensation were adopted on January 25, 2011. more>	SEC Open Meeting, January 25, 2011 SEC Open Meeting, March 2, 2011 SEC Open Meeting, March 30, 2011 Shareholder Approval of Executive Compensation and Golden Parachute Compensation Listing Standards for Compensation Committees Incentive-Based Compensation Arrangements	Key dates vary. Click here to view all timelines.

Futures Commission Merchant
Key Pages	Summary	Related Documents / Meetings	Key Dates
Futures Commission Merchant Regulation Comment Letters White Papers Hearings & Testimony Comparison Chart – Regulation 1.25, Current vs Proposed Changes	In accordance with Title VII of the Dodd-Frank Act, the CFTC has issued several rulemakings and proposed rule changes affecting or involving activities of futures commission merchants (FCMs). A final rule regarding the investment of customer funds was approved at the commission's December 5, 2011 open meeting. Additionally, at its January 11, 2012 open meeting, the CFTC approved its final rules on the protection of cleared swaps customer collateral in the case of a broker bankruptcy. Finally, at its February 23, 2012 open meeting, the CFTC approved its final rules on certain internal business conduct standards for swap dealers, major swap participants and futures commission merchants. These rules include conflicts of interest and compliance responsibilities. more>	CFTC Open Meeting, April 27, 2011 CFTC Open Meeting, December 5, 2011 CFTC Final Rule: Investment of Customer Funds by Futures Commission Merchants and Derivatives Clearing Organizations A Layman's Guide to Regulation 1.25 Federal Register:Required Compliance Policies Federal Register: Protection of Cleared Swaps Customers Before and After Commodity Broker Bankruptcies Protection of Cleared Swaps Customer Contracts and Collateral; Conforming Amendments to the Commodity Broker Bankruptcy Provisions	Key dates vary. Click here to view all timelines

FX Swaps
Key Pages	Summary	Related Documents / Meetings	Key Dates
FX Swaps Regulation Comment Letters White Papers Hearings & Testimony	The Dodd-Frank Act requires most swaps to be traded on an exchange or on a similar system and then guaranteed by a clearinghouse, where the parties would be required to post collateral. However, the act allows the Secretary of the Treasury to make a final determination as to whether foreign exchange transactions should be granted an exemption from the Dodd-Frank definition of swaps. more>	Off-Exchange Forex Regulation	Proposal Date: October 28, 2010 Comment Deadline: November 29, 2010 Proposed Determination: April 29, 2011 Final Rule Issue: July 2011

Hedge Funds
Key Pages	Summary	Related Documents / Meetings	Key Dates
Hedge Fund Regulation Comment Letters White Papers Hearings & Testimony Investment Advisers Regulation Private Fund Systemic Risk Reporting Regulation Commodity Pool Operator Regulation Family Office Definition	As mandated by Title IV of the Dodd-Frank Act, the SEC and CFTC have been tasked with creating a framework for the registration and systemic risk mitigation of hedge funds and other private funds. Additionally, the SEC is charged with rulemaking authority for Investment Advisers, and exemption thresholds for family offices, accredited investors, and venture capital funds. Information from systemically significant private funds will be shared with regulators, and the Financial Stability Oversight Council (FSOC). As of December 2011, five rulemakings have been finalized, including: Implementing Amendments to the Investment Advisers Act - Hedge Fund Registration, Registration and Reporting Exemptions, SEC final rule on private fund systemic risk reporting, and Family Offices Net Worth Standard for Accredited Investors more>	SEC Final Rule: Exemptions for Advisers to Venture Capital Funds, Private Fund Advisers With Less Than $150 Million in Assets Under Management, and Foreign Private Advisers SEC Final Rule: Rules Implementing Amendments to the Investment Advisers Act of 1940 SEC Final Rule: Family Offices SEC Final Rule: Net Worth Standard for Accredited Investors SEC Final Rule: Reporting by Investment Advisers to Private Funds and Certain Commodity Pool Operators and Commodity Trading Advisors on Form PF SEC Open Meeting, June 22, 2011 SEC Open Meeting, October 26, 2011 Form PF	Key dates vary. Click here to view all timelines.

High Frequency Trading
Key Pages	Summary	Related Documents / Meetings	Key Dates
High Frequency Trading Regulation Comment Letters White Papers Hearings & Testimony	In the wake of the "Flash Crash" of May 6, 2010, the SEC and CFTC formed a joint committee to study emerging regulatory issues. Its conclusions and recommendations, which were released on February 18, 2011, included several areas addressing HFT, including: the implementation of minimum quoting requirements by market makers; restrictions on co-location and direct access; liquidity rules such as penalties for rapid order cancellation; and a request for further study and potential regulatory changes. more>	CFTC Open Meeting, October 26, 2010 CFTC Open Meeting, February 24, 2011 Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues - White Paper - Recommendations Regarding Regulatory Response to the Market Events of May 6, 2010 - February 18, 2011 Disruptive Trading Practices Regulation	Proposal Date: March 18, 2011 Comment Deadline: May 17, 2011 Final Rule Issue: First Qtr. 2012

Investment Advisers
Key Pages	Summary	Related Documents / Meetings	Key Dates
Investment Advisers Regulation Comment Letters White Papers Hearings & Testimony	The SEC meeting on June 22, 2011 finalized rules concerning amendments to the Investment Advisers Act of 1940, as well as registration exemptions for reporting by certain investment advisers. An SEC notice concerning investment adviser performance compensation regulation was published on May 10, 2011. The comment deadline for this proposal is July 11, 2011. more>		Key dates vary. Click here to view all timelines.

