Bridging the Week - March 2016 #3

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Industry Comments to Regulation AT Argue CFTC Proposed Rules Too Prescriptive; Registration and Source Code Requirements Particularly Objectionable

After declining multiple requests to extend the comment period that expired on March 16, the Commodity Futures Trading Commission received approximately 50 written responses to its proposed Regulation Automated Trading. A wide range of responders, including trade organizations, vendors, market participants, public interest groups and individuals, wrote comments.

Although responders generally approved of the CFTC’s objective of ensuring robust controls, transparency measures and other safeguards to mitigate risks arising from algorithmic trading on designated contract markets, the majority of comment letters criticized the proposed rules as too prescriptive.

The most passionate specific objections were raised regarding proposed requirements mandating that certain persons engaged in algorithmic trading who directly access DCMs be registered as floor traders, and that all so-called AT Persons maintain source code in a distinct repository subject to inspection by CFTC and Department of Justice staff. (AT Persons, as defined by the CFTC’s proposed regulation, would include most current registrants, including commodity trading advisors and commodity pool operators, who engage in algorithmic trading on or subject to a DCM’s rules.) Those raising these concerns claimed that registration requirements were unnecessary and that it was untenable that source code could be made so easily available, thereby potentially exposing the lifeblood of a trading business to ruinous inadvertent disclosure to third parties, including competitors.

Regulation AT was proposed by the CFTC November 24, 2015. (Click here for a comprehensive overview of Regulation AT in the article, “CFTC’s Proposed New Algorithmic Trading Rules Augur Potential Increased Obligations and Costs, and a New Registration Requirement” in the November 29, 2015 edition of Between Bridges.)

The two longest comment letters in response to proposed Regulation AT were submitted by FIA and CME Group.

FIA argued, among other things, “that all electronic trading should be subject to pre-trade and other risk controls appropriate to the nature of the activity” and not just the algorithmic trading of the limited universe of persons captured by the CFTC’s proposed regulation. This does not mean, said FIA, that every market participant should be required to implement his or her own risk measures. However, all electronic orders should be subject to “appropriate controls,” said the industry organization. Futures commission merchants or DCMs could provide these controls, wrote FIA.

FIA urged the CFTC to consider breaking apart its rule-making into three components. One would address pre-trade and other risk controls that the industry organization argued could likely be implemented most quickly (although any requirements should be more principles-based). The other two components would address (1) policies and procedures related to the development, testing and deployment of algorithmic trading and (2) registration, if necessary. In general, FIA argued that the CFTC’s proposals were too prescriptive and should be more principles-based.

FIA also objected to Regulation AT’s proposed requirement that all AT Persons use enhanced self-trade prevention measures, claiming that the incidence of problematic self-matching today is insignificant.  

In addition, FIA said that Regulation AT’s proposal requiring annual reports to be prepared by AT Persons and clearing FCMs and filed with DCMs were very burdensome, and for FCMs, redundant of annual reports they already are required to prepare. Moreover, argued FIA, DCMs would be “unable to meaningfully process and analyze the wide variety of policies and procedures related to the development and compliance of Algorithmic Trading Systems” that would be addressed in such reports.

CME Group questioned the fundamental benefit of Regulation AT. According to CME Group,

we believe that much of the well-intentioned Proposal is unwarranted and could be unnecessary … In our view, the Proposal does not provide a clear justification for why additional federal regulation is necessary or appropriate and how the new rules would fulfill [the CFTC’s] objectives in a workable manner.

CME Group also said that, despite being promoted as principles-based, the proposed Regulation AT was very prescriptive, requiring “specific performance approximately 87 times.” In general, CME Group argued that current requirements and practices afforded markets sufficient protection, and additional requirements proposed by the CFTC would be very expensive to implement and maintain.

The Managed Futures Association argued that CTAs and CPOs should be excluded from the “focus and scope” of Regulation AT. As an alternative, MFA recommended that the CFTC

...direct the National Futures Association to promulgate CTA/CPO regulatory requirements on operational system risk controls … If necessary, the Commission should amend its Part 4 regulations to address CTA/CPO operational systems risk concerns related to algorithmic trading in a manner suitable for CTA and CPO businesses and operations.

