CFTC Approves Supplemental Proposal for Proposed Regulation AT

By: Athena Eastwood, Anthony Mansfield, Paul Pantano, Neal Kumar, Natalie Mitchell and Lamiya Rahman

On November 4, 2016, the Commodity Futures Trading Commission (“CFTC” or the “Commission”) approved, by a 2 – 1 vote, a supplemental proposal (“Reg AT Supplemental Proposal”) that amends a 2015 proposed rule related to automated trading (“Proposed Reg AT”).1 The Reg AT Supplemental Proposal includes a 60-day comment period that commences upon publication in the Federal Register.  Unless addressed in the Reg AT Supplemental Proposal, Proposed Reg AT remains the same.  Below is a summary of the key aspects of the Reg AT Supplemental Proposal based upon the discussion at the CFTC’s open meeting along with the fact sheet and Q&A document posted to the CFTC website.2 read more

Posted in CFTC, Commodity Trading

Not Your Grandmother’s Form 40

By Athena Eastwood, Anthony Mansfield, Paul Pantano, Neal Kumar and Natalie Mitchell

A common tool that the Commodity Futures Trading Commission (“CFTC” or the “Commission”) relies upon to conduct market surveillance, including monitoring compliance with position limits, will soon enter the digital age – the Form 40 and Form 40S.  The CFTC’s Division of Market Oversight (“DMO”) will issue the new Form 40/40S pursuant to Special Calls to market participants that hold a reportable position in certain CFTC-regulated futures and swaps markets.  At a high-level, the Form 40/40S requests information about the ownership and control structure of the reportable trader.  read more

Posted in CFTC, Commodity Trading, Enforcement and Investigations, Mining/Metals, Oil & Gas, Regulation

FERC Issues ANOPR on Revisions to Oil Pipeline Indexing Policies and Reporting Requirements

By Mark Haskell, Brett Snyder and Lamiya Rahman

On October 20, 2016, the Federal Energy Regulatory Commission (“FERC” or “Commission”) issued an advanced notice of proposed rulemaking (“ANOPR”) seeking comments on potential revisions to (1) the Commission’s policies for evaluating oil pipeline indexed rate changes; and (2) the reporting requirements for page 700 of FERC Form No. 6, Annual Report of Oil Pipeline Companies.

Initial Comments are due 45 days after the ANOPR is published in the Federal Register, and Reply Comments are due 90 days after publication.   read more

Posted in FERC, Oil & Gas, Regulation

Supreme Court Justices Appear Hesitant to Narrow the Scope of Insider Trading Liability

Since the Second Circuit Court of Appeals’ December 2014 decision in United States v. Newman, the government’s ability to aggressively pursue insider trading cases involving tipping has been in doubt.  But, on October 5, the Supreme Court heard oral arguments in Salman v. United States, a case that should clarify the government’s burden in proving insider trading cases against tippers and tippees.  read more

Posted in Cases, Commodity Trading, LNG, Mining/Metals, Oil & Gas, Power

CFTC Issues Fourth Penalty for Inaccurate Large Trader Reporting of Swaps

By Anthony Mansfield, Paul Pantano, Jonathan Flynn and Natalie Mitchell

On September 27, 2016, the U.S. Commodity Futures Trading Commission (“CFTC” or the “Commission”) issued a fourth penalty for violations of its Swaps Large Trader Reporting (“Swaps LTR”) rule.  This time, the penalty was imposed against Wells Fargo Bank, N.A. (“Wells Fargo”).  As we noted in July, the CFTC is continuing on its trend toward more aggressive enforcement of reporting violations, including violations of the particularly complex and technical Swaps LTR rule. Compliance professionals should continue to review their reporting processes, including Swaps LTR, to confirm that they conform to the CFTC rules.  read more

Posted in CFTC, Commodity Trading, Regulation

The Federal Reserve’s Proposed Rollback of Physical Commodities Authority for Financial Holding Companies

On September 23, 2016, the Board of Governors of the Federal Reserve System (the “FRB”) issued a proposed regulation concerning the ability of a financial holding company (“FHC”) to engage in physical commodities activities (the “Commodities Proposal”).  The Commodities Proposal follows an advanced notice of proposed rulemaking issued by the FRB more than two years ago in early 2014.  read more

Posted in Uncategorized

CFTC Staff Issues Final Swap Dealer De Minimis Exception Report

By Athena Eastwood, Anthony Mansfield, Paul Pantano and Neal Kumar

On August 15, 2016, Staff of the U.S. Commodity Futures Trading Commission (“CFTC”) published a final report regarding the de minimis exception from swap dealer registration (“Staff De Minimis Report”).  The Staff De Minimis Report highlights continued insufficient data to identify swap dealing activity.  As a result, the Staff De Minimis Report does not include any Staff recommendations about whether the Commission should raise, lower, or retain the interim $8 billion de minimis threshold.  read more

Posted in Commodity Trading, Mining/Metals, Oil & Gas, Power, Regulation

CFTC Issues $560,000 Penalty for Inaccurate Large Trader Reporting of Swaps

By Anthony Mansfield, Jonathan Flynn, Neal Kumar and Michael Selig

On July 6, 2016, the Commodity Futures Trading Commission (“CFTC” or the “Commission”) fined Barclays Bank PLC (“Barclays”) $560,000 for inaccurate large trader reporting of swaps positions.  This is the third and largest civil monetary penalty to date for violations of the CFTC’s Part 20 swaps large trader reporting rules and demonstrates the continuation of a trend toward more aggressive enforcement of swap reporting violations.  read more

Posted in CFTC, Commodity Trading, Enforcement and Investigations, Regulation

FERC Issues Order Assessing Civil Penalties Against ETRACOM

On Friday, June 17, 2016, the Federal Energy Regulatory Commission (the “Commission”) issued an Order Assessing Civil Penalties against ETRACOM LLC (“ETRACOM”) and ETRACOM’s founding member and majority owner, Michael Rosenberg (together, “Respondents”). The Commission held that the Respondents violated section 222 of the Federal Power Act and section 1c.2 of the Commission’s regulations (the “Anti-Manipulation Rule”). Specifically, the Commission found that between May 14, 2011 and May 31, 2011 (the “Manipulation Period”), ETRACOM and Rosenberg engaged in a “cross-commodity” scheme in which they submitted virtual supply offers at the New Melones intertie at the border of the California Independent System Operator (“CAISO”) wholesale electric market with the intent to lower power prices artificially at New Melones in order to increase the value of ETRACOM’s Congestion Revenue Rights (“CRRs”) positions that settled based upon power prices at that location. Respondents offered two primary defenses to Staff’s allegations, each of which the Commission rejected: (1) that CAISO was not a well-functioning market and (2) that ETRACOM based its trading activity on market fundamentals.  read more

Posted in Enforcement and Investigations, FERC, Oil & Gas, Power, Regulation

D.C. Circuit Upholds FERC’s NEPA Analysis in Sabine Pass and Freeport LNG Projects

On June 28, 2016, the U.S. Court of Appeals for the District of Columbia Circuit rejected two related challenges to the Federal Energy Regulatory Commission’s environmental review of the Sabine Pass LNG and Freeport LNG applications to site, construct, and operate liquefied natural gas (“LNG”) export facilities under Section 3 of the Natural Gas Act.  read more

Posted in Cases, Enforcement and Investigations, LNG, Oil & Gas, Power, Regulation