Margin and Capital Requirements
Key Pages	Summary	Related Documents / Meetings	Key Dates
Covered Swap Entities Regulation - Margin and Capital Requirements Covered Swap Entities Regulation - Comment Letters Swap Dealers and Major Swap Participants Regulation Swap Dealers and Major Swap Participants Regulation - Capital Requirements - Comment Letters Swap Dealers and Major Swap Participants Regulation - Margin Requirements for Uncleared Swaps - Comment Letters	One of the mandates of Title I of the Dodd-Frank Act is that the appropriate regulators develop a framework for swap dealers and major swap participants, which would include the setting of margin and capital requirements. Entities under the jurisdiction of a prudential regulator such as the FDIC would follow its rules. All other swaps would be under the jurisdiction of the CFTC and SEC. For more information, see the summary table of swaps definitions. more>	CFTC Open Meeting, April 12, 2011 CFTC Open Meeting, April 27, 2011 Federal Register: Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants Capital Requirements of Swap Dealers and Major Swap Participants Prudential Regulators	Proposal Date: April 12, 2011 Comment Deadline: July 11, 2011 Final Rule Issue: First Qtr. 2012

Market Manipulation
Key Pages	Summary	Related Documents / Meetings	Key Dates
Market Manipulation Regulation Comment Letters White Papers Hearings & Testimony Disruptive Trading Practices Regulation	Section 753 of the Dodd-Frank Act gives the Commodity Futures Trading Commission (CFTC) and U.S. Securities and Exchange Commission (SEC) the authority to monitor and enforce "manipulative and deceptive" practices in the swaps, security-based swaps, and commodities markets. The rules are intended to mirror the SEC's Rule 10b-5, a powerful regulation used to combat fraud and manipulation in securities markets. more>	CFTC Final Rule: Anti-Manipulation and Anti-Fraud High Frequency Trading Regulation CFTC Open Meeting, October 26, 2010 CFTC Open Meeting, July 7, 2011 SEC Open Meeting, November 3, 2010	Proposal Date: March 18, 2011 Final Rule Issued: July 14, 2011 Effective Date August 15, 2011

Off-Exchange Forex
Key Pages	Summary	Related Documents / Meetings	Key Dates
Off-Exchange Forex Regulation Comment Letters White Papers Hearings & Testimony Futures Commission Merchant Regulation	On September 10, 2010, the CFTC approved its final rules regarding off-exchange retail foreign exchange transactions. Although the rulemaking pre-dated the Dodd-Frank Act, once the Act was signed in July, 2010, the commission's forex rules, along with the forex rules of other regulatory authorities, became a part of Dodd-Frank. Under Dodd-Frank, the CFTC will have jurisdiction over retail foreign exchange transactions, except in the case of entities which fall under the authority of one of the following regulatory agencies ("Prudential Regulators"): Office of the Comptroller of the Currency, Treasury (OCC); Board of Governors of the Federal Reserve System (Fed); Federal Deposit Insurance Corporation (FDIC); Farm Credit Administration (FCA); and Federal Housing Finance Agency (FHFA) The Act requires that such rules include appropriate requirements with respect to disclosure, record keeping, capital and margin, reporting, business conduct, documentation, and any other standards or requirements as Federal regulatory agencies shall determine to be necessary. more>	FX Swaps Regulation	Key dates vary. Click here to view all timelines.

Orderly Liquidation Authority
Key Pages	Summary	Related Documents / Meetings	Key Dates
Orderly Liquidation Authority Regulation Comment Letters White Papers Hearings & Testimony	In accordance with Title II of the Dodd-Frank Act, the FDIC is required to establish rules regarding the orderly liquidation in case of a default of a "covered financial company," which is defined as financial company that poses significant risk to the financial stability of the United States. The Act outlines the process for the orderly liquidation of such a covered financial company following the FDIC’s appointment as receiver and provides for additional implementation of the orderly liquidation authority (OLA) by rulemaking. more>	CFTC Open Meeting, January 13, 2011 CFTC Open Meeting, January 20, 2011 FSOC Proposed Rule: Assessment of Fees on Large Bank Holding Companies and Nonbank Financial Companies Supervised by the Federal Reserve Board to Cover the Expenses of the Financial Research Fund Federal Register: Orderly Liquidation Termination Provision in Swap Trading Relationship Documentation for Swap Dealers and Major Swap Participants FDIC Final Rule: Certain Orderly Liquidation Authority Provisions under Dodd-Frank Act FDIC Proposed Rule: Calculation of Maximum Obligation Limitation	Key Dates vary. Click here to view all timelines

Position Limits
Key Pages	Summary	Related Documents / Meetings	Key Dates
Position Limits Regulation Comment Letters White Papers Hearings & Testimony	Position limits are intended to protect futures markets from excessive speculation that could cause unreasonable or unwarranted price fluctuations and are sometimes referred to as "speculative position limits", or "speculative limits". The Commodity Exchange Act (CEA) authorized the CFTC to impose limits on the size of speculative positions in futures markets. more>	CFTC Final Rule: Position Limits for Futures and Swaps CFTC Open Meeting, December 16, 2010 CFTC Open Meeting, January 13, 2011 CFTC Open Meeting, October 18, 2011 Federal Register: Position Limits for Derivatives CFTC Final Rule: Large Trader Reporting Federal Register: Position Reports for Physical Commodity Swaps	Interim and Final Rule: November 18, 2011 Comment Deadline: January 17, 2012 Effective Date: January 17, 2012

Swap Data
Key Pages	Summary	Related Documents / Meetings	Key Dates
Swap Data Regulation Comment Letters White Papers Hearings & Testimony	Among the mandates of the Dodd-Frank Act are requirements that regulatory agencies such as the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) create a framework for the transmission, submission, and storage of swap data. As of December 20, 2011, the CFTC had finalized three swap data rulemakings - Registration and Regulation of Swap Data Repositories, Swap Data Recordkeeping and Reporting Requirements and Real-Time Public Reporting of Swap Transaction Data. The SEC has issued two rule proposals regarding the security-based swap data repositories (SDRs) and the reporting and dissemination of swap data through Regulation SBSR. Neither rulemaking has been finalized. more>	CFTC Final Rule: Registration and Regulation of Swap Data Repositories CFTC Open Meeting, December 20, 2011 CFTC Open Meeting, August 4, 2011 Swap Execution Facilities Regulation CFTC Final Rule: Real-Time Public Reporting of Swap Transaction Data CFTC Final Rule: Swap Data Recordkeeping and Reporting Requirements CFTC Proposed Interpretive Statement: Swap Data Repository Confidentiality and Indemnification	Key dates vary. Click here to view all timelines.