The Commodity Markets Council objected to the CFTC’s proposed definition of algorithmic trading that it implied could potentially impose many of the requirements of Regulation AT on commercial end users if they were deemed to engage in direct electronic access. This is because the definition captures “basic” order management functionality used by commercial firms “to implement trading decisions and parameters by which [a] specific order type is executed, which are determined by a natural person.” These functionalities, said CMC, include auto-spreaders to help commercial firms “create and trade synthetic calendar, inter-product and inter-exchange spreads;” iceberg or reserved quantity orders to help a firm bring “significant hidden liquidity” to a market by execution of a number of smaller orders; and trailing limits orders that constantly re-price certain orders at a fixed interval from the then prevailing market price. CMC expressly requested that the CFTC “categorically exclude” from the definition of algorithmic trading order management functionality (as opposed to order generation systems).

Trading Technologies also questioned the proposed definition of DEA, saying that it ignored many of the ways traders routed orders to DCMs, and an “FCM’s complete control over user set-up and risk management tools” in connection with many of these means. TT also argued that the utilization by the CFTC of its proposed rules regarding source code would “likely constitut[e] an unconstitutional taking of individuals’ property and is generally unnecessary to achieve the goal of the proposed regulations.”

Contrariwise, some commentators were generally supportive of proposed Regulation AT or thought it did not go far enough. According to Better Markets, for example,

The requirement for registration of Automated Trading firms is common sense and straight forward, and furthermore we are pleased to see the focus on several important safeguards that we have advocated in the past, such as the message throttles and the Commission access to algorithm source code.

Americans for Financial Reform similarly argued that “the self-regulatory approach taken [by the CFTC] falls far short of limits on the most dangerous and predatory practices made possible by automated trading technology.”

However, the Intercontinental Exchange cautioned that if not drafted and implemented correctly, Regulation AT could hurt and not help markets. A badly drafted Regulation AT, said ICE, “has the potential to disrupt currently effective risk management safeguards and may stymie the development of new and innovative methods of risk management.”

In a speech last week before the FIA’s annual International Futures Industry Conference in Boca Raton, Florida, CFTC Chairman Timothy Massad expressed his “hope” that the Commission would finalize Regulation AT by year-end. He promised that any final rule would respect and protect the confidentiality of source code “while at the same time ensuring that source code is preserved and is available to us when we need to reconstruct market events.”

My View: It was an error for the CFTC not to extend the comment period for Regulation AT. The proposed rule represents one of the most important and complex initiatives by the CFTC in recent years and it was wrong for the Commission not to provide additional time for more careful and detailed responses.

Although the CFTC’s objectives of mitigating market risk attributable to algorithmic trading and increasing transparency are laudable, the proposed rule mostly federalizes existing requirements of DCMs and the National Futures Association while adding many new prescriptive requirements that do not easily accord with existing market structure and practices (let alone where market structure and practices may evolve).

Like Charles Dickens’ observation in A Tale of Two Cities that “it was the best of times, it was the worst of times,” Regulation AT is both too overreaching and not reaching enough. It proposes too many onerous obligations on too many market participants solely because they are a registrant, but it fails to recognize that risk controls and other safeguards should apply to all electronic trading, regardless of whether the trader is registered or not.

Because the CFTC did not grant an extension for views, commentators could not prepare adequate cost and benefit analyses. However, as suggested by some commentators, the likely costs of Regulation AT are substantially greater than estimated by the CFTC.

If the CFTC believes there is a gap in existing regulations and wants to formalize and enhance existing industry safeguards around algorithmic trading systems, the better course would be for it solely to amend existing core principles for DCMs to require them to expressly impose appropriate requirements on members and non-members around such systems to protect their markets and ensure robust audit trails of orders. If the CFTC believes it needs to ensure better controls by gatekeepers of traders to DCMs (e.g., FCMs), it could consider principles-based amendments to existing risk-management rules.

In any case, the scope and complexity of Regulation AT, as proposed, is too great to be implemented as is. Although staff of the CFTC is to be commended for yeoman’s work in endeavoring to craft a simple but comprehensive set of rules to implement the Commission’s valid objectives, in the end, Regulation AT endeavors to accomplish too much and too little at the same time!

