Commodity-Corner.com is a Murphy & McGonigle resource for those interested in legal developments in the commodities, futures, and derivatives area. The information provided by this site is intended to provide insightful analysis and perspectives, as well as regulatory and enforcement updates and trends, in this increasingly varied and complex industry.
On May 8, 2019, the Division of Enforcement made public its first-ever Enforcement Manual. The Enforcement Manual addresses the various stages of the Division’s investigations and litigations. While much of the Enforcement Manual is rooted from the Commission’s Regulations and still leaves much discretion to Division Staff, its deputies and director, it does shed some light into the Division’s processes and policies. Although the Enforcement Manual does not create any private rights, is not enforceable in court, and is not binding law, it will likely be a useful reference tool for engaging in dialogue with Division Staff during various points of the Division’s investigations and litigations.
On April 18, 2019, Eric Powers of Kern County, California, entered into a consent order with the Financial Crimes Enforcement Network for acting as an unregistered money transmitter. FinCEN determined that Powers’ purchase and sale of Bitcoin for U.S. Dollars in over 1,700 “peer-to-peer” transactions from 2012 through 2014 made him an “exchanger” of convertible virtual currency.
On March 13, 2019, the Senate Agriculture Committee held its hearing on the nomination of Dr. Heath Tarbert to replace current CFTC Chairman J. Christopher Giancarlo, whose term is set to expire in mid-April. Tarbert currently serves as the Assistant Secretary for Institutional Markets at the Treasury Department. With indications of bipartisan support for his nomination, Tarbert is widely expected to be confirmed and to arrive at the CFTC this summer. The hearing provided insights into what is in store for the CFTC’s regulatory and enforcement regimes under Tarbert’s watch.
UPDATE: On July 5,2019, the Senate voted overwhelmingly to confirm Dr. Tarbert to be the CFTC's next chairman. Dr. Tarbert is expected to be sworn in as the CFTC's chairman in mid-July.
CFTC Director of Enforcement James McDonald offered remarks detailing the agency’s intention to investigate “violations of the CEA carried out through foreign corrupt practices.” On the same day, the CFTC issued an Enforcement Advisory related to “Self Reporting and Cooperation for CEA Violations Involving Foreign Corrupt Practices.”
The European Union (“EU”) on Monday, February 25, 2019, agreed to give providers of “critical benchmarks” (e.g., Euribor or EONIA) an additional two years (to December 31, 2021) to comply with the EU’s new benchmark regulation requirements.
On February 7, 2019, the International Organization of Securities Commissions released its final report on Commodity Storage and Delivery Infrastructures: Good or Sound Practices. The Report, which builds upon the findings IOSCO made in its 2016 The Impact of Storage and Delivery Infrastructure on Derivatives Market Pricing report, suggests that regulated bodies such as trading venues and central counterparties, in conjunction with the storage facilities they use for the physical delivery of derivatives that the exchanges and CCPs trade and clear, adopt enhanced practices in the areas of oversight, transparency, fees and conflicts of interest.
On February 13, 2019, the Commodity Futures Trading Commission’s Division of Market Oversight stayed an ICE Futures U.S., Inc. self-certified rule amendment that is designed to build in a delay of the execution of resting, passive orders in the exchange’s gold and silver futures contracts because, in the view of the Division of Market Oversight, the rule amendment poses new and novel issues.
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