Swap Dealers and Major Swap Participants
Key Pages	Summary	Related Documents / Meetings	Key Dates
Swap Dealers and Major Swap Participants Regulation Comment Letters White Papers Hearings & Testimony	The CFTC has issued rule proposals under Dodd-Frank regarding swap dealers (SDs) and major swap participants (MSPs) at six different meetings in 2010 and 2011. The issues discussed were: duties; registration; conflicts of interest; required compliance policies; reporting and recordkeeping; further defining “swap dealer,” “major swap participant” and “eligible contract participant”; business conduct standards, confirmation; confirmation, reconciliation and compression; swap trading relationship documentation; orderly liquidation termination; and margin requirements for uncleared swaps. In late 2011, the commission began issuing final rules pertaining to SD/MSPs. Topics for which a final rulemaking has been issued can be found in the alert box at the top of the page. Summaries and links can also be found below. more>	CFTC Open Meeting, November 10, 2010 CFTC Open Meeting, December 1, 2010 CFTC Open Meeting, December 9, 2010 CFTC Open Meeting, December 16, 2010 CFTC Open Meeting, January 13, 2011 CFTC Open Meeting, January 20, 2011 CFTC Office of the Inspector General - Dodd-Frank Cost-benefit Analyses - April 15, 2011 Definitions of Swap-Related Terms Registered Swap Entities	Key dates vary. Click here to view all timelines.

Swap Entities
Key Pages	Summary	Related Documents / Meetings	Key Dates
Swap Entities Regulation Comment Letters White Papers Hearings & Testimony Swap Execution Facilities Regulation Derivatives Clearing Organizations Regulation Designated Contract Market Regulation Covered Swap Entities Regulation - Margin and Capital Requirements	Swaps regulation is part of the Dodd-Frank Act and has fallen under the jurisdiction of various regulatory agencies such as the CFTC and the SEC. Other agencies are also addressing swap execution facilities such as the Financial Services Authority (FSA) and European Commission. Among the proposed rules and rule changes, many are written to specifically address a certain type of swap entity, such as a swap execution facility (SEF), designated contract market (DCM), derivatives clearing organization (DCO) or swap data repository (SDR). more>	SEC Open Meeting, October 13, 2010 CFTC Open Meeting, December 9, 2010 CFTC Open Meeting, April 27, 2011 CFTC Open Meeting, July 19, 2011 CFTC Final Rule: Provisions Common to Registered Entities Governance Requirements Federal Register: Clearing Agency Standards for Operation and Governance	Key dates vary. Click here to view all timelines.

Swap Execution Facilities
Key Pages	Summary	Related Documents / Meetings	Key Dates
Swap Execution Facilities Regulation Comment Letters White Papers Hearings & Testimony	Swap execution facilities (SEFs) were given life by the Dodd-Frank Act, which requires over-the counter (OTC) swaps to be cleared and traded on this new type of regulated platform. Any swap that clears must trade on an exchange or an SEF. This regulation has fallen under the jurisdiction of various regulatory agencies such as the CFTC and the SEC. Other agencies are also addressing swaps execution facilities such as the Financial Services Authority (FSA) and European Commission. more>	Federal Register: Core Principles and Other Requirements for Swap Execution Facilities CFTC Open Meeting, December 9, 2010 CFTC Open Meeting, December 16, 2010 CFTC Open Meeting, December 5, 2011 CFTC Proposed Rule: Process for a Designated Contract Market or Swap Execution Facility to Make a Swap Available to Trade Swap Execution Facilities - A Comparison of CFTC and SEC Rule Proposals Registered Swap Entities	Key dates vary. Click here to view all timelines.

Swaps Definitions
Key Pages	Summary	Related Documents / Meetings	Key Dates
Swaps Definitions Regulation Comment Letters White Papers Hearings & Testimony	In accordance with the Dodd-Frank Act, the CFTC and the SEC, in consultation with the Board of Governors of the Federal Reserve System, have proposed rules and interpretative guidance under the Commodity Exchange Act (CEA) and the Securities Exchange Act of 1934 to further define the terms "swap dealer," "security-based swap dealer," "major swap participant," "major security-based swap participant," and "eligible contract participant." Under Dodd-Frank, the SEC will have jurisdiction over "security-based" swaps, and the CFTC will have jurisdiction over all other swaps, except for a category known as "mixed swaps" which may have both security-based and non-security-based components. For mixed swaps, the two agencies will have joint oversight responsibilities. Swaps definitions fall into two categories. "Entity definitions" detail which firms and individuals fall are considered to be subject to dealer and swap participant rules. "Product definitions" detail the types of transactions that are considered to be swaps, security-based swaps, and mixed swaps, and also which products may be exempt from agency oversight. more>	CFTC/SEC Joint Final Rule on Swap Entity Definitions CFTC Open Meeting, April 18, 2012 SEC Open Meeting, April 18, 2012 Swaps Definitions Regulation - Interpretive Guidance on Product Definitions - Summary Table [[Federal Register: Further Definition of “Swap Dealer,” “Security-Based Dealer,” “Major Swap Participant,” “Major Security-Based Swap Participant” and “Eligible Contract Participant.” Swaps Definitions Regulation - Stable Value Contracts	Proposal Date: December 22, 2010 Comment Deadline: February 22, 2011 Final Rule Issue: April 2012

Swaps Review
Key Pages	Summary	Related Documents / Meetings	Key Dates
Swaps Review Regulation Comment Letters White Papers Hearings & Testimony Swaps Regulation - End-User Exception to Mandatory Clearing	One of the provisions of the Dodd-Frank Act is an amendment to the Commodity Exchange Act that would prohibit swap transactions unless it were submitted to a Derivatives Clearing Organization (DCO) for clearing, or if the swap met one of the requirements for exemption. In separate meetings, the SEC and CFTC issued proposed rules regarding the process for review of swaps for mandatory clearing. more>	SEC Open Meeting, December 15, 2010 CFTC Open Meeting, July 19, 2011 CFTC Final Rule: Process for Review of Swaps for Mandatory Clearing Swaps Definitions Regulation - Interpretive Guidance on Product Definitions - Summary Table	Proposal Date: November 2, 2010 Final Rule Issue: July 26, 2011 Effective Date: September 26, 2011