Briefly:

  • CFTC Approves Substituted Compliance Framework for EU Based DCOs; EC Formally Recognizes US CCPs as Subject to Equivalent Regulation: The Commodity Futures Trading Commission issued an express determination that certain laws and regulations of the European Union applicable to clearinghouses are comprehensive and comparable to those under which clearinghouses registered with the CFTC operate. As a result, going forward, the CFTC will permit European-based clearinghouses that are registered with it as derivatives clearing organizations and also overseen by a European national regulator to comply with local requirements to satisfy equivalent CFTC requirements regarding their financial resources, risk management practices, settlement procedures and default rules and procedures. The CFTC made this determination despite noting that, under its regime, future commission merchants must calculate initial margin for cleared customers on a gross as opposed to a net basis and that clearinghouses must collect additional margin for non-hedge positions of their customers. Neither requirement exists in the EU. The CFTC also observed that, while under its regime, customers of FCMs are shielded from losses by an FCM’s affiliates, in the EU customers of a broker are potentially exposed to proprietary trading losses. To help effectuate the CFTC’s determination, staff of the Division of Clearing and Risk also issued n0-action relief to EU-based DCOs from compliance with certain CFTC requirements for their non-FCM clearing members. Simultaneously with the CFTC’s and staff’s actions, the European Commission issued a formal determination that the CFTC has equivalent requirements as the EU in overseeing clearinghouses (CCPs). This paves the way for DCOs to apply to the European Securities and Markets Authority for recognition to clear exchange-derivatives transactions for EU-based persons and to obtain “qualifying CCP status” so that European banks will not have to take a large capital charge to clear transactions through them. Both the CFTC’s and the EC’s adopted measures follow announcement on February 10, 2016, of their “common approach for trans-Atlantic CCPs.” (Click here for background on the common approach in the article, “Common Approach to Transatlantic CCPs Finally Agreed by EC and CFTC” in the February 14, 2014 edition of Bridging the Week.)
     
  • Fund Manager Resolves CFTC Charges Related to Material Misstatements and Omissions by Agreement to Pay Over US $5.65 Million in Disgorgement and Fine: Equinox Fund Management, LLC settled charges brought by the Commodity Futures Trading Commission that, from 2004 to March 2011, it made material misstatements and omissions in connection with its operation of a multi-advisor commodity pool known as the Frontier Fund. The CFTC alleged that, during the relevant time period, Equinox, a CFTC-registered commodity pool operator, assessed management fees based on the value of the Frontier Fund’s notional assets (i.e., invested assets plus leverage). However, the Fund’s disclosure documents advised investors that management fees would only be assessed on the fund’s net asset value. In addition, the 2010 annual report for the Frontier Fund said that the value of certain over-the-counter options held by the fund were “corroborated by weekly counterparty settlement values,” when this was not the case. The CFTC’s enforcement action followed by two months Equinox’s settlement of a similar action brought by the Securities and Exchange Commission for the same underlying facts. (Click here for details regarding the SEC’s lawsuit in the article, “Fund Manager Sanctioned by SEC for Overcharging Fees and Misleading Investors About Asset Valuation” in the January 24, 2016 edition of Bridging the Week.) To resolve the CFTC lawsuit, Equinox agreed to pay a fine of US $250,000 and disgorgement of $5.4 million. However, Equinox may offset any disgorgement payment it makes dollar-for-dollar under the terms of its settlement with the SEC to its obligation under its CFTC settlement.
     
  • Investment Adviser Agrees to Pay More Than US $9.5 Million to SEC for Steering Clients to Funds’ Share Classes With Higher Fees When Share Classes With Cheaper Charges Available: Three dually registered broker-dealers and investment advisers – FSC Securities Corporation, Royal Alliance Associates, Inc., and SagePoint Financial, Inc. – settled charges brought by the Securities and Exchange Commission that, from October 2012 to 2014, they invested client funds in mutual fund share classes with higher expenses, when they could have invested the client funds in share classes of the same funds with lower expenses. As a result, the respondents received approximately US $2 million more in fees. The SEC charged the respondents with failing to disclose in a required filing with it (i.e., Form ADV) that they “had a conflict of interest due to a financial incentive to place … clients in higher-fee mutual fund share classes.” The SEC also charged respondents with not adopting any compliance policy regarding mutual fund share class selection. To resolve the SEC’s complaint, the respondents agreed, jointly and severally, to disgorge the amount of extra fees they received plus interest (approximately US $2 million) and to pay a fine of US $7.5 million. Each of the respondents are indirect subsidiaries of American International Group Inc.
     
