April 11, 2021

Volume XI, Number 101

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April 09, 2021

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April 08, 2021

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CFTC Approves Final Rules Regarding Electronic Trading Risk Principles and Bankruptcy Regulations & Organizational Changes

CFTC Approves Final Rules Regarding Electronic Trading Risk Principles and Bankruptcy Regulations

On December 8, the Commodity Futures Trading Commission (CFTC) approved a final rule amending CFTC Regulation Part 38 to address the risk of a designated contract market’s (DCM) trading platform experiencing a market disruption due to electronic trading. The final rule sets forth three principles applicable to DCMs concerning:

  • the implementation of exchange rules applicable to market participants to prevent, detect and mitigate market disruptions and system anomalies;
  • the implementation of exchange-based, pre-trade risk controls for electronic orders; and
  • the prompt notification of CFTC staff by DCMs of any significant market disruptions on their electronic trading platform.

The final rule provides that a DCM can comply with these principles by adopting certain acceptable practices, including by implementing rules and risk controls reasonably designed to prevent, detect and mitigate market disruptions and system anomalies associated with electronic trading.

Additionally, the CFTC also unanimously approved comprehensive amendments to CFTC Regulation Part 190, which governs bankruptcy proceedings of commodity brokers. For a more fulsome description of the amendments, please see Katten’s April 29, 2020 Advisory on the proposed rules.

The press release and access to the final rules are available here.


CFTC Unanimously Approves Technical Amendments to Reflect Organizational Changes

On December 8, the Commodity Futures Trading Commission (CFTC) approved a final rule making technical amendments to CFTC regulations to align with recent organizational changes, remove unnecessary language, and correct inaccurate text and other typographical errors. The amendments are immediately effective upon publication in the Federal Register, unless otherwise noted. 

The press release is available here.

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©2021 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 346
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About this Author

Kevin M. Foley, Finance Lawyer, Katten Llaw Firm
Partner

Kevin M. Foley has extensive experience in commodities law and advises a wide range of clients, both in the United States and abroad, on compliance with the Commodity Exchange Act and the rules of the Commodity Futures Trading Commission (CFTC) affecting traditional exchange-traded products, as well as the over-the-counter markets involving swaps and other derivative instruments. His clients include futures commission merchants, derivatives clearing organizations, designated contract markets, foreign boards of trade and an industry trade association.

...

312-902-5372
Jack West Financial Attorney Katten
Associate

Jack West is an associate in the Financial Markets and Funds practice.

312-902-5463
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