Volcker Rule
Key Pages	Summary	Related Documents / Meetings	Key Dates
Volcker Rule Comment Letters Financial Stability Oversight Council	On October 12, 2011, the U.S. Securities and Exchange Commission (SEC), the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board, and the Office of the Comptroller of the Currency issued its proposed regulation to implement Section 619 of the Dodd-Frank Act, the so-called "Volcker Rule," which would prohibit banking entities from engaging in proprietary trading of derivatives and limit the ownership or sponsorship of hedge funds and other private funds to three percent of Tier 1 capital. The document proposes which entities will be subject to the prohibitions, and explains the types of financial transactions that will be exempt from the bans. The proposal seeks comment from the public and market participants on 394 questions on such topics as definitions of banking entities, exemptions, types of activities covered under the rule, and compliance considerations. The deadline for public comment was originally set for January 13, 2012, but on December 23, 2011, the House Financial Services Committee requested a 30-day extension to February 13, 2012. The Dodd-Frank Act mandates that the rule become effective on July 21, 2012, followed by a two-year compliance transition. more>	SEC Open Meeting, October 12, 2011 Commentary: Mining the Volcker Rule Hearing for Nuggets, January 18, 2012 CFTC Proposed Rule: Regarding Prohibitions and Restrictions on Proprietary Trading (Volcker Rule) FSOC - White Paper - Study & Recommendations Regarding Concentration Limits on Large Financial Companies - January 2011 Dodd-Frank Act - White Paper - J.P.Morgan Cazenove: Regulatory Arbitrage series: OW European over US IBs	Proposal Date: October 12, 2011 Comment Deadline: February 13, 2012 Final Rule Issue: July 2012

Whistleblower Provisions
Key Pages	Summary	Related Documents / Meetings	Key Dates
Whistleblower Provisions Regulation Comment Letters White Papers Hearings & Testimony	At an open meeting on August 4, 2011, the CFTC approved its final rule on its whistleblower program. The rule maintains the “discretionary power” of the Commission with regard to the amount awarded to informants. At an open meeting on May 25, 2011, the SEC issued its final rule under which the whistleblower, in order to be eligible, must "voluntarily provide the SEC with original information that leads to the successful enforcement by the SEC of a federal court or administrative action in which the SEC obtains monetary sanctions totaling more than $1 million.” more>	CFTC Open Meeting, August 4, 2011 SEC Open Meeting, May 25, 2011 CFTC Final Rule: Whistleblower Incentives and Protection SEC Final Rule: Securities Whistleblower Incentives and Protections Whistleblower Provisions Regulation Proposed Rules - CFTC and SEC Shareholder Approval of Executive Compensation and Golden Parachute Compensation	Key dates vary. Click here to view all timelines.

Organizations

European Securities and Markets Authority (ESMA)
Key Pages	Summary	Related Documents	Meetings
ESMA	The European Securities and Markets Authority (ESMA) is an independent European Union regulatory agency that oversees European securities trading across all of the EU member states. ESMA was established on January 1, 2011, and replaces the Committee of European Securities Regulators (CESR). Steven Maijoor is currently the chairman of the European Securities and Markets Authority (ESMA); he was named to the position on January 13, 2011. more>	Regulation Establishing ESMA

Federal Deposit Insurance Corporation (FDIC)
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FDIC Orderly Liquidation Authority Regulation	The Federal Deposit Insurance Corporation (FDIC) was created by Congress though the Glass-Steagall Act in 1933 in response the frequent bank failures of the 1920s and early 1930s. As an independent agency, the FDIC is charged with maintaining stability in the U.S. financial system by insuring deposits, supervising financial institutions and managing receiverships. Additionally, one of the provisions of the Dodd-Frank Act required the FDIC to establish rules regarding the orderly liquidation of any systemically important financial company encountering a default. more>	Orderly Liquidation Authority Regulation - Comment Letters Federal Register: Orderly Liquidation Termination Provision in Swap Trading Relationship Documentation for Swap Dealers and Major Swap Participants Off-Exchange Forex Regulation Off-Exchange Forex Regulation - Comment Letters Swap Dealers and Major Swap Participants Regulation - Swap Trading Relationship Documentation Requirements - Comment Letters

Financial Stability Oversight Council (FSOC)
Key Pages	Summary	Related Documents	Meetings
FSOC FSOC White Papers	As established under Title I of the Dodd-Frank Act, the Financial Stability Oversight Council (FSOC) provides, for the first time, comprehensive monitoring to ensure the stability of our nation's financial system. It was passed by the House Financial Services Committee on December 2, 2009 to put an end to “too big to fail” financial firms. It was created as a nine-member council, led by the Treasury secretary, to look out for systemic risks. The FSOC will subject to Fed oversight any nonbank financial companies whose financial distress would pose risks to the financial stability of the United States.more>	Macroeconomic Effects of Risk Retention Requirements Study & Recommendations Regarding Concentration Limits on Large Financial Companies Study & Recommendations on Prohibitions on Proprietary Trading & Certain Relationships with Hedge Funds & Private Equity Funds	October 1, 2010 November 23, 2010 January 18, 2011 March 17, 2011

Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues
Key Pages	Summary	Related Documents	Meetings
Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues SEC CFTC	The Advisory Committee on Emerging Regulatory Issues was created on May 11, 2010, five days after the so-called "flash crash" on May 6, 2010, when a single trader mistakenly entered a "sell" order of CME Group's e-Mini S&P 500 futures worth $4.1 billion. The order triggered a frenzy of high frequency trading activity that briefly saw the Dow Jones Industrial Average break 700 points in a matter of minutes. While the market stabilized quickly once the error was discovered, the incident highlighted the potential liquidity problems associated with high speed trading. more>	White Papers Recommendations Regarding Regulatory Response to the Market Events of May 6, 2010	May 24, 2010 June 22, 2010 August 11, 2010 November 5, 2010 February 18, 2011

U.K. Financial Services Authority (FSA)
Key Pages	Summary	Related Documents	Meetings
FSA	The Financial Services Authority (FSA) is an independent non-governmental body that regulates the financial services industry in the UK. Established by Gordon Brown in 1997 when the Labour party came into power, the FSA was granted statutory powers by the Financial Services and Markets Act of 2000. The FSA is accountable to Treasury Ministers and, by extension, Parliament. The FSA receives no government funding and is financed by the firms it regulates. more>

U.S. Consumer Financial Protection Bureau (CFPB)
Key Pages	Summary	Related Documents	Meetings
CFPB Dodd-Frank Act	Established by Title X of the Dodd-Frank Act, the Consumer Financial Protection Bureau (CFPB) will conduct rule-making and enforcement of consumer financial protection laws, promote financial education and monitor financial markets that affect consumers. Many parts of the Dodd-Frank Act relating to the CFPB are planned to go into effect on July 21, 2011. Treasury Secretary Timothy Geithner is charged with creating the CFPB. On September 17, 2010, Elizabeth Warren was named Assistant to the President and Special Advisor to the Secretary of the Treasury on the CFPB. On July 17, 2011, Richard Cordray was nominated as Director of the CFPB, having formerly served as head of the enforcement division at the agency. more>	Video Overview Proposed Organizational Structure