  • CFTC Adopts Final Trade Option Rule and Eliminates Certain Reporting and Recordkeeping Requirements for Commercial End Users: The Commodity Futures Trading Commission issued a final rule to formally eliminate certain reporting and recordkeeping requirements for qualified persons not registered with it as swap dealers or major swap participants who enter into trade options with other similar non-registrants. In general, trade options are a type of over-the-counter commodity options that are exempt from most of the requirements of OTC products following passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act. However, trade options are subject to certain swaps reporting requirements or, for non-SDs and non-MSPs, until recently, less onerous reporting requirements utilizing a Form TO. Less than one month ago, staff of the CFTC eliminated the reporting requirements for non-SDs and non-MSPs. The instant rule amendment formalizes this action. Under the CFTC’s rule amendment, non-SDs and non-MSPs will not be subject to even the less onerous swaps reporting requirements and Form TO will be eliminated. In addition, the rule amendment eliminates any swaps-related recordkeeping requirements for non-SDs and non-MSPs in connection with trade option activity, although such entities will be required to provide counterparties who are SDs or MSPs a legal entity identifier. The CFTC also eliminated references in its rules that trade options are subject to position limit requirements. The amended rule will become effective upon publication in the Federal Register. (Click here for a description of trade options and details regarding the CFTC’s staff prior no action relief in the article, “CFTC Provides Reporting Relief to Trade Option Users” in the February 21, 2016 edition of Bridging the Week. Click here for additional information on the amended rule in the article, “CFTC Approves Final Rule Eliminating Certain Reporting and Recordkeeping Requirements for Trade Option End-Users” in the March 18, 2016 edition of Corporate & Financial Weekly Digest by Katten Muchin Rosenman LLP.)
     
  • Retail Forex Dealer Fined by CFTC for Failing to Meet Minimum Capital Requirements and Notification Requirement; Agrees to Withdraw Membership to Resolve Parallel NFA Charges: IBFX, Inc., a Commodity Futures Trading Commission registered Retail Foreign Exchange Dealer and Swap Dealer, resolved charges brought both by the CFTC and the National Futures Association that it failed to meet minimum capital requirements from January 15, 2015, through February 5, 2015, and did not immediately notify each regulator of its failure, as required. According to each regulator, IBFX’s failure resulted from the unexpected decision of the Swiss National Bank to no longer maintain the Swiss franc at a fixed exchange rate with the Euro on January 15, 2015, and the subsequent collapse in value of the Swiss franc. As a result, customers of an IBFX affiliate, IBFXAU Australia Pty Ltd., sustained losses of approximately US $4 million that IBFXAU then owed to but did not pay to IBFX. However, IBFX did not fully recognize this shortfall, as well as the fact that it was actually undercapitalized by as much as US $9 million during the relevant time, until it completed its month-end reconciliation for January 2015. As a result, charged both regulators, IBFX did not notify the CFTC and NFA that it failed to maintain minimum capital requirements during the relevant period until February 5, 2015. In addition, NFA charged IBFX and Herbert Walton, IBFX’s chief compliance officer, with IBFX’s failure to adopt and implement “effective procedures to adequately monitor the firm’s compliance with applicable SD regulatory requirements” and with failure to take reasonable steps to ensure IFBX implemented an adequate risk management program. To resolve the CFTC’s complaint, IBFX agreed to pay a fine of US $1 million. However, to resolve NFA’s charges, IBFX also agreed to withdraw its NFA membership by March 30, 2016. NFA’s complaint against Mr. Walton was dismissed with prejudice.

Compliance Weeds: Both RFEDs and futures commission merchants have numerous ongoing reporting and ad hoc notification requirements to the CFTC and their designated self-regulatory organization. Events triggering notice requirements typically require filings within very short time periods. For examples, FCMs are required to provide immediate notice to the CFTC and the firm’s DSRO if they do not meet their minimum capital requirement; when a carried omnibus account must be liquidated or transferred due to its failure to meet a margin call; if an account is under margined by an amount greater than the FCM’s net capital; when customer funds held by the FCM are less than the amounts required to be held; and various other circumstances. Notification requirements for certain other events are on the same day, within 24 hours or within two business days. RFEDs and FCMs must be aware of all events requiring notice filings with the CFTC and their SRO as well as the timing requirement for any necessary follow-up. Although sometimes firms only discover an event requiring an immediate or prompt notice filing after a notice-filing deadline, a bad situation should not be made worse by unnecessarily delaying a required filing following a late discovery. (Click here for a chart of FCM ongoing and notice requirements, and here for a chart of RFED ongoing and notice requirements.)

