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News

Public Statements & Remarks

Statement of Commissioner Dan M. Berkovitz on Proposed Rule Further Extending Swap Margin Deadline for Entities with Smaller Swap Portfolios

https://www.cftc.gov/PressRoom/SpeechesTestimony/berkovitzstatement062520d?utm_source=govdelivery

June 25, 2020

I concur with issuing for public comment the proposal to extend the swap initial margin compliance date to September 1, 2022 for certain financial entities that have smaller swap portfolios (“Proposal”).

This is the second extension for these entities.  The original compliance date was September 1, 2020.  The reasons for this proposed extension are essentially the same as the first extension.  The first extension was meant to avoid congestion in negotiating and implementing thousands of initial margin arrangements for the approximately 700 entities that would otherwise have needed to enter into initial margin arrangements by September 1, 2020.  The extension split the compliance timeline for the smaller swap portfolio entities from the timeline for the entities with larger portfolios.  The larger portfolio entities were still expected to comply by September 1, 2020, but the compliance date for the smaller entities was extended to September 1, 2021.  However, more recently, in light of the disruptions caused by the Covid-19 pandemic, the compliance date for the larger swap portfolio entities was extended to September 1, 2021, thus again establishing the same compliance date for both the larger and smaller swap portfolio groups.

Although the Proposal is based on essentially the same rationale as the first extension for the smaller entities, I am not presupposing that the full extension is necessary.  The smaller swap portfolio entities and their swap dealers will have had nearly six years to prepare for the deadline as of September 1, 2021.  These entities, as well as the larger portfolio entities for which September 1, 2021 is the deadline, will have had plenty of time to spread the negotiation and implementation process out over those many years.  It is my understanding that many of the larger swap portfolio entities were already well on the way to completing the necessary documentation when the Covid-19 pandemic struck.  The Proposal includes several questions as to whether the further extension in the Proposal could increase costs by possibly stopping and restarting negotiations again.  In determining whether an extension will be finalized in regulation, the Commission will benefit from input from the public through the notice and comment process provided for in the Administrative Procedure Act.

For these reasons, I concur in the issuance of the Proposal and look forward to comments from the public.

-CFTC-

 

Public Statements & Remarks

Statement of Commissioner Rostin Behnam Regarding Notice of Proposed Rulemaking on Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants

https://www.cftc.gov/PressRoom/SpeechesTestimony/behnamstatement062520d?utm_source=govdelivery

June 25, 2020

Today’s notice of proposed rulemaking (“NPRM”) is necessitated as a result of global policy and domestic regulatory considerations to address the impact of the COVID-19 pandemic on potential market disruption that could result from a large number of entities simultaneously coming into compliance with the initial margin (or “IM”) requirements of the CFTC Margin Rule.[1]  In our attempts to remain consistent with revisions to the BCBS/IOSCO international framework’s implementation schedule, we have now created an additional compliance phase, moving from five to six, and postponing full compliance by one year to September 1, 2021.[2]  This seems reasonable, save for the fact that our last action to provide relief for those who would have to come into compliance in September of this year has resulted in a reuniting of phases five and six, reintroducing the same set of concerns regarding potential market disruptions we sought to avoid.  Accordingly, we are here today with a new NPRM to further postpone the compliance date for the final phase, phase six, to September 1, 2022.

I will support the NPRM today because it is, at this time, being presented as the swiftest means to establish a realistic compliance deadline for which we will hold covered entities accountable.  The circumstances of the COVID-19 pandemic are significant cause for concern, and I believe the Commission has responded with workable, targeted solutions aimed at ensuring our policies remain intact when the rigor of our regulations prove too burdensome to balance with competing overarching financial stability concerns.

However, as I have maintained throughout this process, delaying IM requirements as a means to provide temporary, targeted relief to address increased market volatility seems counterintuitive.[3]  Moreover, as we continue to prolong compliance, we inevitably invite further requests for deferral of an indefinite nature.  As the ten year anniversary of the Dodd-Frank Act[4] approaches, we cannot presume that the risks this core-reform seeks to address have morphed into anything of lesser concern, and I will not support any further relief absent truly compelling facts and lockstep agreement with the prudential regulators responsible for establishing margin requirements for swap dealers and major swap participants within their respective jurisdictions.