U.S. Commodity Futures Trading Commission (CFTC)
Key Pages	Summary	Related Documents	Meetings
CFTC Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues	The mission of the Commodity Futures Trading Commission (CFTC) is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and options markets. more>		October 1, 2010 October 1, 2010 October 19, 2010 October 26, 2010 November 10, 2010 November 19, 2010 December 1, 2010 December 9, 2010 December 16, 2010 January 13, 2011 January 20, 2011 January 26, 2011 February 24, 2011 April 12, 2011 April 27, 2011 June 14, 2011 July 7, 2011 July 19, 2011

U.S. Securities and Exchange Commission (SEC)
Key Pages	Summary	Related Documents	Meetings
SEC Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues	The U.S. Securities and Exchange Commission (SEC) is the U.S. regulatory agency charged with the oversight of securities markets and market participants in the U.S. Its mission is to protect investors, to maintain fair, orderly, and efficient markets, and to facilitate capital formation. Mary L. Schapiro is the current chairman of the SEC. more>	Organizational Study and Reform	October 13, 2010 November 3, 2010 November 19, 2010 December 3, 2010 December 15, 2010 January 20, 2011 January 25, 2011 February 2, 2011 February 9, 2011 March 2, 2011 March 30, 2011 April 27, 2011 May 18, 2011 May 25, 2011 June 15, 2011 June 22, 2011 June 29, 2011

Members of the U.S. Congress - March 5, 2012

Position Limits for Derivatives
March 5, 2012

From the comment letter:

"As the cost for American people to fill their gas tanks continues to skyrocket, the CFTC continues to drag its feet on imposing strict speculation limits to eliminate, prevent, or diminish excessive oil speculation as required by the Dodd-Frank Act. Although the CFTC has adopted initial position limits, they are not strong enough and not yet in force owing to industry opposition, delays in swaps oversight and data collection. This is simply unacceptable and must change."

"We have a responsibility to ensure that the price of oil is no longer allowed to be driven up by the same Wall Street speculators who caused the devastating recession that working families are now experiencing. That means that the CFTC must do what the law mandates and end excessive oil speculation once and for all."

ISDA & SIFMA - January 17, 2012

Position Limits for Derivatives
January 17, 2012

From the comment letter:

“We believe the Commission should withdraw the interim spot-month position limits on cash-settled Referenced Contracts until after it has collected and analyzed the data needed to make the statutorily required finding, and should then adopt any such limits only to the extent that it finds, upon a complete examination of that data, that:

excessive speculation exists in the markets for cash-settled Referenced Contracts,
limits on cash-settled Referenced Contracts are “necessary” to “diminish, eliminate, or prevent” the burden on interstate commerce caused by that excessive speculation, and
the imposition of position limits and levels of the limits imposed by the Commission are “appropriate.”

Intercontinental Exchange - January 17, 2012

Position Limits for Derivatives
January 17, 2012

From the comment letter:

“In the final rule, the Commission should retain the five to one limit for natural gas contracts. In addition, given the benefits of the Conditional Limit, the Commission should reconsider expanding the five to one limit to other commodities as considered in the proposed position limit rule.”

Futures Industry Association - January 17, 2012

Position Limits for Derivatives
January 17, 2012

In their comment letter, the FIA explains that:

The Commission should withdraw the Position Limits Rule, including the interim spot-month position limits on cash-settled Referenced Contracts, until after it has collected and analyzed the data needed to make the statutorily required finding that:
- Limits on cash-settled Referenced Contracts are “necessary” to “diminish, eliminate, or prevent” the burden on interstate commerce caused by excessive peculation; and
- If limits are necessary, then the limit levels imposed by the Commission are “appropriate.”
If the Commission does not withdraw the interim spot-month position limits on cash-settled Referenced Contracts, then, at a minimum, it should the steps outlined in their comment letter to reduce the adverse effects of the Position Limits Rule
The Commission should amend the definition of “swaption” and clarify the definition of the spot-month for cash-settled Referenced Contracts

CME Group - January 17, 2012

Position Limits for Derivatives
January 17, 2012

From the comment letter:

“A policy of higher spot-month limits for cash-settled contracts in any linked market is contrary to the longstanding joint policy of the Commission and the exchanges. Indeed, as the Commission notes in the Release, the Commission staff has historically deemed acceptable both for physical-delivery contracts and their cash-settled look-a-likes a spot-month limit of 25% of estimated deliverable supply. This is sound regulatory policy because for such linked contracts, any impact to physical supply is immediately translated to the physical contract settlement price by the laws of supply and demand, and necessarily to the settlement price of the cash-settled look-a-like given that it is settled to the physically-delivered contract. Similarly, activity in the cash settled linked market is immediately translated in the underlying core physically settled market.”

Working Group of Commercial Energy Firms - January 17, 2012

Position Limits for Derivatives
January 17, 2012

In their comment letter, the Working Group expresses their support for “appropriate regulation that brings transparency and stability to the swap markets.” More specifically, they write that:

The Commission should study and identify the size of cash markets for referenced contracts in energy commodities to avoid setting overly restrictive spot-month position limits
They support spot-month class limits for physically-delivered and cash-settled referenced contracts in energy commodities at a level no less than a 1:5 ratio
The 1:5 ratio for spot-month limits for cash-settled contracts has existed without causing disruption in certain energy markets

Futures Industry Association - March 25, 2011

Position Limits for Derivatives
March 25, 2011

The FIA suggests that "spot month position limits for Referenced Contracts should not be based solely on 25 percent of 'the quantity of the commodity meeting a derivative contract’s delivery specifications.' Rather, the Commission should take into account 'the individual characteristics' of each core referenced contract, including the different settlement options — such as EFPs — available for each contract, in setting spot month position limits." FIA further states that the Commission should:

define bona fide hedging transactions and positions more broadly so that they encompass long-standing and important commercial risk management practices
re-institute a process by which hedgers can seek exemptions for non-enumerated hedging transactions
exercise its exemptive authority to implement a process by which liquidity providers can obtain hedge exemptions from speculative position limits.