  • IB and Principal Fined for Fabricating and Lying About Email Purportedly From NFA: Hollencrest Securities and Peter Pellizzon, a part owner and principal of Hollencrest, agreed to sanctions and findings by the National Futures Association related to the fabrication of a story to NFA about the alleged registration of a Ayako Hanyu, a Hollencrest employee. According to NFA, in December 2011, Ms. Hanyu applied to NFA to be registered as an associated person; however, her application was withdrawn in March 2012. Subsequently, in March 2015, charged NFA, Nita Charlton-Gomes, a senior vice president and the human resources manager for Hollencrest, advised NFA that Ms. Hanyu’s AP application had been erroneously withdrawn by NFA and asked that it be reinstated. As evidence, Ms. Charlton-Gomes sent NFA an email that she claimed she had received from Chris Collins, an NFA employee, on August 3, 2012, purportedly approving Ms. Hanyu’s registration. Subsequently, after an investigation, NFA learned that Ms. Charlton-Gomes had fabricated the email and had confessed this to Mr. Pellizzon in August 2015. However, Mr. Pellizzon did not advise NFA of this until the following month, claimed NFA. To resolve the charges, Hollencrest agreed to pay a fine of US $125,000 while Mr. Pellizzon consented to findings that he failed to observe high standards of commercial honor and just and equitable principles of trade.

And more briefly:

  • Former Chicago Fed Employee Pleads Guilty to Stealing Confidential Financial Data Prior To Leaving Position: Jeffrey Cho, a former Senior Supervision Analyst with the Federal Reserve Bank of Chicago, pleaded guilty to stealing approximately 35 documents containing confidential financial and other information while he was interviewing for employment and after he accepted a job offer with a private company. Mr. Cho’s sentencing is scheduled for June 21, when he could be fined up to US $100,000 and sentenced to up to one year imprisonment. Last year, Rohit Bansal, a former employee of Goldman, Sachs & Co and the New York Federal Reserve Bank, and Jason Gross, a former employee of the New York Fed only, pleaded guilty to charges related to the unauthorized use of non-public confidential information by Mr. Bansal while employed by Goldman which he obtained from Mr. Gross. (Click here for details of this matter, in the article, “Investment Bank Group Fined US $50 Million by NY State Agency for Actions of Malfeasant Employee” in the November 1, 2015 edition of Bridging the Week.)

My View: This case provides a good example of why proprietary trading firms are scared to death to provide source code to regulators, as proposed by the Commodity Futures Trading Commission in Regulation Automated Trading. (Click here to access full background.)

  • UK SFO Ends Forex Investigation: The UK Serious Fraud Office announced it closed its criminal investigation into allegations of fraudulent conduct in the foreign exchange market that initially had been referred by the UK Financial Conduct Authority in July 2014. In November 2014, the Commodity Futures Trading Commission and the FCA brought enforcement actions against five financial institutions for attempted manipulation of foreign exchange benchmark rates that occurred from 2008 to 2013. Collectively, the banks paid over US $3.1 billion to resolve these complaints — US $1.4 billion to the CFTC, and GBP 1.1 billion (approximately US $1.7 billion) to the FCA. (Click here to access details of these enforcement actions in the article, “Five Banks Penalized US $3.1 Billion by CFTC and UK FCA for Attempted Manipulation of FX Benchmark Rates; OCC Fines Two of the Banks and One More an Additional US $950 Million” in the November 16, 2014 edition of Bridging the Week.)
     
  • Two Non-US-Based Firms Charged by CFTC With Fraud and Other Violations for Marketing and Sales of Off-Exchange Binary Options to US Persons: The Commodity Futures Trading Commission filed a lawsuit in a federal court in Illinois against Vault Options Ltd. and Global Trader 365, non-US-based web companies, for allegedly marketing and executing illegal off-exchange binary options for US persons. The options were intended to benefit from future price changes in various commodities, foreign currency pairs and stock indices. The CFTC seeks an injunction against the respondents and monetary penalties.
     
