Gary DeWaal's Bridging the Week: December 16 to 20 and 23, 2013 (Comparability Determinations; Double Dipping Leads to Fines, Bribery Controls)

Jump to: Bridging the Week    Compliance Weeds    My View   

Published Date : December 23, 2013

If March is the month that comes in like a lion and leaves like a lamb, than this December has been the exact opposite. With so little happening the first few weeks of December it seemed lamb-like. However, regulators and litigants seem to have been in a hurry to put everything on the table prior to going on their holidays the last two weeks of this month, and thus December seems to be ending with the roar of a lion. And not unexpectedly, the US Commodity Futures Trading Commission waited until the eve of the very last day to issue important comparability determinations so that non-US swap dealers and major swap participants could figure out the rules of the road going forward.

As a result, all of the following are articles covered on this week's Bridging the Week (which is the last Bridging the Week of 2013), and be sure to check out my reflections on 2013 at the very end of this article:

• the CFTC (US) issues comparability determinations for six jurisdictions on the eve of its self-imposed December 21 deadline; certain substituted compliance permitted;
• the SEC (US) charges ConvergEx subsidiaries and former employees with fraud for excessive charges on customer transactions (you can't mark-up and mark-down trades and charge commissions too without disclosure);
• ADM charged by the SEC for illegal payments to foreign officials in violation of the Foreign Corrupt Practices Act; JLT Specialty Limited, a UK-firm, fined by FCA (UK) for similar type violations;
• Canadian securities regulators seek comment on proposed rules requiring mandatory derivatives clearing;
• CME settles a number of violations (re: close outs during delivery period, breakdown of ATS controls, and EFRPs; includes Compliance Weeds);
• CME submits for approval to the CFTC a proposed rule requiring clearing members to provide it liquidity in certain crises (includes My View);
• the CFTC settles with trader for pre-arranged trading and lying;
• developments regarding CFTC required taping and tape retention requirements;
• ESMA issues revised instructions regarding reporting of on-exchange derivatives;
• FATF updates advisory on jurisdictions with AML or terrorism financing deficiencies;
• FINRA fines Deutsche Bank Securities related to lending activities to support prime broker activities;
• the FRB (US): beware of risk transfers that may not transfer risk;
• Sentinel Trustee files motion to recover funds from BONY;
• the SFC (HK) fines HSBC Securities Brokers (Asia) HK $5 Million Related to inaccurate licensing application (includes Compliance Weeds); and
• the Department of Treasury (US) issues report citing risks of automated trading systems, including high frequency trading systems (includes My View).

Video Version:
 

 
Article Version:

CFTC Issues Comparability Determinations for Six Jurisdictions on the Eve of Self-Imposed December 21 Deadline

Late Friday afternoon, the US Commodity Futures Trading Commission authorized substituted compliance by non-US swap dealers and major swap participants with certain provisions of six jurisdictions' rules related to swaps dealing, rather than requiring compliance with equivalent provisions of US rules. The CFTC did this by determining that such rules were comparable.

The jurisdictions adjudged to have comparable swaps dealing rules as the US were Australia, Canada, the European Union, Hong Kong, Japan and Switzerland.

For the six jurisdictions, the CFTC found comparability (and thus approved substituted compliance) for a number of so-called "entity level" requirements. These requirements relate to tasks of the chief compliance officer, swap data recordkeeping, risk management program, monitoring of position limits, diligent supervision, business continuity, research conflicts, clearing conflicts, undue influence, availability of information for disclosure, and clearing member risk management (for this last provision, no determination was made for HK and Switzerland). The CFTC also found comparability (and approved substituted compliance) for a few so-called "transaction level" requirements in the EU and Japan.  For the EU, the requirements related to swap confirmations, portfolio reconciliation, portfolio compression, and for the EU and Japan, certain requirements related to daily trading records and swap trading relationships.

