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CFTC Taking Action on Inaccurate Reporting

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The Commodity Futures Trading Commission (CFTC) is increasingly taking action on inaccurate reporting by market participants.  In the past year, the CFTC has entered into three settlements with market participants for filing inaccurate reports. Recently, the CFTC settled with ICE Futures U.S., Inc. for $3 million for inaccurately filing clearing... Read More

Topics: Broker-Dealer, Energy

CFTC’s Massad on End-Users

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CFTC Chair Timothy G. Massad delivered a speech on the importance of providing flexibility in the CFTC’s regulations to accommodate hedging by commercial end-users of derivatives.  Mr. Massad highlighted the following: Last September the CFTC amended its rules so that local, publicly-owned utility companies could continue to effectively hedge their... Read More

Topics: Derivatives, Energy

Asset Manager Hedging Results Fined for Failing to Register as a Commodity Trading Advisor

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On January 16, 2015, the Commodity Futures Trading Commission (CFTC) fined an asset manager, using financial instruments to hedge its clients’ risk, for failing to register as a Commodity Trading Advisor (CTA).  See Summit Energy Services Inc., CFTC Docket No. 15-12.  Without admitting or denying any finding or conclusions, the... Read More

Topics: Broker-Dealer, Energy

CFTC Proposes Important Clarification on Forward Contracts with Embedded Volumetric Optionality

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The CFTC has published an important proposed clarification to its seven element test regarding forward contracts with embedded volumetric optionality (EVO). The proposed interpretation provides that a contract for deferred delivery of a physical commodity (i.e., a forward contract) that contains EVO will fall within the forward contract exclusion, and... Read More

Topics: Derivatives, Energy

Spoofing Back in the News — First Criminal Indictment for Spoofing; CFTC Settlement Lays Out Telltale Signs of Spoofing

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Last week the government handed down its first criminal indictment for allegedly engaging in “spoofing” and the Commodity Futures Trading Commission settled with Eric Moncada for spoofing. Spoofing is a form of trading in which traders place orders in the form of “bids” to buy or “offers” to sell a futures... Read More

Topics: Broker-Dealer, Energy

CFTC Finalizes Rule to Exclude Swaps with Municipal Utilities From $25 Million De Minimis Swap Dealer Threshold

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The CFTC has published its final rule to exclude most swaps used for hedging purposes by municipal and other governmental utilities from counting against the $25 million swap dealer de minimis threshold that currently applies to swap dealing activities with “special entities” (i.e., governmental organizations, pension plans, and endowments). The... Read More

Topics: Derivatives, Energy