New Large Trader CFTC and SEC Reporting Requirements |
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The passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) introduced a new series of regulatory reporting requirements mandated on financial service firms and other trading entities. As such, the Commodity Futures Trading Commission’s (“CFTC”) and the Securities and Exchange Commission’s (“SEC”) have recently passed new regulations affecting large traders in the form of a Large Trader Report (“LTR”)1. These reporting requirements are designed to assist with monitoring trading activity above regulator established thresholds as well as identifying securities or derivative position concentrations and improving market transparency. More specifically, the large trader reporting requirements will also assist with:
- Acquiring trading data in National Market System (“NMS”) securities from market participants identified as “large traders”;
- Monitoring compliance with speculative limits set by the CFTC and individual exchanges; and
- Assessing individual traders and their potential market power, as well as assessing risk in various commodities products including swap interests, a newly added product to the CFTC’s existing LTR requirements.
Highlighted within this paper are key aspects to the LTR and its potential impact to the financial institutions.
1The regulations are defined as CFTC’s regulations, 17 CFR Parts 15, 16, 17, 18, 19, and 21, under the Commodity Exchange Act (CEA) and SEC Rule 13h-1 under Section 13(h) of the Securities Exchange Act of 1934.
New large trader CFTC and SEC reporting requirements
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