Separately, the CFTC's Division of Market Oversight indicated that it would take "no action" again non-US SDs or MSPs located in Australia, Canada, the EU, Japan or Switzerland that were not part of an affiliated group headed by certain US persons for failing to comply with certain US swap data repository reporting requirements. This relief will expire at various times during 2014, depending on the type of counterparty to the relevant swap. In another letter, the Division of Swap Dealer and Intermediary Oversight granted no action until March 3, 2014 for non-US SDs and MSPs from Australia, Canada the EU, Japan, and Switzerland to comply with certain CFTC internal business conduct requirements.

This process of assessing countries' rules for comparability and if comparable, permitting substituted compliance by non-US persons was part of a framework established in the Cross Border Guidance approved by the CFTC on July 12, 2013. (For details of this Guidance, which was published July 26, see: http://www.garydewaalandassociates.com/?p=451.)

The comparability determinations were approved 3-1 by the CFTC Commissioners, with Commissioner Scott O'Malia dissenting. According to Commissioner O'Malia,

"I cannot support the Notices [of Comparability Determinations] because they: (1) are based on the legally unsound cross-border guidance; (2) are the result of a flawed substituted compliance process; and (3) fail to provide a clear path moving forward. If the Commission's objective for substituted compliance is to develop a narrow rule-by-rule approach that leaves unanswered major regulatory gaps between our regulatory framework and foreign jurisdictions, then I believe that the Commission has successfully achieved its goal today."

Chairman Gary Gensler, and Commissioners Mark Wetjen (soon to be Acting Chairman) and Bart Chilton had a different view. To them, the comparability determinations demonstrated the effectiveness of international cooperation in implementing the G-20 commitments of September 2009:

"These determinations reflect the Commission's commitment to coordinating our efforts to bring transparency to the swaps market and reduce its risks to the public. The comparability findings for the entity-level requirements are a testament to the comparability of these regulatory systems as we work together in building a strong international regulatory framework."

Previously, three financial markets industry organizations petitioned a US Federal court to set aside the CFTC's Cross Border Guidance and subsequent advisories. The organizations alleged that the CFTC endeavored to masquerade what really were "rules" by calling them "guidance" in order to avoid strict legal requirements related to the promulgation of new rules, including, among other matters, adequately evaluating the proposed rules prospective costs and benefits.  The three industry organizations were the Securities Industry and Financial Markets Association, the International Swaps and Derivatives Association and the Institute of International Bankers. (for details regarding this lawsuit, see the related article on "Bridging the Week, December 2-6, 2013: http://www.garydewaalandassociates.com/?p=1518.)

SEC Charges ConvergEx Subsidiaries and Former Employees with Fraud for Excessive Charges on Customer Transactions

The US Securities and Exchange Commission charged three subsidiaries of ConvergEx Group, LLC and two subsidiaries' ex-employees with fraud related to their acceptance of customers' securities transactions at agreed commissions, and then marking-up or down such transactions without disclosure when they were executed by offshore affiliates on a riskless principal basis. The brokerage companies purposely routed the transactions for execution to offshore affiliates to obtain trading profit on each transaction in addition to the disclosed commissions. In many cases, customers paid double their expected commissions.

The three subsidiaries charged were G-Trade Services, LLC; ConvergEx Global Markets Limited (GCM), and CovergEx Execution Solutions LLC.

One individual charged, Jonathan Samuel Daspin, was the Global Head of Trading for GCM. He was accused of often consulting with the brokers who faced clients to determine how much profit the firm could take without customer detection. The other individual charged, Thomas Lekargeren, was a sales trader for the GCM Division of G-Trade. He is alleged to have participated in a scheme to help conceal the firm's illicit practices to charge higher amounts.

To settle this matter, the ConvergEx firms agreed to pay disgorgement and prejudgment interest in excess of US $87 Million and a penalty of US $20 Million. The individual respondents also agreed to pay disgorgement in excess of US $1 Million and prejudgment interest.

Separately, the US Department of Justice filed criminal charges against a ConvergEx Group subsidiary and the two employees, as well as entered into a deferred prosecution agreement with ConvergEx Group itself. To resolve this matter, ConvergEx has agreed to pay US $43.8 Million in criminal penalties and restitution.

