The Derivatives in Review highlights important legal, regulatory and other newsworthy developments in the area of derivatives.
NYDFS Finalizes BitLicense Regulations
On June 3, 2015, the New York Department of Financial Services released its final BitLicense regulations, which it described as "the first comprehensive framework for regulating digital currency firms." The NYDFS originally released proposed BitLicense regulations on July 17, 2014. After receiving thousands of public comments, primarily voicing concern over the possible scope of regulation, the NYDFS made major revisions and released re-proposed BitLicense regulations on February 4, 2015. Read More.
CFTC Issues Proposed Rule Reducing Trade Option Obligations for End-Users
On May 7, 2015, the Commodity Futures Trading Commission published in the Federal Register a proposed rule that would reduce the reporting and recordkeeping burdens of end-users engaging in commodity trade options. Read More.
SEC Proposal on Security-Based Swaps Arranged, Negotiated, or Executed in the United States
On May 13, 2015, the Securities Exchange Commission proposed a rule and rule amendments relating to certain security-based swaps arranged, negotiated, or executed by U.S. personnel. This proposed rule governs, among other things, the regulation of a security-based swap that is (i) entered into between two non-U.S. persons but (ii) "arranged, negotiated, or executed by personnel located in a U.S. branch or office or in a U.S. branch or office of an agent." Read More.
CFTC Exempts Certain Wholly-Owned Securitization SPVs from Mandatory Clearing
On May 4, 2015, the Division of Clearing and Risk of the Commodity Futures Trading Commission issued a no-action letter clarifying that securitization special purpose vehicles that are wholly-owned by, and consolidated with, a "captive finance company" are eligible for the "end-user exception" in connection with clearing determinations issued by the CFTC under Section 2(h) of the Commodity Exchange Act. The auto securitization industry has been particularly focused on the interpretive relief provided by this letter. Read More.
IRS Proposes to Revise the Treatment of Nonperiodic Payments
On May 8, 2015, the IRS and the Treasury Department issued proposed and temporary regulations relating to the treatment of notional principal contracts with non-periodic payments. These regulations are designed to resolve questions that have arisen with the enactment of the Dodd-Frank legislation. Read More.
UPCOMING EVENT: Orrick Breakfast Briefing: BitLicense and the Virtual Currency Regulatory Landscape
What does the BitLicense require and how will the newly finalized New York State BitLicense regulations affect participants in the virtual currency space? In addition to BitLicense, what regulatory requirements are being developed or imposed in other jurisdictions? This program is meant to inform businesses, investors, entrepreneurs, lawyers and others on the state of virtual currency regulation. New York CLE credit will be offered. Date to be announced.
For more information on this event, please click here.
