The CFTC recently announced that it will hold a meeting on November 3rd at 10:30 a.m. Eastern to discuss the following issues relating to end-users:
1) Clarification as to when an agreement, contract or transaction with embedded volumetric optionality falls within the forward contract exclusion from the definition of a swap;
2) Conforming the application of the CFTC’s recordkeeping requirements under CFTC Rule 1.35(a) to commodity interests and related cash or forward transactions with no-action relief previously provided by the Division of Swap Dealer and Intermediary Oversight (presumably in CFTC Letter 14-72)
3) The relationship between when end-users will be required to post collateral and changes to timing issues related to what is known as the “residual interest deadline” that applies to futures commission merchants (FCMs). (As background, the residual interest represents proprietary funds of the FCM that are deposited into its customers segregated margin accounts, in order to protect the FCM’s customers.)
In a statement from earlier this week, CFTC Chairman Massad explained that, “These are not major changes, but they are significant in making sure that manufacturers, farmers, ranchers, and other companies that rely on the derivatives markets to hedge routine business risks can continue to use them efficiently and effectively.”
Information about the meeting’s location, as well as dial-in information, can be found at the CFTC’s Press Release announcing the meeting.
Good day. Good dialing or participating in person, as applicable to you. DR2