NFA reminded members of the April 1, 2019 effective date for an Interpretive Notice relating to CPO internal control systems. The Interpretive Notice mandates that CPOs implement an internal control framework designed to protect customer funds and ensure the accuracy of books and records. As previously covered, the Interpretive Notice requires that CPOs have written internal control policies that: comply with applicable NFA and CFTC requirements; explain the firms' internal controls; subject all personnel, including senior management, to internal control procedures; include escalation

The CFTC adopted an amended substituted compliance determination relating to Japanese swaps margin requirements. The new determination updates a previous determination by finding comparability as to (1) the scope of entities subject to margin requirements and (2) the treatment of inter-affiliate transactions. As to scope of entities, the CFTC states that it applies to requirements for both initial and variation margin requirements. As to inter-affiliate requirements, the CFTC noted that Japanese requirements do not require variation margin between affiliates, as the CFTC rules do, but cited

The U.S. Senate Committee on Banking, Housing and Urban Affairs (the "Committee") heard testimony from various witnesses on Chair Mike Crapo's (R-IA) proposed framework for housing reform legislation. Released in February, the framework for reform would: protect taxpayers by reducing the too-big-to-fail risk posed by the current "duopoly of mortgage guarantors"; keep existing infrastructure in the housing finance system that works well, while increasing the role of private risk-bearing capital; create new layers of protection between mortgage credit risk and taxpayers; ensure a level playing

The U.S. Supreme Court found that an investment banker may be held legally responsible for disseminating statements that he knew to be false, even though he was not the "maker" of the false statements. The SEC charged an investment banker and his superior for violating Section 10(b) of the Exchange Act, Rule 10b-5 thereunder, and Securities Act Section 17, in the case of the superior, by making, and in the case of the charged investment banker, by disseminating, inaccurate statements to investors with "the intent to defraud." In 2017, the U.S. Court of Appeals for the District of Columbia

The CFTC determined that Australia's margin requirements for uncleared swaps are comparable in outcome to the CFTC's rules. The CFTC determination is generally for circumstances where substituted compliance applies under CFTC rules, and does not contain material conditions that would require partial compliance with U.S. rules. The relief does not extend to products that are "swaps" for U.S. purposes but out-of-scope for Australian purposes and, in such cases, an entity could not elect to comply with Australian requirements over CFTC requirements.