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On October 14, the CFTC announced a $500,000 settlement with a non-U.S. provisionally registered swap dealer to resolve claims that it failed to comply with certain swap dealer recordkeeping requirements. Among other things, the institution allegedly failed to retain certain audio recordings for the time required under CFTC regulations. In addition to the civil monetary penalty, the institution must cease and desist from further violations of the CFTC regulations and must continue its remediation efforts.
On September 29, the CFTC announced a $1.5 million settlement with a non-U.S. provisionally registered swap dealer headquartered in France to resolve claims that it failed to comply with certain swap dealer reporting requirements. Among other things, the swap dealer allegedly failed to meet mid-market mark disclosure requirements for numerous swaps, failed to accurately report certain swap valuation data to a swaps data repository, and did not diligently perform its supervisory obligations related to these disclosures. In addition to the civil monetary penalty, the swap dealer must cease and desist from further violations of the Commodity Exchange Act and CFTC regulations and must continue its remediation efforts.
Earlier, on September 27, the CFTC announced a $1 million civil monetary penalty to resolve allegations that a global financial institution violated swap data legal entity identifier (LEI) reporting requirements as well as related supervision responsibilities. According to the CFTC, the alleged failures violated the cease and desist provision of a 2017 CFTC order, in which the CFTC found that the financial institution, among other things, failed to report LEI swap transaction data or establish systems and procedures to do so, did not correct errors in previously reported LEI data, and failed to diligently perform its supervisory duties when reporting LEI swap data. The 2017 order imposed a $550,000 civil monetary penalty and required the financial institution to cease and desist violating CFTC regulations. The CFTC’s September 27 order further found that the financial institution’s alleged continued reporting failures occurred, in part, from a failure to diligently supervise its swap dealer activities with respect to LEI swap data reporting.
On August 16, the SEC and the European Central Bank (ECB) entered into a Memorandum of Understanding (MOU) intended to facilitate the consultation, cooperation, and exchange of information connected with the supervision, enforcement, oversight, and inspection of certain security-based swap dealers and major security-based swap entities in EU member states registered with the SEC and supervised by the ECB. These include SEC-registered security-based swap entities participating in the Single Supervisory Mechanism (SSM), the EU’s system of banking supervision, which “is composed of the ECB and the relevant national competent authorities of participating EU Member States.” Among other things, the MOU will “support the SEC’s oversight of the operation of substituted compliance orders that the Commission has issued for security-based swap entities in France and Germany, as well as any future substituted compliance orders for such firms in other EU Member States that participate in the SSM,” to enable an entity to comply with certain Dodd-Frank Act requirements by complying with comparable EU and EU Member State laws. The MOU, which is intended to “foster cooperation” and exchange information between the authorities, states that at the date of execution, “no bank secrecy, blocking laws, or other regulations or legal barriers, should prevent an Authority from providing assistance to the other Authority pursuant to this MOU, or otherwise adversely affect or hinder the operation of this MOU.”
State Law Update: Oregon Updates Check Cashing Regulations, Adopts Rules Allowing Bank Interest Rate Swaps
Recently, the Oregon Department of Consumer and Business Services published final rules to update certain rules applicable to check cashing businesses. The adopted regulations simplify reporting requirements and reduce the data that licensees must include in annual reports. In the same publication, the Department adopted temporary rules granting Oregon commercial banks authority to engage in interest rate swap transactions as intermediary with and on behalf of the bank's customers, provided the bank receives prior written approval from the Director of the Department of Consumer and Business Services and other specified conditions are satisfied.