The MFA has submitted a comment letter to the CFTC on its proposed rulemaking on "Enhancing Protections Afforded Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations" (see: 77 FR 67865). The MFA letter begins by stating that the perspective of its member firms is as customers of FCMs who are at risk of losing money as a result of the default of an FCM. The letter expresses MFA's concern with the recent MF Global and Peregrine defaults and applauds the CFTC for recognizing the potential weaknesses in the current customer protection regime, as

The NFA has submitted a comment letter to the CFTC regarding the CFTC's proposal to enhance customer protections afforded customers and customer funds held by futures commission merchants ("FCMs") and derivatives clearing organizations ("DCOs"). The focus of the NFA's letter is on the requirements that the CFTC would impose on the NFA and the other DSROs in respect of their programs to audit FCMs. Lofchie Comment: Although somewhat gently phrased, the comment letter is in many respects quite critical of the CFTC's proposal. For example, the comment describes an amendment to Rule 30.7 as

FINRA announced that it has fined five affiliates $1.2 million for failing to retain or review emails for periods ranging from two months to more than six years. FINRA found that the firms failed to properly configure employee email accounts to ensure that the emails sent to and from those accounts were retained and reviewed. In addition, the firms failed to set up systems to retain certain types of emails, such as emails using alternative email addresses and "cloud" email (emails sent through third-party systems). Click here to view news release in full (links externally to FINRA website).

The Basel Committee on Banking Supervision and IOSCO have published a second consultative paper on margin requirements for non-centrally cleared derivatives. Among the questions raised by the paper are those relating to: 1. The treatment of physically-settled foreign exchange ("FX") forwards and swaps under the framework,2. The ability to engage in limited re-hypothecation of collected initial margin,3. The proposed phase-in framework, and4. The adequacy of the conducted quantitative impact study ("QIS"). Comments Due: March 15, 2013. Comments may be submitted by email. Click here to view the

The CFTC issued an Order filing and simultaneously settling charges against Enskilda Futures Limited ("EFL"), a London-based FCM, for failing to meet the minimum capital requirements as set forth in Commodity Exchange Act Section 4f(b) and CFTCRule 1.17. According to the Order, the failure to meet the minimum capital requirements was a result of "EFL's failure to call for sufficient margin collateral on an intra-month basis from its ultimate parent, Skandinaviska Enskilda Banken, AB ("SEB"), which holds an omnibus account at EFL." The CFTC Order requires EFL to pay a $125,000 civil monetary