The International Swaps and Derivatives Association recently published proposed amendments to its 2014 Credit Derivatives Definitions relating to narrowly tailored credit events. The proposal comes in the wake of concerns raised by market participants over certain failure to pay credit events, or claimed failure to pay credit events – in particular, the 2017 agreement by Hovnanian Enterprises to default on an interest payment to an affiliate in order to obtain favourable refinancing terms from GSO Partners.
The Commodity Futures Trading Commission (CFTC) recently published the 2019 examination priorities for its three divisions. This marks the first time that the agency has published its divisions' examination priorities, which serves as part of the CFTC's efforts to advance its Project KISS (which stands for 'Keep It Simple, Stupid') initiative and demonstrates areas that the divisions view as particularly important to self-regulation in US derivatives markets for the coming year.
Towards the end of 2018, the Commodity Futures Trading Commission (CFTC) proposed significant revisions to the framework governing swap trading through swap execution facilities and designated contract markets. Many of these amendments are in line with recommendations contained in CFTC Chair J Christopher Giancarlo's white paper on swaps regulation reform. The proposed changes are intended to reflect developments in the swaps markets since the CFTC's implementation of its current regulations.
Commodity Futures Trading Commission Chair J Christopher Giancarlo recently released a white paper recommending potential reforms to the agency's approach to the extra-territorial, or cross-border, application of its swaps trading rules. According to Giancarlo, the reforms are intended to create a territorial, risk-based approach that relies on greater deference to regulators in jurisdictions with comparable regulatory frameworks (comparable jurisdictions), where appropriate.
The National Futures Association (NFA) recently adopted an interpretive notice that requires futures commission merchants, introducing brokers, commodity pool operators and commodity trading advisers to disclose to customers certain potential risks involved when dealing with virtual currencies and virtual currency derivatives. The notice reflects the NFA's concern that, among other things, customers may not fully understand the nature of these products or the losses that could be sustained.