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FIA Responds to FinCEN Ownership Identification Rule (Oct. 2, 2014)

The Financial Crimes Enforcement Network, the anti-money laundering arm of the U.S. Treasury Department, issued a proposal on July 30 that would require financial institutions to look through the companies for which they provide services and identify their owners. One of the provisions would require futures commission merchants and introducing brokers to identify and verify any individual who owns 25% or more of a legal entity that is a customer.

On Oct. 2, FIA filed a comment letter responding to the proposed rule. The comment letter questions the need to make customer due diligence a “fifth pillar” of anti-money laundering program requirements; requests additional exemptions to the customer definition; suggests additions to the text of the rule; proposes enhancements to customer due diligence procedures; asks for clarification on the treatment of intermediated accounts; and recommends expanding the implementation time frame to 24 months.

FIA Affiliates Respond to MiFID II Consultation (Aug. 1, 2014)

FIA, FIA Europe and FIA European Principal Traders Association have submitted two sets of responses to the European Securities and Markets Authority’s consultation on MiFID II, the overhaul of the EU’s rules for markets in financial instruments. FIA, FIA Europe and FIA EPTA filed a joint response focused on microstructural issues such as direct market access and algorithmic and high-frequency trading. FIA Europe filed a separate response focusing on issues such as indirect clearing, non-discriminatory access, position limits for commodities, and trading reporting.

 FIA Associations Response to MiFID II Consultation Paper 
(response begins on p. 34)

 FIA Associations Response to MiFID II Discussion Paper
(response begins on p. 31)

 FIA Europe Response to MiFID II Consultation Paper
(response begins on p. 42)

 FIA Europe Response to MiFID II Discussion Paper
(response begins on p. 20)

FIA and FIA PTG Comment on CFTC Market Surveillance Program (Aug. 4, 2014)
Responding to a request from the Technology Advisory Committee of the Commodity Futures Trading Commission, FIA and FIA Principal Traders Group submitted a joint letter on Aug. 4 suggesting that the CFTC should consider five principles as it examines ways to reform its market surveillance and oversight in a “technologically adept way.” The five principles are: 
  • Continue to delegate “front-line surveillance” to exchanges; 
  • Increase the analytical expertise of the CFTC staff; 
  • Use existing reports to enhance cross-market surveillance; 
  • Avoid the duplication of existing systems built or commissioned by exchanges 
  • Maintain data privacy and cybersecurity

FIA Seeks Clarification on Ukraine Sanctions (Aug. 1, 2014)

On Aug. 1, FIA submitted a letter to the Office of Foreign Assets Control, a division of the U.S. Treasury Department, to provide information concerning the FCM role in managing its customer positions in the futures markets and the potential market impact if an FCM customer with open positions becomes the subject of asset-blocking sanctions. In addition, FIA asked OFAC to consider adding a general license to the regulations implementing the Ukraine sanctions that would allow an FCM to liquidate the open positions of a customer that is a target of the sanctions or allow a clearinghouse to liquidate the open positions of a customer if the FCM is in default.

FIA Files Supplemental Comment on Position Limits (July 31, 2014)

FIA submitted a comment letter to the Commodity Futures Trading Commission on July 31 in response to a request for additional comment on the agency’s proposed position limits rule and its proposed position aggregation rule. FIA focused its comments on the aggregation proposal and suggested nine changes that would address concerns raised by FIA members and other market participants. The letter also included proposed rule text provisions that reflect the suggested changes.

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