CFTC Updates, Insider Trading Amendments


CFIUS Extends Time to Become “Excepted Foreign State” and “Excepted Real Estate Foreign State”

The Committee on Foreign Investment in the United States (“CFIUS”) extended by one year the effective date for one of the criteria under the definitions of “Excepted Foreign State” and “Excepted Real Estate Foreign State.” This final rule extends the effectiveness from February 13, 2022, until February 13, 2023, providing countries with additional time to qualify as excepted foreign states.

Under the rule, both terms are defined using a two-part conjunctive test. The time extension applies to the second criterion of this test, which is composed of the following determinations for both definitions:

  1. Under 31 C.F.R. § 800.1001(a), which pertains to excepted foreign states, a foreign state has “established and is effectively utilizing a robust process to analyze foreign investments for national security risks and to facilitate coordination with the United States on matters relating to investment security.”

  2. Under 31 C.F.R. § 802.1001(a), which pertains to excepted real estate foreign states, a foreign state has completed “‘significant progress’ toward establishing and effectively utilizing the robust process that is described in § 800.1001.”

Additionally, CFIUS issued a notice of action determining that both Australia and Canada have satisfied the second criterion of the test for excepted foreign states. In a separate notice, CFIUS also determined that Australia and Canada have satisfied the second criterion for excepted real estate foreign states. As a result, both countries will remain excepted foreign states and excepted real estate foreign states.

 CFTC Staff Grants Financial Reporting No-Action Relief to SDs in Singapore and Australia

CFTC Market Participants Division (“Division”) staff provided financial reporting relief to nonbank swap dealers (“SDs”) in Australia and Singapore.

The Division stated that it will not recommend enforcement action pursuant to CFTC Regulation 23.105(e) (“Financial recordkeeping, reporting and notification requirements for swap dealers and major swap participants”) against specified nonbank SDs, that prepare their annual audited financial reports in accordance with their home country standards in lieu of generally accepted accounting principles as adopted in the United States (“U.S. GAAP”)

CFTC Letter 22-01, addressed to Goldman Sachs Financial Markets Pty Ltd, based in Australia, permits filing with the CFTC and NFA annual audited reports that contain all of the financial statements and footnote disclosures required by CFTC Regulation 23.105(e), prepared in accordance with Australian Accounting Standards Board (“AASB”) in lieu of U.S. GAAP. Similar relief was provided in CFTC Letter 22-02 to Morgan Stanley Capital Group (Singapore) Pte. and J. Aaron & Company (Singapore) Pte.

The relief is subject to conditions, including that:

  1. Each SD prepares and files with the CFTC and NFA specified reconciliation of certain statements; and

  2. Each SD notifies the CFTC if there are any substantial differences between the AASB and Singapore Financial Reporting Standards (or “SFRS”),…



Read More: CFTC Updates, Insider Trading Amendments

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