The CFTC Division of Clearing and Risk issued no-action relief providing eligible treasury affiliates that enter into swaps which are subject to the clearing requirement in Section 2(h)(1) of the Commodity Exchange Act and Part 50 of the CFTC rules with relief from the clearing requirement, subject to certain conditions and requirements. Most significantly, the treasury affiliate must be intermediating the swap for another affiliate that would have been eligible to use the exemption from the clearing exemption had it not interposed an affiliate in dealing with the "street." Lofchie Comment

The Financial Industry Regulatory Authority, Inc. ("FINRA") is filing with the SEC a proposed rule change to amend the Discovery Guide ("Guide") used in customer arbitration proceedings to provide general guidance on electronic discovery ("e-discovery") issues and product cases, and to clarify the existing provision relating to affirmations made when a party does not produce documents specified in the Guide. The proposed rule change fulfills FINRA's commitment to review the topics of e-discovery and product cases with the Discovery Task Force ("Task Force") that FINRA established in 2011

The Financial Industry Regulatory Authority, Inc. ("FINRA") is filing with the SEC a proposed rule change to amend FINRA Rule 12403 of the Code of Arbitration Procedure for Customer Disputes ("Customer Code") to simplify arbitration panel selection in cases with three arbitrators. Under the proposed rule change, FINRA would no longer require a customer to elect a panel selection method, and parties in all customer cases with three arbitrators would get the same selection method. FINRA would provide all parties with lists of ten chair-qualified public arbitrators, ten public arbitrators, and

The Financial Regulatory Authority ("FINRA") fined two firms $2.15 million and ordered them to pay in restitution to customers for losses incurred from unsuitable sales of floating-rate bank loan funds. FINRA found that the firms' sales representatives recommended concentrated purchases of floating-rate bank loan funds to customers whose risk tolerance, investment objectives, and financial conditions were inconsistent with the risks and features of these funds. For example, in instances where customers were seeking to preserve principal, or had conservative risk tolerances, sales persons

The European Commission provided an "invitation" to the CFTC as to the extension of the CFTC's "Exemptive Order" (on the cross-border application of swap regulation) in Dodd-Frank. The invitation goes on to urge the CFTC to extend this "Exemptive Order" until international principles on cross-border swap rules have been agreed upon and implemented. Lofchie Comment: The use of the word "invitation" in the heading of the letter is really an intriguing word choice. One can imagine that the European regulators found the word "demand" too harsh and the word "request" too soft. "Suggestion" would