Managed Funds Association - March 28, 2011

Position Limits for Derivatives
March 28, 2011

MFA argues that:

The Commission’s proposed limits do not strike the right balance amongst the prescribed statutory goals of diminishing excessive speculation and deterring market manipulation, and ensuring sufficient market liquidity for bona fide hedgers and the price discovery function of the underlying market.
The Commission’s proposed changes to the disaggregation rules will result in unnecessary aggregation of independently controlled accounts, burden investors and investment managers, and potentially reduce liquidity in U.S. futures markets.
The Commission should restore the inter-commodity hedge and arbitrage exemptions that the Proposed Rules appear to have deleted, which are central to managing risk and maintaining balanced portfolios.

ISDA and SIFMA - March 28, 2011

Position Limits for Derivatives
March 28, 2011

ISDA and SIFMA argue that “the imposition of position limits of any kind are not supported by the legally required analysis of necessity and appropriateness. Thus, we recommend against the adoption of any limits until such an analysis establishes a legal basis for limits. Furthermore, we urge the Commission to refrain from imposing position limits unless and until its foreign counterparts impose comparable position limits on non-U.S. commodity markets, as raised by Dodd-Frank. If the Commission does adopt the Proposed Rules, we believe that substantial changes should be made to the proposed position limit regime to achieve the Commission’s objectives without unnecessarily disrupting or limiting the commodity markets.”

Goldman Sachs - March 28, 2011

Position Limits for Derivatives
March 28, 2011

Goldman Sachs offers their concerns about the Proposed Rules, stating that “the manner in which the Proposed Rules would apply limits to positions that are ‘concentrated’ when viewed in the unduly narrow context of belonging to a swap or futures ‘class,’ without giving effect to offsets across classes, will reduce liquidity for bonafide hedgers and will impair the price discovery process… Accordingly, it is our view that the costs and potentially disruptive effects of the Proposed Rules outweigh their potential benefits. If the Commission determines that it is necessary to impose position limits, we respectfully urge that it modify its approach by applying limits exclusively to spot month positions in contracts that may be physically-settled. To the extent that the Commission imposes limits on both futures and swaps, we recommend that it recognize offsets between such positions.”

Morgan Stanley - March 28, 2011

Position Limits for Derivatives
March 28, 2011

In their comment letter, Morgan Stanley suggests the Commission should:

defer consideration of position limits until after it has sufficient data about the size of the relevant markets and the positions held by market participants
define bona fide hedging transactions and positions more broadly to include long-standing and important risk management transactions, and retain a mechanism by which hedgers can obtain exemptions for non-enumerated hedging transactions
exercise its exemptive authority to establish a process by which liquidity providers can obtain exemptions from speculative position limits;
eliminate the limitation on holding a speculative position in a spot-month physical-delivery contract while holding a proposed conditional position in a spot-month cash-settled contract of up to five times the speculative limit
not condition, curtail or eliminate the availability of longstanding exemptions from the aggregation requirements based on the lack of control over trading.

Deutsche Bank - March 28, 2011

Position Limits for Derivatives
March 28, 2011

Deutsche Bank comments that:

Positions of affiliated entities that have independent trading strategies and decision making and have the proper procedures in place to wall off information should not be aggregated. The Commission should adopt rules that would permit a complex financial institution to disaggregate positions taken by its separately operated business units upon demonstrating that it employs policies, procedures, and physical barriers that separate management and flow of information.
Swap dealers' positions, entered into to hedge the dealers' exposure in the course of providing services to clients, should be exempt regardless of whether the client is a bona fide hedger or not
The presence of an intermediary in a chain transaction should not remove a swap dealer's ability to rely on the status of the initial bona fide hedger
The legacy position limits for agricultural commodities should be increased from proposed levels and based on a percentage of open interest.”

CME Group- March 28, 2011

Position Limits for Derivatives
March 28, 2011

CME Group opposes the adoption of the Commission’s proposal arguing that “the Commission has not met its burden of showing that the proposed position limit regime is ‘necessary’ and ‘appropriate.’ The Commission, moreover, has failed to undertake a comprehensive cost-benefit analysis of its proposed rules, as required by statute. The Commission also ignores the wealth of empirical evidence supporting the view that the proposed hard position limits (and related aggregation policy and restrictive exemptions) would actually be counterproductive by decreasing liquidity in the CFTC-regulated markets which, in turn, would likely increase both price volatility and the cost of hedging especially in deferred months.”

IntercontinentalExchange - March 28, 2011

Position Limits for Derivatives
March 28, 2011

From the comment letter:

ICE supports the position limits if properly applied. In promulgating final rules, the Commision should:

Maintain the current position limit regime by allowing exchange specific spot month position limits
Allow higher position limits for financially settled contracts
Adopt position limits for the nearby months to expiration instead of an all months position limit
Keep arbitrage and spread exemptions
Not implement onerous account aggregation rules

Kansas City Board of Trade - March 28, 2011

Position Limits for Derivatives
March 28, 2011

From the comment letter:

"Given the tremendous growth in both volume and open interest in all three wheat markets in recent years, we support and encourage the Commission to adopt equal and reasonable legacy (specific numeric) position limits for the enumerated wheat contracts that will continue to serve the needs of our markets and promote expanded market use. The creation of disparate limits between these markets will only serve to impede rather than foster such growth. In addition, unreasonably restrictive limits will only serve to aide overseas markets in promoting their contracts as replacements for the U.S. wheat futures global benchmark contracts, similar to the movement of late to shift away from the U.S. dollar as the global currency." In regards to spot month position limits, KCBT takes "exception to a spot month formula based solely on deliverable supply, which will result in disparate limits across wheat markets and diminish liquidity through inter-market spreading during the spot month."

Minneapolis Grain Exchange - March 28, 2011

Position Limits for Derivatives
March 28, 2011

In their comment letter, MGEX recommends:

that any reporting entity granted an exemption should only need to file one report with a single entity. Since the Commission is that primary entity for processing and monitoring bona fide hedge exemptions, that information should be readily available to the CFTC and shared with the necessary DCM(s).
that there should be an exemption or exception from the proposed spot and non-spot position limits for new or illiquid futures contracts.
that that the non-spot position limits be kept consistent across the wheat contracts
the continued use of current spot month position limits for the three enumerated wheat contracts.