And briefly:

• ADM Charged by SEC for Illegal Payments to Foreign Officials in Violation of the Foreign Corrupt Practices Act; JLT Specialty Limited Fined by FCA (UK) for Similar Type Violations: Archer-Daniels-Midland Company was charged by the Securities and Exchange Commission for failure to maintain adequate controls to prevent illegal payments to Ukrainian officials. ADM agreed to pay disgorgement of more than US $33 Million and prejudgment interest in excess to US $3 Million to settle this matter. In a parallel action, the US Department of Justice, entered into a non-prosecution agreement with ADM and criminal charges against an ADM subsidiary that, to settle that matter, will pay US $17.8 Million in fines. ADM's violation of the Foreign Corrupt Practices Act occurred when, at various times from 2002 to 2010, in order to obtain VAT refunds from the Ukrainian government, ADM subsidiaries bribed Ukrainian government officials 18-20% of amounts owed. On the other side of the Atlantic Ocean, JLT Specialty Limited, a UK company that provides insurance brokering and risk management services, was fined UK £1.8 Million (US $2.9 Million) for using an introducing broker to obtain business from overseas clients from June 7, 2011 to May 9, 2012, without determining whether the introducing agent was affiliated with such clients or public officials. Although during the relevant period, JLTSL paid over 57% of its revenue from introduced business to its agent, the FCA said "…it found no evidence to suggest that JLTSL has permitted any illicit payment or inducement to any Overseas Introducer during the Relevant Period, nor that JLTSL intended to permit any illicit payment or inducement to any Overseas Introducer during the Relevant Period."
   
• Canadian Securities Regulators Seek Comment on Proposed Rules Requiring Mandatory Derivatives Clearing: The 13 securities regulators of Canada's provinces and territories are seeking comment on proposed rules related to the central clearing of over the counter derivatives transactions. In addition to proposing rules to determine when derivatives will be subject to mandatory clearing, the proposal address contemplated end-user and inter-group exemptions. Comments are due by March 19, 2014.


• CME Settles a Number of Violations (Close Outs During Delivery Period, Breakdown of ATS Controls, EFRPs): The CME settled for relatively small penalties a number of discrete violations of its rules, but each settlement highlights important requirements that must be strictly adhered to.

1. In the first, Barclays Capital Inc. settled a CME disciplinary matter for payment of US $10,000 related to its netting of offsetting positions in a physically delivered futures contract (i.e., soybean oil futures) on November 25, 2011, during a period of time (i.e., the delivery month and two days prior) when all such futures contract ordinarily can be offset only through transactions executed in the market place. There is an exception to this requirement for bona fide clerical or operational errors corrected on the same day provided the corrected amount does not exceed 1% of the relevant contract's open interest. However, this exception was not applicable here.
2. In another disciplinary matter, the principal of a trading firm, Kenneth Bell of Bell Trading, agreed not to access CME's electronic trading or clearing platforms or the CME trading floor for 10 days because the automated trading system of Bell Trading malfunctioned for two minutes on August 5, 2011, and entered numerous self-matched trades in the September 20111 Five-year Treasury Note futures contract during that period. The system malfunctioned because of a programming error by a contractor employed by Bell Trading.
3. And finally, in a reminder that the CME expects all elements of its EFRP (exchange of futures for related positions) rules to be followed, an end-user client, West Fraser Mills Ltd. agreed to pay a fine of US $15,000 for entering into the futures leg of an EFR (exchange of futures for risk) transaction on February 3, 2012 involving November 2012 lumber futures, but not a corresponding OTC swap or other OTC instrument. In connection with EFRPs (of which EFRs are a type), the party who is the buyer or seller of the relevant futures contract must have the opposite position (i.e., seller or buyer) of the related position or opposite market exposure (i.e., short or long).

Compliance Weeds: Years ago, each of the above incidents would be dismissed as "costs of doing business." However those days are gone. Although the events are isolated, all compliance incidents, no matter how small, should be evaluated to ensure a firm understands what gave rise to the incident; what events could occur to give rise to a similar incident; and what controls does a firm have or need to develop to minimize the likelihood of a similar incident reoccurring. Sadly, small leaks can lead to big floods.

