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Statement Of Support By CFTC Commissioner Brian Quintenz Regarding The Exemption From The Swap Clearing Requirement For Certain Affiliated Entities

Date 25/06/2020

I support today’s final rule providing legal certainty to swap counterparties electing the inter-affiliate exemption from the Commission’s requirement that certain interest rate swaps and credit default swaps be cleared. At issue is an important condition of the exemption that reduces the likelihood that uncollateralized exposures can build up at a U.S. swap participant. I support the policy, made permanent by today’s rule, that permits variation margin to be exchanged by affiliated counterparties in lieu of clearing swaps with foreign counterparties. This provision appropriately balances an anti-evasionary measure with providing flexibility to market participants. The provision has functioned well since 2013, and it is appropriate to make the provision permanent after several extensions of the no-action relief.
Concurring Statement Of CFTC Commissioner Rostin Behnam Regarding Exemption From The Swap Clearing Requirement For Certain Affiliated Entities—Alternative Compliance Frameworks For Anti-Evasionary Measures

Date 25/06/2020

I support today’s adoption of amendments to the exemption from the swap clearing requirement for certain affiliated entities within a corporate group. The amendments that update the conditions for the exemption incorporate several years of observation and analysis to build upon its utility within the global regulatory landscape, while affirming the Commission’s appropriate use of its public interest authority under section 4(c) of the Commodity Exchange Act. It can be tempting to use somewhat fluid and undeniably desirable objectives such as the promotion of responsible economic and financial innovation and fair competition to support all manner of regulatory changes. And I have not hesitated to highlight my own concerns for the imprudent use of 4(c) exemptive authority. However, I am pleased that when it comes to the risks associated with U.S firms entering into uncleared swaps with non-U.S. affiliates or evading the clearing requirement altogether, the Commission has consistently demonstrated that its reliance on the 4(c) authority provides the checks to ensure that the policy and outcomes remain legally sound and rational.
Statement Of CFTC Commissioner Dan M. Berkovitz On Proposed Rule Further Extending Swap Margin Deadline For Entities With Smaller Swap Portfolios

Date 25/06/2020

I concur with issuing for public comment the proposal to extend the swap initial margin compliance date to September 1, 2022 for certain financial entities that have smaller swap portfolios (“Proposal”).
Statement Of CFTC Commissioner Dan M. Berkovitz On Proposed Rule Further Extending Swap Margin Deadline For Entities With Smaller Swap Portfolios

Date 25/06/2020

I concur with issuing for public comment the proposal to extend the swap initial margin compliance date to September 1, 2022 for certain financial entities that have smaller swap portfolios (“Proposal”).
SEC Charges Novartis AG With FCPA Violations

Date 25/06/2020

The Securities and Exchange Commission today announced that Novartis AG, a global pharmaceutical and healthcare company headquartered in Basel, Switzerland, has agreed to pay over $112 million to settle charges that it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA).

Statement Of CFTC Commissioner Rostin Behnam Regarding Notice Of Proposed Rulemaking On Margin Requirements For Uncleared Swaps For Swap Dealers And Major Swap Participants

Date 25/06/2020

Today’s notice of proposed rulemaking (“NPRM”) is necessitated as a result of global policy and domestic regulatory considerations to address the impact of the COVID-19 pandemic on potential market disruption that could result from a large number of entities simultaneously coming into compliance with the initial margin (or “IM”) requirements of the CFTC Margin Rule.[1] In our attempts to remain consistent with revisions to the BCBS/IOSCO international framework’s implementation schedule, we have now created an additional compliance phase, moving from five to six, and postponing full compliance by one year to September 1, 2021.[2] This seems reasonable, save for the fact that our last action to provide relief for those who would have to come into compliance in September of this year has resulted in a reuniting of phases five and six, reintroducing the same set of concerns regarding potential market disruptions we sought to avoid. Accordingly, we are here today with a new NPRM to further postpone the compliance date for the final phase, phase six, to September 1, 2022.
Finansinspektionen: SEB Receives An Administrative Fine For Deficiencies In Its Work To Combat Anti-Money Laundering In The Baltics

Date 25/06/2020

SEB has not sufficiently identified the risk of money laundering in its Baltic operations and has had deficiencies in its governance and control of the Baltic subsidiary banks’ anti-money laundering measures. SEB is therefore being issued a remark and an administrative fine of SEK 1 billion.
US Financial Regulators Modify Volcker Rule

Date 25/06/2020

Five federal regulatory agencies today finalized a rule modifying the Volcker rule's prohibition on banking entities investing in or sponsoring hedge funds or private equity funds—known as covered funds. The final rule is broadly similar to the proposed rule from January.
UK Financial Conduct Authority: EBA Guidelines On ICT And Security Risk Management

Date 25/06/2020

On 28 November 2019, the European Banking Authority (EBA) published final Guidelines(link is external) on ICT and security risk management for credit institutions, investment firms and payment service providers (PSPs) ('the Guidelines'). The FCA has notified the EBA that it intends to comply with these Guidelines.
Bank Of England: Record Of The Financial Policy Committee - June 2020

Date 25/06/2020

This is the Record of the Financial Policy Committee covering decisions taken since 7 May 2020.