Dr. John R. Morris & Dr. Lona Fowdur, Economists Incorporated - March 28, 2011

Position Limits for Derivatives
March 28, 2011

From the comment letter:

"Some aspects of the NOPR may be better suited for the idiosyncrasies of agricultural markets rather than the day-to-day realities of energy markets."
"The definition of bona fide hedges in regard to swaps trading may be overly restrictive and that they may in fact be detrimental to the efficiency and competitiveness of the energy market."
Prior interpretations of the CFTC's rules regarding bona fide hedging “provided flexibility for the Commission and the Designated Central Markets to review applications for bona fide hedging exemptions and make appropriate determinations that certain activities constituted bona fide hedging, even if there were not literally a later transaction in a physical marketing channel,” and that, in a prior interpretation of the old rule, the CFTC ruled that substituting later positions in physical marketing channels “is not a necessary or required condition of a bona fide hedge.”
Citing to the CFTC’s own interpretation of the Dodd-Frank Act: “the CEA places ‘no restriction on the Commission’s ability to define bona fide hedging for swaps…’”
The proposals "show a bias of an agricultural-market view and ignore the dynamic realities of modern energy markets."

The comment letter provides specific examples of a natural gas pipeline transportation hedge and a natural gas storage facility hedge, and recommends "that the Commission’s proposed definition for bona fide hedges either acknowledge that pipeline and storage hedges constitute bona fide hedges or that the definition, as it applies to swaps, be modified to allow for legitimate hedge transactions like pipeline and storage hedges to take place without the need for a subsequent physical cash transaction."

The letter closes with recommendations that the commission:

"revise the proposal to allow for anticipatory hedges, and
redesign the reporting process for bona fide hedging exemptions so that it is efficient and commercially practicable."

Working Group of Commercial Energy Firms - March 28, 2011

Position Limits for Derivatives
March 28, 2011

The Working Group believes that if implemented “without sufficient study, speculative position limits will disrupt today’s highly efficient energy commodity markets by reducing liquidity, impairing price discovery, and preventing market participants from effectively and efficiently hedging their commercial risk exposure. The Working Group further states that “the Phase I spot-month position limits must be reconsidered in many respects and more appropriately accommodate the hedging needs of market participants. The process for determining deliverable supply must be fully transparent and provide market participants the opportunity to comment on the DCM estimates of deliverable supply and any Commission proposal for spot-month position limits.”

BlackRock - March 28, 2011

Position Limits for Derivatives
March 28, 2011

From the comment letter:

BlackRock believes that “the Commission’s proposed rescission of its independent account controller approach to position aggregation and its replacement with a flawed alternative, would have major adverse impacts on our asset management business without any corresponding public benefits. Position holders and owners, as well as asset and fund managers that have authorized professional advisors to control their trading can not affect market prices and should not be subject to aggregation. If the Commission decides that federal position limits are necessary and appropriate at all, we strongly urge the Commission to reconsider its aggregation proposal and to return to its traditional policy of focusing on who controls trading.”

Shell Trading - March 28, 2011

Position Limits for Derivatives
March 28, 2011

Shell Trading offers several serious concerns about the proposed rule, arguing that “the proposal may prevent large hedgers from effectively managing their commercial risks. This results from a reduction in the size of spot position limits, the inclusion of a large (but largely undefined) number of instruments under those limits, a restrictive hedge exemption process, and uncertainty about the treatment of inter-affiliate swaps. Just as important, Shell Trading believes that the rule is overly complex and contains many ambiguous provisions, and accordingly, exposes market participants to grave unnecessary costs and compliance risks. Examples of the complexity and ambiguity include the number of position limits applicable to each derivative contract, the lack of clarity about which contracts will be counted towards each limit, and the fact that these limits will be enforced in real-time.”

Hess Corporation - March 28, 2011

Position Limits for Derivatives
March 28, 2011

From the comment letter:

Hess believes that the Commission “should not treat the mere existence of a guaranty as a ‘proxy’ for trading control. Aggregating positions anytime a payment guaranty, lien, letter of credit, or other standard credit arrangement exists between two parties would be over-broad and inconsistent with the purposes that position limits were meant to serve.” They further argue that “consolidated financial statements do not demonstrate actual common control by the parent over the day-to-day trading decisions of its subsidiary. A rule that aggregates positions based on the accounting systems would, without more, be unnecessarily broad and an inefficient way to implement the intended purposes of position limits provision in the CEA.”

Coalition of Physical Energy Firms - March 28, 2011

Position Limits for Derivatives
March 28, 2011

From the comment letter:

“COPE requests that the Commission not move forward with a final position limits rule. The Position Limits NOPR is not supported by empirical evidence and will impose a significant compliance burden on traders, their compliance personnel, and regulators alike. The Commission's already significant burden of market surveillance and enforcement, as increased by mandatory Dodd-Frank rulemakings, will only be further strained by unnecessary imposition of discretionary position limits that will prove as difficult to enforce as they will be to comply with. Rather than continue to pursue a position limits rule, the Commission should focus its resources on the mandatory aspects of Dodd-Frank and not burden itself and market participants with additional and questionable compliance obligations.”

Cargill - March 28, 2011

Position Limits for Derivatives
March 28, 2011

From the comment letter:

“Cargill's business will be significantly affected by the Proposed Rules. The hedge exemption is vital to Cargill's management of its commodity price risk in its business activities as a purchaser, processor and seller of physical commodities. In tum, Cargill's ability to manage its own risk impacts the prices it pays to agricultural producers who supply commodities to Cargill, as well as the prices it charges to processors and end-users who buy from Cargill. Position limits and the hedge exemption are also important for Cargill's business of providing risk management services to other businesses, by acting as a swap counterparty to businesses using swaps to hedge their risks.”

Futures Industry Association (FIA) - October 1, 2010

Pre-Rulemaking Position Limit Comments and Recommendations
October 1, 2010

From the letter:

FIA recommends that the CFTC "propose interim rather than final position limits on contracts involving exempt and agricultural commodities. FIA also recommends that any interim position limits apply only to net positions in economically equivalent contracts and be set at a level that will not reduce market liquidity or cause a migration of the price discovery function to foreign markets." FIA also recommended an "interim rule that aggregates positions only in commonly controlled accounts."