• CME Submits Proposed Rule Requiring Clearing Members to Provide it Liquidity in Certain Crises: The Chicago Mercantile Exchange has submitted to the CFTC for its approvals new rules to enhance its ability to raise cash from clearing members during certain crises. Among other measures, the CME proposes that if it ever needs to convert non-cash collateral to cash for same day settlement for a clearing member or its customers, it will attempt to do so through asset sales, uncommitted funding arrangements or other services it has arranged. However, if these efforts are unsuccessful to raise sufficient liquidity, CME proposes to be able to declare a "Liquidity Event" and unilaterally substitute any cash deposited by a clearing member subject to the Liquidity Event for their guaranty fund deposits up to the amount of US Treasury securities deposited in its guaranty fund. The CME may also advise any clearing member that is a primary dealer (or has a primary dealer affiliate) to replace any non-cash guaranty fund collateral with cash by 60 minutes. The CME may also substitute payment of settlement variation to any primary dealer-clearing member (or if there is an affiliate primary dealer) with US Treasury securities up to the amount of its guaranty fund contribution. Other measures are also proposed in order to help the CME meet its enhanced liquidity requirements as a Systemically Important Derivatives Clearing Organization under new CFTC rules approved by the CFTC on November 15, 2013 (for details regarding these rules, see the related article on "Bridging the Week, November 11-15, 2013: http://www.garydewaalandassociates.com/?p=1406).

My View: Some argue that requiring mandatory central clearing has simply transferred and concentrated what previously was diversified risk among many financial services firms to a concentrated risk among a few clearing houses. Moreover, clearinghouses still look principally to clearing members to maintain sufficient resources and liquidity to help out when a fellow clearing member or members default. Not only may the economics of clearing not support this investment in the first instance by clearing members, but it's hard to imagine a scenario where the one or two clearing members with the most exposure default, and the remaining clearing members are sufficiently unaffected to contribute sufficient additional funds to help the CCP perform its functions.

• CFTC (US) Settles with Trader for Pre-Arranged Trading and Lying: The US Commodity Futures Trading Commission settled a complaint filed against David Nunn, a registered floor broker with membership on ICE Futures U.S., for engaging in excess of 1,300 simultaneous buy and sell trades from July 2008 and September 2010 between accounts in his name and other accounts where he spoke to the account holder just prior to the trade. This complaint was originally filed on October 18, 2012. Allegedly, the overwhelming majority of trades in the other accounts were opposite Nunn's account, and in 100% of every series of trades, the Nunn account sustained a loss, while the other accounts, a profit. In aggregate, Nunn's account lost approximately US $1.7 Million to the other accounts, but subsequently the other accounts returned approximately US $1 Million to Nunn. This money was returned various ways, including by wire, check or by payment of Nunn's credit card or apartment rental charges, or other expenses. Nunn was also accused to lying to ICE during the course of its investigation when he denied ever being compensated by the other accounts. As part of his settlement, Nunn agreed to pay a fine of US $600,000 and be prohibited from associating with any CFTC registered entity under, or trading any product overseen by, the CFTC. In a related, but separate ICE Futures US proceeding, Nunn was expelled from membership and prohibited directly or indirectly from accessing its markets.


• Developments regarding CFTC Required Taping and Tape Retention Requirements: In response to the CFTC's requirement effective December 21, 2013, that certain industry registrants (including members of contract markets and swap execution facilities) commence recording and archiving for one year all oral communications that lead to a transaction in a commodity interest or a related cash or forward transaction, the CFTC's Division of Market Oversight granted relief last week from compliance to commodity trading advisors who are members of SEFs until May 1, 2014. Separately, the CME reminded members that it no longer offers voice recording services for any newly exchange-installed telephone as of December 21 on its NY and Chicago floors (old phones will continue to be recorded through March 21, 2014); however, it requires all exchange-issued telephones to be recorded, and recordings saved for at least one year. CME has proposed a rule to formalize this requirement that will be effective January 6, pending CFTC review.
   
