University of Houston finance professor Craig Pirrong has written a commentary analyzing the new CFTC Rule 39.33, which mandates that collateral be subject to a "prearranged and highly reliable funding arrangement." The rule, which requires systematically important derivatives clearing organizations in the form of Treasuries in the form of Treasuries ("SIDCOs") to maintain sufficient liquidity resources, does not treat U.S. Treasury securities as a qualifying liquid resource. Instead, such organizations can count Treasuries towards their liquid resources only if they are backed by highly

The SEC has announced charges against two Houston-based investment advisory firms for engineering thousands of principal transactions through their affiliated brokerage firm without informing their clients. Parallax and its chief compliance officer are also charged with violations of the "custody rule," which requires firms to undergo certain procedures to safeguard and account for client assets. According to the SEC's orders, the CCO was aware that the custody rule required Parallax to either undergo an annual surprise exam to verify the existence of the fund's assets, or obtain fund audits

Nine Senate Democrats sent a letter to the White House urging the President to consider a nominee for CFTC Commissioner "who has the expertise, independence, and track record necessary to carry forward strong implementation of the derivatives reforms" of Dodd-Frank. President Obama will have to nominate a new Commissioner to replace Bart Chilton, who announced that he will be stepping down on the same day that Timothy Massad was named to succeed current Chairman Gary Gensler. According to the letter, the Senators are "deeply concerned" that some in the industry will view Gensler and Chilton's

FINRA has issued an Information Notice reminding customers that national options exchanges are closing at 1:00 p.m., Eastern Time ("ET"), on Friday, November 29, 2013 (the Friday after Thanksgiving), which will modify the exercise cut-off time for expiring weekly options. Additionally FINRA stated that option holders must make a final decision to exercise or not exercise options expiring on November 29, 2013, by 2:30 p.m., ET. See: FINRA Information Notice; FINRA Press Release.

The CFTC Divisions of Swap Dealer and Intermediary Oversight, Clearing and Risk, and Market Oversight issued a no-action letter that provides time-limited relief to swap dealers ("SDs") registered with the CFTC that are established under non-U.S. jurisdictions ("Non-U.S. SDs") from certain "transaction-level" requirements under the CEA ("TLRs"). On November 14, 2013, the CFTC issued an Advisory (Letter 13-69) in response to inquires from swap market participants regarding the applicability of TLRs in certain situations, including, most notably, when TLRs apply to a non-U.S. SD trading out of a