United States Commodity Funds - October 21, 2010

Advance Comments on Position Limits and the Definition of "Major Swap Participant" Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
October 21, 2010

The comment letter, posted October 21, 2010, is the second on the topic from USCF and opposed position limit proposals from the CFTC. The letter notes:^[2]

"We continue to believe that the ability of USCF (and other firms that manage similar publicly traded, un-levered, passive commodity funds) to prudently meet the investment objectives of the commodity pools that it manages will likely be significantly hampered by the imposition of restrictive limits. We also believe that the significant additional regulatory requirements to which USCF and the Funds would be subject if USCF or any of the Funds are deemed to be "major swap participants" under the Act would similarly hamper the ability of USCF to efficiently meet the Funds’ investment objectives. As a result, and more importantly, the value of the exchange traded pools managed by USCF to the hundreds of thousands of investors in our pools, and the several million investors in all similar pools currently in operation in the United States, could be adversely affected by both (1) the adoption of the Dodd-Frank Position Limits and (2) classification of USCF as a major swap participant under the Act."

NextEra Energy Power Marketing - October 21, 2010

Aggregation of Position Limits under Section 737 of Dodd Frank Act
October 21, 2010

From the letter:

"We are specifically concerned that an overly broad drafting of the rule regarding the aggregation of position limits...could have unintended consequences resulting in violations of certain federal and state laws applicable to energy companies."

CME Group - October 25, 2010

Pre-Rulemaking Position Limit Comments
October 25, 2010

From the letter:

"Our comments regarding the Commission's § 4a position limit authority will focus on: 1) the statutory requirements for the Commission's establishment of position limits, and 2) the features the Commission should adopt for any necessary position limit regime (e.g., timing, exemptions, and aggregation standards). In offering these comments, CME Group has been cognizant of the extensive demands that are being made on the Commission‟s limited resources. However, the Commission must gather critical data regarding swap markets and individual traders‟ swap positions. Without a thorough understanding of such data, the Commission runs the risk of inappropriately setting position limits. CME Group appreciates the great challenge this presents to the Commission and suggests in this letter ways to reduce the strain on the Commission‟s resources while still serving our mutual goal of effective market surveillance to deter price manipulation and other abusive practices."

GFI Group - January 27, 2011

RIN 3038-AD15 and 3038-AD16 Position Limits for Derivatives
January 27, 2011

Michael Cosgrove, Managing Director of GFI Group, Inc., submitted this letter to the CFTC on January 27, 2011. Mr. Cosgrove disputes the "conventional wisdon" that excessive speculation was to blame for the 2008 spike in commodity prices. He further suggests that, while position limits are "necessary for the smooth functioning of physically deliverable commodities", position limits on cash settled markets are "disruptive, dangerous, and of no positive value."

Cosgrove recommends withdrawal of the proposal with regard to cash-settled contracts, a tightening of the position limits for physically-delivered products, and a longer review period before a final rule is established.

Gresham Investment Management - February 14, 2011

RIN 3038-AD15 and 3038-AD16 Position Limits for Derivatives
February 14, 2011

Henry Jarecki, Chairman of Gresham Investment Management LLC, submitted this letter to the CFTC on February 14, 2011. Dr. Jarecki argues with the categorization of Gresham as a "speculator, in the same status as the unconstrained and highly leveraged futures traders for whom position limits were no doubt intended." He explains that the company's risk controls, client management, and unleveraged customer base should allow the firm relief from position limits, as they had been until 2009.

Jarecki further argues:

There is "no more than anecdotal evidence" that position limits would lower the prices of food, fiber, or mineral prices.
The "legacy limits" proposal creates an unnecessary implementation delay on limits where they are needed -- with leveraged speculators.
The bona fide hedger exemption creates an "unlevel playing field," as it relates to unleveraged entities such as Gresham and their providing of liquidity and price discovery to the market.

Futures Industry Association - December 2, 2010

Position Reports for Physical Commodity Swaps
December 2, 2010

From the comment letter:

The commission is proposing to develop its report system "before it has had time to define what must be reported and precisely who must report, and before market participants have had an opportunity to build the infrastructure necessary to collect and protect the confidentiality of the required information."
"The burden of implementing the proposed transitional rule will greatly exceed the benefits to the commission and market participants."
"The reporting requirements under the proposed position reports rule are too broad."

The FIA letter concludes with a request for the implementation of a "modified special call" process during the transition.

National Futures Association - December 2, 2010

Position Reports for Physical Commodity Swaps
December 2, 2010

From the comment letter:

NFA addresses one important issue raised in subsection D of Section ll of the Federal Reqister release whereby the Commission specifically requests comments relating to "any role that self-regulatory organizations could play in gathering positional data on paired swaps."

"The Commission has a well-established infrastructure to obtain the necessary information regarding exchange-traded futures. With respect to paired swaps, though, the Commission will need information from SEFs, contract markets trading swaps and swap data repositories. NFA could certainly play an important role in gathering and consolidating relevant data from those varied sources and transmitting that information to the Commission. While to date we have not attempted to detail exactly how NFA would perform this function we certainly have presented Commission staff with a conceptual framework for NFA to perform this role."

Minneapolis Grain Exchange - December 2, 2010

Position Reports for Physical Commodity Swaps
December 2, 2010

In the comment letter, MGEX shares five concerns regarding physical position reports for its hard red spring wheat (HRSW) contracts:

"Disruption in pricing and activity in the HRSW contract could well occur should futures position limits among the wheat contracts vary."
The commission is "acting before adequate information is known about the activity and volume of swaps."
"Setting position limits aggregately across DCMs is begging for potential discrimination."
Regarding the process for “pairing” a swap with a futures contract, "more clarity is necessary."
A final concern is "the unknown financial risk and business risk the proposed rulemaking presents."

References

↑ Morgan Stanley, CME pan CFTC position limits. Reuters. Retrieved on November 18, 2010.
↑ United States Commodity Funds -- Comments to Position Limits and Definition of Maj or Swap Participant. Sutherland Asbill & Brennan LLP. Retrieved on November 18, 2010.

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[0] Morgan Stanley, CME pan CFTC position limits. Reuters. Retrieved on November 18, 2010.

[1] United States Commodity Funds -- Comments to Position Limits and Definition of Maj or Swap Participant. Sutherland Asbill & Brennan LLP. Retrieved on November 18, 2010.

[1]

[2]

Position Limits Regulation - Comment Letters

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