• ESMA Issues Revised Instructions Regarding Reporting of On-Exchange Derivatives: The European Securities and Markets Authority updated its EMIR Q&As with updated information regarding the reporting of on-exchange derivatives transactions. As of February 12, 2014, both parties to each derivatives transaction must report to a trade repository, whether the transaction occurs on or off-exchange. The revised Q&A's address which firms have to report their exchange-traded transactions and what information needs to be included.
   
• FATF Updates Advisory on Jurisdictions with AML or Terrorism Financing Deficiencies: The Financial Action Task Force has updated its list of jurisdictions with Anti-Money Laundering or Combatting Financing of Terrorism deficiencies. Among other matters, Morocco and Nigeria were removed from the FATF listing and monitoring process, Vietnam was cited for progress in addressing its FATF action plan, while issues were identified with Algeria and Iraq.
   
• FINRA Fines Deutsche Bank Securities Related to Lending Activities to Support Prime Broker Activities: FINRA fined Deutsche Bank Securities, Inc. (DBSI) US $6.5 Million for financial and operational deficiencies from 2009 through 2012, in connection with its lending programs to mostly hedge fund prime broker clients through its London affiliate, Deutsche Bank AG London (DBL). Among other things, FINRA found during its 2009 examination of DBSI that it owed US $9.4 Billion to DBL; however FINRA could not assess which portions of this amount were related to customer or proprietary activities. DBSI also performed miscalculations that caused it to overstate its capital or to set aside insufficient funds in its customer reserve account for the protection of its customers.
   
• FRB (US): Beware of Risk Transfers That May Not Transfer Risk: The US Board of Governors of the Federal Reserve System last week issued a guidance regarding certain risk transfer activities by large financial institutions where the institutions' risk-based capital framework may not adequately capture the residual risks to such entities subsequent to such transfers. The two types of transfers cited by the FRB as problematic were where a firm transfers the risks of a portfolio to (1) a thinly capitalized special purpose vehicle that on its own is unable to absorb losses equal to the risk-based capital requirement for the risk transferred, or (2) an unconsolidated sponsored affiliate of the firm because of the firm's ongoing implicit obligation to provide capital in case of financial stress. In the first circumstance, the FRB expects firms to maintain sufficient capital to cover any residual risk in excess of the SPV's loss-absorption capacity, in the second circumstance the FRB discourages such transfer entirely because of the transferor's firm relationship with the transferee firm. According to the FRB, "[f]irms engaging in such transactions should presume for the purpose of their internal capital adequacy assessment as well as for capital planning purposes that no risk transfer has occurred."
   
• Sentinel Trustee Files Motion to Recover Funds from BONY: During August 2012, the United States Court of Appeals for the Seventh Circuit ruled that another trial must be held to determine whether (1) Bank of New York (now BNY Mellon) appropriately protected itself by asserting a lien on assets of Sentinel Management Group, an investment manager that filed bankruptcy in 2007, or alternatively, whether (2) BONY was aware that Sentinel inappropriately was using protected customer assets to secure its lien, in which case it must return US $312 Million, the value of collateral it held. On December 16, the Sentinel Liquidation Trustee filed a motion in a Federal Bankruptcy Court in Illinois requesting that this sum and interest be paid to it. Sentinel itself was registered during the relevant time with the CFTC as an FCM and was required to comply with the CFTC's customer funds' protection requirements like all other FCMs in connection with its handling of customer assets. Prior to filing for bankruptcy, Sentinel maintained a credit line at BONY for its proprietary activities, and granted a lien to BONY on certain of its assets for this. However, at the time of bankruptcy, Sentinel commingled customer and non-customer assets contrary to law.
   
• SFC (HK) Fines HSBC Securities Brokers (Asia) HK $5 Million Related to Inaccurate Licensing Application: The HK Securities and Futures Commission fined HSBC Securities Brokers (Asia) Limited HK $5 Million (US $645,000) because it incorrectly described certain proposed activities to it retail clients in a licensing application. When in May 2010 the firm submitted a licensing application to the SFC, it indicated that it would require retail customers affirmatively to opt-in to trades being matched and crossed on an HSBC crossing service.  However, subsequently (during December 2010), HSBC determined to require customers affirmative to opt-out of such service, and never amended their licensing application to reflect that. HSBC received an appropriate SFC license based on its original representations during March 2011. Apparently the media reported that HSBC had decided to use an opt-out approach during July 2011.

