Shearman & Sterling LLP | Financial Regulatory Developments Focus | US Commodity Futures Trading Commission Chief of Staff Provides Project KISS Update
Financial Regulatory Developments Focus
  • US Commodity Futures Trading Commission Chief of Staff Provides Project KISS Update
    The Commodity Futures Trading Commission Chief of Staff Michael Gill provided an update on the CFTC's Project KISS initiative at the CFTC KISS Policy Forum in Washington, D.C. He said that after a thorough review of public comments received through the initiative, the Commission has broken the recommendations down into three tiers: (1) simple housekeeping changes with no discretionary policy adjustments; (2) suggestions reducing regulatory burdens with minor policy implications; and (3) initiatives that have more significant policy implications. Through the Project KISS review process, the CFTC is only focused on the first two tiers, although suggestions in the third tier will be addressed at a later date, Gill said.

    The proposals cover a wide range of policy issues across the CFTC's divisions. The Division of Clearing and Risk is examining the process through which the CFTC grants exemptions from derivatives clearing organization registration, amendments to various DCO regulations and extensive proposed amendments to current Part 190 regulations.

    Proposed changes being considered by the Division of Market Oversight include re-proposing guidance on peaking supply contracts, clarifying when an entity must submit a notice filing to claim an exemption from aggregation of position limits, publishing “hard coded” reporting levels on the CFTC website instead of under Part 15 regulations and updating and improving several no-action letters regarding swap execution facilities under Part 37. Gill also mentioned that the Commission is working to tailor swap data reporting rules to eliminate redundancy, streamline reporting and harmonize international requirements.

    Proposed changes being considered by the Division of Swap Dealer and Intermediary Oversight include codifying no-action letters for swap dealer trading activity, improving efficiencies within swap dealer business conduct standard rules, codifying no-action letters and staff interpretations regarding futures commission merchants’ receipt and holding of customer funds and amending Part 4 regulations to codify no-action letters regarding commodity pool operator and commodity trading advisor registration exemptions.

    Gill said CFTC staff aims to provide recommendations for specific actions regarding these proposals over the course of the next year.

    View CFTC Chief of Staff Michael Gill’s speech.
    TOPIC: Derivatives