  • Swap Trade Confirmation Relief Extended by CFTC: Staff of the Commodity Futures Trading Commission extended previously granted relief to swap execution facilities from a requirement that a SEF obtain certain documents referenced in trade confirmations it issues related to certain uncleared swaps transactions prior to actually issuing the confirmation. Specifically, a SEF may incorporate by reference terms of agreements previously negotiated by counterparties without actually having first received copies of such documents. (Click here for additional details of this no-action relief in the article, “CFTC Extends No Action Relief for SEFs With Respect to Certain Uncleared Swaps Transactions” in the March 18, 2016 edition of Corporate & Financial Weekly Digest by Katten Muchin Rosenman LLP.)
     
  • FINRA Issues Recommendations on Digital Investment Advice: The Financial Industry Regulatory Authority issued a report on the use of digital investment advice “to share effective practices” regarding technology management, portfolio developments and the mitigation of conflicts of interest. (Digital investment advice tools permit financial advisors or their clients to manage an investor’s portfolio, allocate assets, execute trades, rebalance portfolios and analyze portfolios, among other activities.) FINRA expressly said it was not creating new legal requirements through publication of this report.

For more information, see:

CFTC Adopts Final Trade Option Rule and Eliminates Certain Reporting and Recordkeeping Requirements for Commercial End Users:
http://www.cftc.gov/idc/groups/public/@newsroom/documents/file/federalregister031616b.pdf

CFTC Approves Substituted Compliance Framework for EU Based DCOs; EC Formally Recognizes US CCPs as Subject to Equivalent Regulation:
CFTC Comparability Framework:
http://www.cftc.gov/idc/groups/public/@newsroom/documents/file/federalregister031616.pdf
CFTC No Action Relief:
http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/16-26.pdf
EU Equivalence Decision:
http://europa.eu/rapid/press-release_IP-16-807_en.htm

FINRA Issues Recommendations on Digital Investment Advice:
http://www.finra.org/sites/default/files/digital-investment-advice-report.pdf

Former Chicago Fed Employee Pleads Guilty to Stealing Confidential Financial Data Prior To Leaving Position:
https://www.justice.gov/usao-ndil/file/833311/download

Fund Manager Resolves CFTC Charges Related to Material Misstatements and Omissions by Agreement to Pay Over $5.65 Million in Disgorgement and Fine:
http://www.cftc.gov/idc/groups/public/@lrenforcementactions/documents/legalpleading/enf16-09equinoxord31616.pdf

IB and Principal Fined for Fabricating and Lying About Email Purportedly From NFA:
Hollencrest Securities Complaint and Decision:
https://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=4276
https://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=4311
Pellizon Complaint and Decision:
https://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=4277
https://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=4312

Industry Comments to Regulation AT Argue CFTC Proposed Rules Too Prescriptive; Registration and Source Code Requirements Particularly Objectionable:
Chairman Massad Speech:
http://www.cftc.gov/PressRoom/SpeechesTestimony/opamassad-44
Link to All Comment Letters:
http://comments.cftc.gov/PublicComments/CommentList.aspx?id=1646

Investment Adviser Agrees to Pay More Than US $9.5 Million to SEC for Steering Clients to Funds’ Share Classes With Higher Fees When Share Classes With Cheaper Charges Available:
https://www.sec.gov/litigation/admin/2016/34-77362.pdf

Retail Forex Dealer Fined by CFTC for Failing to Meet Minimum Capital Requirements and Notification Requirement; Agrees to Withdraw Membership to Resolve Parallel NFA Charges:
CFTC:
http://www.cftc.gov/idc/groups/public/@lrenforcementactions/documents/legalpleading/enfibfxorder031416.pdf
NFA IBFX Complaint and Decision:
https://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=4251
https://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=4308
NFA Walton Complaint and Decision:
https://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=4252
https://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=4309

Swap Trade Confirmation Relief Extended by CFTC:
http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/16-25.pdf

Two Non-US-Based Firms Charged by CFTC With Fraud and Other Violations for Marketing and Sales of Off-Exchange Binary Options to US Persons:
http://www.cftc.gov/idc/groups/public/@lrenforcementactions/documents/legalpleading/enfvaultcomplaint020216.pdf

UK SFO Ends Forex Investigation:
https://www.sfo.gov.uk/2016/03/15/sfo-closes-forex-investigation

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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