New large trader CFTC and SEC reporting
Ladda ner bilagor
World Economic Forum
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 traders2”;
- 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.
Regulators expect strict adherence to reporting rules which may levy sanctions against financial service firms3 (the “firms”), that do not comply. Highlighted below are key aspects to the LTR and the potential impact to the firms.