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ISDA, SIFMA, the American Bankers Association, the Bank Policy Institute and the FIA (collectively, the "Associations") commented on a proposal of U.S. banking regulators (see here for coverage) to implement the "standardized approach for counterparty credit risk" ("SA-CCR") by U.S. capital rules. The Associations raised concerns over the potential impact of the proposed rule on the derivatives market, specifically equity and commodity derivatives. The Associations expressed general support for the move from the "current exposure method" to a more risk-based measure, but found that elements of

The NFA modified proposed amendments to Compliance Rules and Interpretive Notices to cover transactions and counterparties relating to swaps, as well as other commodity interests ( e.g. , futures). ( See here for previous coverage.) Specifically, the NFA withdrew its proposal to amend NFA Compliance Rule 3-1 ("Department of Compliance") that would have deleted that rule's limited purpose definition of commodity interest.

The CFTC's Division of Market Oversight, Division of Swap Dealer & Intermediary Oversight, and Division of Clearing & Risk published examination priorities. The Division of Market Oversight ("DMO") will focus on "emerging areas of self-regulation, where regulatory requirements and best practices may still be developing." The DMO stated it will conduct examinations in the following areas: cryptocurrency surveillance practices; surveillance for disruptive trading; trade surveillance practices; block trade surveillance practices; market surveillance practices; real-time market monitoring

The Comptroller of the Currency, Federal Reserve Board and FDIC proposal allowing "advanced-approaches" banking organizations ( i.e. , those with $250 billion or more in total consolidated assets, or $10 billion or more in on-balance sheet foreign exposure) to use an alternative approach for calculating derivative exposures under regulatory capital rules was published in the Federal Register. Comments must be received before February 15, 2019. As previously covered , the proposed approach - the standardized approach for counterparty credit risk ("SA-CCR") - would replace the current exposure

Commentary by Steven Lofchie

The National Futures Association ("NFA") proposed amendments to NFA Compliance Rules and Interpretive Notices to cover transactions and counterparties involving swaps. The NFA stated that the amendments to the NFA Rules are designed to (i) incorporate references to swaps and counterparties, as well as other related concepts, (ii) clarify that certain rules apply to all commodity interests, defined as means futures, forex and/or swaps, and (iii) clarify that other rules only apply to certain membership categories. Specifically, the NFA proposed amending: NFA Compliance Rule 1-1 ("Definitions")