Gary DeWaal

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On August 9, the National Futures Association (NFA) announced the effective date of its recently adopted Interpretive Notice, Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities. The Interpretative Notice will go into effect on October 31 (“Effective Date”).…
On July 26, the Securities and Exchange Commission disapproved a Bats BZX Exchange proposed rule change that would have permitted the listing and trading of shares of the Winklevoss Bitcoin Trust (Trust) on BZX. This is the SEC’s second disapproval of the proposed rule change as it has previously disapproved the exchange’s original proposal in March 2017. Notably, Commissioner Hester Peirce dissented from the SEC’s most recent disapproval.…
On July 20, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission for approval a proposed interpretive notice regarding Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities. The new disclosure obligations will apply to all NFA members engaging in transactions in virtual currency derivatives and virtual currency, as well as other activities in underlying or spot virtual currencies.…
On July 6, the Financial Industry Regulatory Authority published Regulatory Notice 18-20, which encourages member firms to promptly notify FINRA if the firm or any of its associated persons or affiliates engages or intends to engage in any activities involving digital assets, such as cryptocurrencies and other virtual coins and tokens. Digital assets activities include those relating to digital assets that are not securities and the activities under Rule 3270 (Outside Business Activities of Registered…
On August 10, the Commodity Futures Trading Commission (the CFTC) issued no-action relief, eliminating the need for certain persons otherwise required to aggregate positions with certain other persons for CFTC position limit purposes to pro-actively file with the CFTC, beginning August 14, formal written notices supporting disaggregation of positions with such other persons relying on the CFTC’s owned-entity exemption, independent account controller exemption and certain other exemptions from aggregation available under CFTC Rule 150.4(b)(1). Upon…
The Commodity Futures Trading Commission has issued an order granting LedgerX LLC registration as a derivatives clearing organization (DCO). As specified in the order, LedgerX is permitted to clear fully collateralized digital currency swaps. A transaction will be fully collateralized if LedgerX holds, at all times, funds in the form of the required payment sufficient to cover the maximum possible loss a counterparty could incur upon liquidation or expiration of the contract.…
The Commodity Futures Trading Commission has issued an order of registration as a swap execution facility (SEF) to LedgerX LLC. As an SEF, LedgerX intends to list options on Bitcoin and other swaps based on digital currencies. As noted in the order, LedgerX additionally has applied for registration as a derivatives clearing organization. More information is available here.  …
On December 2, the Commodity Futures Trading Commission re-proposed minimum capital requirements for swap dealers (SDs) and major swap participants (MSPs) that are not subject to prudential regulation (Covered Entities). The CFTC had initially proposed capital rules for Covered Entities in 2011 but deferred further action pending finalization and implementation of uncleared swaps margin requirements. The CFTC finalized margin requirements in December 2015 that began being implemented in September 2016.…
On April 13, the Securities and Exchange Commission voted to adopt final rules (the “Final Rules”) implementing business conduct standards and chief compliance officer requirements for security-based swap dealers and major security-based swap participants (collectively, “Swap Entities”). Authority for the SEC to adopt the Final Rules is grounded in Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Final Rules are the SEC equivalent for security-based swaps of the business conduct…
On February 10, the Commodity Futures Trading Commission and the European Commission (EC) announced that they had reached an agreement on a harmonized approach to central clearing counterparties (CCPs). The agreement ensures that EU market participants will be able to continue to use CFTC-registered CCPs without incurring substantial capital changes.…