Compliance Weeds: Periodically, and probably no less than once a year, registrants should assess membership and registration applications to ensure that representations regarding businesses are still accurate. If not, determine whether a dialogue needs to be had with the relevant regulator and/or an amendment filed.

• Department of Treasury (US) Issues Report Citing Risks of Automated Trading Systems, including High Frequency Trading Systems: The Office of Financial Research of the US Department of Treasury issued its 2014 annual report where, among other things, it discussed the risk it perceives to the financial systems posed by the increasing role of automated trading systems, including high frequency trading. Among other risks it cites are liquidity risk ("…the exit of high-frequency traders during times of market stress could reduce liquidity) and price discovery ("[t]he proliferation of trading in private market venues such as single-dealer trading platforms and dark pools… may be tied to the rise of high-frequency trades."); and increased market volatility. OFR also expressed concern about the risk management measures used by HFT firms because "…they are not well understood and require further investigation, particularly regarding controls, capital and the framework for assessing intraday positions that change rapidly."

My View: I think the Future Industry Association's response to the CFTC's Concept Release on Risk Controls and System Safeguards for Automated Trading must have crossed in the mail with this OFR report. Although OFR identifies some potential issues with ATS, they are not unique to high frequency trading. Also, many of the issues already have been materially addressed, in the case of the securities industry, by rule, or in the case of the futures industry through voluntary best practices adopted by firms, or firms pro-actively instituting protective measure as a result of being increasingly worried by potential blow-ups or enforcement actions. (For more see, see the FIA submission at: http://www.futuresindustry.org/downloads/CFTC_Concept_Release_on_Risk_Controls_121113.pdf.)

And finally:

My View: Reflections on 2013

This is the final Bridging the Week segment for 2013. Pending an extraordinary industry development, the next installment will be on January 6, 2014.

It has been fun for me personally to develop the concept of Bridging the Week this year which, since introduced during Spring 2013, has evolved from a video-only presentation, to one now that includes video (with captions) as well as written articles. Typically the video version covers fewer matters but includes more commentary, while the written article version covers more stories and all stories in greater detail.

There have been so many developments this year, it's very hard to pick the top ones, or even assess them as good or bad. It's all one's perspective. However, there is little doubt that the financial industry is in the throes of change. Who will change and how, and what will be the regulators' impact on this – that all will be next year's story (although

I already gave my view to John Lothian regarding the probable evolution of the futures commission merchant model; see http://www.garydewaalandassociates.com/?p=1582).

Until 2014 and the next Bridging the Week, have a great holiday season and try to spend some quality time with friends and family. And read a few good books too – preferably unrelated to this industry!

For further information, see:

