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CFTC Responds to FAQ on Commodity Options

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Today, the CFTC Division of Market Oversight published a response to frequently asked questions regarding commodity options, including reporting obligations with respect to trade options. The response clarified a few important issues and reiterated others. Below are some of the highlights, with numbers corresponding to those in the CFTC’s response.... Read More

Topics: Derivatives, Energy

FERC Chairman’s Letter to Senate Highlights FERC-CFTC Tension and a Voluntary Trader Ban in the JP Morgan $410 Million FERC Settlement

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This past Monday, September 9, the Federal Energy Regulatory Commission (FERC) posted a letter from its chairman, Jon Wellinghopf, to Senators Elizabeth Warren and Edward Markey responding to their inquiries on the relationship between FERC and the Commodity Futures Trading Commission (CFTC) and FERC’s recent $410 million settlement against J.P.... Read More

Topics: Energy

CFTC Clarifies That Typical Retail Energy Contracts Are Not Subject to Regulation Under Dodd-Frank’s Retail Commodity Transaction Provisions

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On Friday August 23, the Commodity Futures Trading Commission clarified that typical retail energy contracts with homeowners and commercial users will not be subject to the Dodd-Frank Act’s requirements applicable to “Retail Commodity Transactions.” Congress, in the Dodd-Frank Act, defined a Retail Commodity Transaction as “any agreement, contract, or transaction... Read More

Topics: Energy

FERC’s BP America Manipulation Show Cause and Proposed $28 Million Penalty Highlights the Interrelationship Between CFTC and FERC in Enforcement Matters

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The Federal Energy Regulatory Commission’s (FERC) August 5, 2013, $28 million show cause order against BP America Inc. and other BP affiliates highlights the interrelationship between the Commodity Futures Trading Commission (CFTC) and FERC in enforcement matters. On the surface, the case appears to be what has become a “garden... Read More

Topics: Energy

High Frequency Trader “Spoofs” and “Layers” his Way to Penalties from U.S and British Regulators

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On July 22, 2013, regulators from the United States Commodity Futures Trading Commission (CFTC) and the British Financial Conduct Authority (FCA) fined high frequency trader Michael Coscia (and his firm Panther Energy Trading) for engaging in spoofing transactions for the purpose of layering bids or offers. As we have previously... Read More

Topics: Broker-Dealer, Energy

CFTC (and FERC) Compliance Managers Take Note – CFTC Schedules Vote on Final Interpretation of Disruptive Trading Practices

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At its open meeting on May 16, 2013, the Commodity Futures Trading Commission will vote on the final interpretative rule for disruptive trading practices under Section 747 of the Dodd-Frank Act. That order should be of interest to CFTC compliance managers. But FERC (Federal Energy Regulatory Commission) compliance managers should also... Read More

Topics: Energy, Private Equity, Public Companies and Securities

CFTC Reiterates that “Wash Trades” Are “Grave Violations” in Penalizing Two Experienced Traders for Wash Trading

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On Monday, April 29, the Commodity Futures Trading Commission reiterated that wash trades (transactions without intent to take genuine, bona fide positions in the market, such as simultaneous purchases and sales designed to negate each other so that there are no changes in financial position) are “grave violations” when they... Read More

Topics: Broker-Dealer, Energy

Final Red Flags Rules Adopted by SEC and CFTC

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Today the CFTC and the SEC jointly issued final rules that require regulated entities to adopt programs designed to prevent identity theft – so-called “red flags” rules. Since 2003, the Fair Credit Reporting Act has authorized federal agencies responsible for banking regulations to implement programs to prevent identity theft and... Read More

Topics: Broker-Dealer, Consumer Protection, Derivatives, Energy, Investment Advisers, Private Equity

CFTC Extends Compliance Dates for End User Swap Reporting

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The CFTC has issued a no-action letter that effectively extends the dates for swap counterparties who are not swap dealers (SDs) or major swap participants (MSPs) to come into compliance with the agency’s reporting rules under Part 43 (real-time reporting), Part 45 (swap data reporting), and Part 46 (“historical swap”... Read More

Topics: Derivatives, Energy