OCIE Publishes Examination Priorities for 2017

Emily HayesBest Practices, Market Rules & Responsibilities

ocie-examination-priorities-2017

Earlier this year, the SEC’s Office of Compliance Inspections and Examinations (OCIE) released its Examination Priorities for 2017.  OCIE annually examines regulated entities[1] to ensure compliance, prevent fraud, identify risk, and inform policy.  These priorities reflect the practices, products, and services that, per OCIE, present the greatest risks to investors and U.S. capital markets.  Regulated entities may use the priorities to prepare for their own OCIE examinations and update their internal compliance and supervisory rules and procedures; however, the priorities do not constitute legal advice. Read More

CFTC Extends Deadline to Comply with March 1st Variation Margin Requirements

Emily HayesBest Practices, Market Rules & Responsibilities

cftc-regulations-swaps

On February 13, 2017 the Commodity Futures Trading Commission delivered an early Valentine’s Day present to swap dealers and major swap participants by extending the deadline to comply with the variation margin requirements for un-cleared swaps stipulated by Commission Regulation § 23.153 from March 1, 2017 to September 1, 2017.[1]  The CFTC’s No-Action Letter announcing this extension, CFTC Letter No. 17-11, applies only to swap dealers and major swap participants without a prudential regulator.[2]Read More

FINRA’s 2017 Regulatory and Examination Priorities

Emily HayesBest Practices, Market Rules & Responsibilities

FINRAs-2017-regulatory-examination-priorities

Earlier this year, FINRA published its Annual Regulatory and Examination Priorities Letter to provide the industry with insights into the areas FINRA plans to review in its 2017 exams and to assist financial firms with reviewing and strengthening their own supervisory and compliance systems.  The letter states five priority areas the authority will focus on in its 2017 exams with a common theme of the industry’s need to focus on what FINRA President Robert Cook terms “core ‘blocking and tackling’ issues of compliance, supervision and risk management.”Read More

Amendments to CME/CBOT/NYMEX/COMEX/CME SEF Rule 432 (General Offenses) Chapter 4, Enforcement of Rules

Emmett McGrathMarket Rules & Responsibilities

chicago-mercantile-exchange-building-cme-rules-and-regulations

Amendments to CME Rule 432 (General offenses) went into effect February 16, 2017. These amendments expand upon the protective measures previously found in CME Rule 432. The amended rule now extends liability for fraud and bad faith (432.B.1); manipulative devices, schemes, and artifices to defraud (432.H.); and delivery of false, misleading or inaccurate crop or market information (432.J.) to include mere attempts to engage in such activities.Read More

Citi Agrees to Adopt Compliance Program and Pay CFTC $25 Million for Alleged Spoofing

Emily HayesCase Studies, Market Rules & Responsibilities

citi-cftc-spoofing

Citigroup Global Markets Inc. (Citi) settled with the Commodity Futures Trading Commission (CFTC) on January 19, 2017 over the CFTC’s allegations that five traders at Citi “spoofed” the U.S. Treasury futures markets and that Citi failed to supervise the trading activity of its employees.  Pursuant to the Order, Citi must pay a fine of $25,000,000 and must maintain systems and controls that, at a minimum, detect and generate reports on trading activity that may be spoofing. Read More

Brexit Supreme Court Ruling and Article 50

Julianne DardanesCase Studies

brexit-supreme-court-ruling

Last June British voters shocked the world by answering affirmatively to a referendum that, if acted on, would remove the United Kingdom from the European Union. The political and economic implications of this decision were and still remain largely unknown, but we outlined some of the possibilities in our initial post about this topic over the summer.Read More

Navinder Sarao Pleads Guilty to Spoofing

Emily HayesCase Studies, Market Rules & Responsibilities

navinder-sarao-spoofing

On Wednesday, November 9, 2016, Navinder Sarao pled guilty to spoofing and wire fraud before Judge Virginia Kendall in the Northern District of Illinois. After unsuccessfully fighting his extradition from the UK, Sarao became the second person found liable for violating Dodd-Frank’s anti-spoofing statute after Michael Coscia was convicted last year.Read More

Central Bank of Canada Experiments with Blockchain Technology

Emily HayesCase Studies, Market Rules & Responsibilities, Operations, Startup Tips & Resources

blockchain-technology

As large financial institutions partner with Fintech start-ups to test blockchain technology, it is no surprise that governments are also experimenting with blockchain to see any potential savings in transaction costs when clearing and settling payments.  Recently, the national governments of Canada and the United Kingdom tested the technology. The Central Bank of Canada conducted a trial in conjunction with the New York based start-up R3 CEV, whereby banks received digital coins that represented the bank’s  funds in an account at the Central Bank of Canada.  Banks then exchanged the digital coins between themselves and the Central Bank through an Ethereum-based network. The UK government began an experiment using blockchain to distribute welfare payments in July of 2016, and even the State of Illinois established a working group in 2016 to explore how blockchain could increase efficiency.  Read More

CFTC’s Recent Spoofing Settlement

Emily HayesCase Studies, Market Rules & Responsibilities, Operations

CFTC-spoofing-cases

Igor Oystacher, the now-infamous trader nicknamed “the Russian,” and his proprietary trading firm, 3Red Trading, informed the Northern District of Illinois on October 19, 2016, that the parties agreed to settle with the CFTC on the agency’s spoofing allegations. The settlement announcement came after Oystacher and 3Red failed to convince the court to dismiss the case in September 2016. Yet, while the terms of the agreement are currently unavailable, this case demonstrates the federal government’s increasing scrutiny of market manipulation and suspect trading practices.Read More

Trademark Fee Changes

Genna HibbsBest Practices, Operations, Startup Tips & Resources

us-trademark-fee-changes

Effective Jan. 14, 2017, the U.S. Patent and Trademark Office (USPTO) will be revising its fee schedule. The upcoming changes are set forth in full in this final rule and summarized in this USPTO publication. Most fees will increase, as the USPTO attempts to “align fees with full costs.” At the same time, the changes aim to make electronic filing less expensive, and hence more attractive, than paper filing. With the USPTO having seen seven years of consecutive increases in the number of trademark filings and the trend expected to continue, this price differential is intended to encourage a shift to more efficient electronic filing.Read More