Controls related to Anti-Bribery
SEC v. ADM:
http://www.sec.gov/litigation/complaints/2013/comp-pr2013-271.pdf
DOJ Announcement of ADM Subsidiary Guilty Plea:
http://www.justice.gov/opa/pr/2013/December/13-crm-1356.html
FCA matter regarding JLT Specialty Limited:
http://www.fca.org.uk/static/documents/final-notices/jlt-specialty-limited.pdf
Canadian Securities Administrators Proposed Rules Related to Mandatory Clearing of OTC Derivatives:
http://www.osc.gov.on.ca/en/SecuritiesLaw_csa_20131219_91-303_mandatory-counterparty-clearing-derivatives.htm
CFTC Actions related to the International Guidance:
DMO Relief related to SDR Reporting:
http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/13-75.pdf
DSDIO No Action Relief related to Internal Business Conduct Rules:
http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/13-78.pdf
Notice of Comparability Determination and Related Summary:
http://www.cftc.gov/PressRoom/PressReleases/pr6802-13
Matrix: http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/cptable122013.pdf
Commissioner O'Malia Dissent to Notice of Comparability Determination:
http://www.cftc.gov/PressRoom/SpeechesTestimony/omaliastatement122013
CME Disciplinary actions:
Barclays:
http://www.nfa.futures.org/basicnet/Case.aspx?entityid=0228758&case=11-8645-BC&contrib=CBOT
Kenneth Bell:
http://www.nfa.futures.org/basicnet/Case.aspx?entityid=0271296&case=12-8782-BC&contrib=CBOT
West Fraser Mills:
http://www.nfa.futures.org/basicnet/Case.aspx?entityid=0471703&case=12-8850-BC&contrib=CME
CME Proposed Liquidity Rule:
http://www.cmegroup.com/market-regulation/files/13-565R.pdf
ConvergEx Matters:
SEC v. ConvergEx Brokerages
http://www.sec.gov/litigation/admin/2013/34-71128.pdf
SEC v. Two Individual Respondents:
Daspin: http://www.sec.gov/litigation/admin/2013/34-71126.pdf
Lekargeren: http://www.sec.gov/litigation/admin/2013/34-71127.pdf
DOJ Announcement of ConvergEx Subsidiary and Two Employees Guilty Plea:
http://www.justice.gov/opa/pr/2013/December/13-crm-1328.html
ESMA Revised Q&As Regarding Reporting:
http://www.esma.europa.eu/system/files/2013-1959_qa_on_emir_implementation.pdf
FATF Update:
http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-A008.html
FINRA: Deutsche Bank Securities, Inc.:
http://www.finra.org/web/groups/industry/@ip/@enf/@ad/documents/industry/p411638.pdf
FRB Risk Transfer Considerations:
http://www.federalreserve.gov/bankinforeg/srletters/sr1323.pdf
David Nunn Matters:
CFTC action: http://www.cftc.gov/ucm/groups/public/@lrenforcementactions/documents/legalpleading/enfnunncomplaint101812.pdf.
CFTC settlement: http://www.cftc.gov/ucm/groups/public/@lrenforcementactions/documents/legalpleading/enfnunnorder121813.pdf .
ICE Futures US:
http://www.nfa.futures.org/basicnet/Case.aspx?entityid=0065096&case=2010-59&contrib=ICE
OFR 2014 Annual Report:
http://www.treasury.gov/initiatives/ofr/about/Documents/OFR_AnnualReport2013_FINAL_12-17-2013.pdf
In re: Sentinel Management:
Liquidation Trustee Motion:
Available on Request
August 7^th Circuit Court of Appeals Decision:
http://volo.abi.org/in-re-sentinel-management-group-inc-0/opinion
SFC v. HSBC Securities:
http://www.sfc.hk/web/files/ER/PDF/13PR126_statement.pdf
Taping Matters:
CFTC No Action for CTA members of SEFs:
http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/13-77.pdf
CME Proposed Revised Rule:
http://www.cmegroup.com/market-regulation/files/13-564.pdf

The information contained in this article is not legal advice. For legal advice, please consult with your attorney. The information in this article is derived from sources believed to be reliable as of December 21, 2013, but no representation or warranty is made regarding the accuracy of any statement. To ensure compliance with requirements imposed by U.S. Treasury Regulations, Gary DeWaal and Associates LLC informs you that any U.S. tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Gary DeWaal and Associates may represent one or more entities mentioned in this article.

Recent Commentaries

• Bridging the Week has moved.
• Bridging the Week by Gary DeWaal: September 1 to 5 and 8, 2014 (Banks Are the Big News; MF Global; Investment Advisor Conflicts; ISDAfix)
• Between Bridges by Gary DeWaal: CME Group Issues New Rule Regarding Disruptive Trading Practices

Categories

• Between Bridges
• Bridging the Week
• Compliance Weeds
• Culture and Ethics
• Hard to Believe
• Helpful to Getting the Business Done
• High Frequency Trading
• Managed Money
• My View
• News Developments
• Totally Irrelevant (But Is It?)
• Valuable Lessons Learned

Archives

• September 2014
• August 2014
• July 2014
• June 2014
• May 2014
• April 2014
• March 2014
• February 2014
• January 2014
• December 2013
• November 2013
• October 2013
• September 2013
• August 2013
• July 2013
• June 2013
• May 2013
• April 2013
• February 2013