[1] See Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants, 85 FR 19878 (Apr. 9, 2020).

[2] 85 FR 19878; Interim Final Rule: Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants, __ FR _____ (_____, 2020), voting draft available at https://www.cftc.gov/PressRoom/PressReleases/8168-20.

[3] Rostin Behnam, Commissioner, Statement of Commissioner Rostin Behnam Regarding Interim Final Rule with Request for Comment on Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants (May 28, 2020), https://www.cftc.gov/PressRoom/SpeechesTestimony/behnamstatement052820.

[4] Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010).

-CFTC-

RELATED LINKS

Event: CFTC to Hold an Open Commission Meeting on June 25

 

Public Statements & Remarks

Statement of Commissioner Dan M. Berkovitz on Final Rule to Make Permanent Certain Anti-Evasion Measures for Inter-Affiliate Swaps

https://www.cftc.gov/PressRoom/SpeechesTestimony/berkovitzstatement062520c?utm_source=govdelivery

June 25, 2020

I support today’s final rule making permanent the alternative compliance frameworks for certain swaps involving the foreign affiliates of U.S. firms and their non-U.S. counterparties.  The final rule upholds the Dodd-Frank Act’s clearing mandate, deters evasion, and protects against systemic risk from swaps executed overseas by foreign affiliates.  The final rule, which adopts the rule as proposed, [1] codifies existing practice and addresses anti-evasion provisions governing inter-affiliate swaps that the Commission first issued in 2013 and later extended through staff no-action letters.

Commission regulations provide a limited, conditional “Inter-Affiliate Exemption” from clearing for swaps between certain affiliate counterparties, including U.S. firms and their foreign affiliates.  Notably, the Inter-Affiliate Exemption includes an important “Outward-Facing Swaps Condition” to prevent U.S. firms from routing swaps through foreign affiliates to evade the Commission’s clearing requirement.[2]  The Outward-Facing Swaps Condition allows outward-facing swaps to be cleared pursuant to a comparable and comprehensive foreign clearing regime.

Where the Commission has not made a comparability determination, the alternative compliance frameworks permit the foreign affiliate to exchange full, daily variation margin for the swap with its U.S. affiliate or its non-U.S. counterparty, rather than clearing the outward-facing swap.  The alternative compliance frameworks preserve the competitiveness of the foreign affiliates of U.S. firms without importing significant risks into the U.S.  Today’s final rule makes the alternative compliance frameworks permanent, with certain modifications.[3]

I support the final rule’s emphasis on clearing, anti-evasion, and systemic risk.  The final rule also expands the jurisdictions subject to one of the alternative compliance frameworks to include additional jurisdictions that have adopted and implemented their respective domestic clearing mandates.  By extending and making permanent the alternative compliance frameworks, the final rule addresses the lack of comparability determinations for foreign clearing regimes, while ensuring the continued operation of anti-evasion and anti-systemic risk provisions in the Commission’s rules.

I thank staff of the Division of Clearing and Risk for their work on this final rule and for their effective cooperation with my office.

[1] Exemption From the Swap Clearing Requirement for Certain Affiliated Entities – Alternative Compliance Frameworks for Anti-Evasionary Measures, 84 FR 70446 (Dec. 23, 2019).

[2] The Outward-Facing Swaps Condition requires the foreign affiliates of U.S. firms to clear their outward-facing swaps if such swaps are subject to the Commission’s clearing requirement and entered into with unaffiliated counterparties in foreign jurisdictions.

[3] The original alternative compliance frameworks expired in 2014, but have been repeatedly extended through no-action letters.

-CFTC-

 

Public Statements & Remarks

Concurring Statement of Commissioner Rostin Behnam Regarding Exemption from the Swap Clearing Requirement for Certain Affiliated Entities—Alternative Compliance Frameworks for Anti-Evasionary Measures

https://www.cftc.gov/PressRoom/SpeechesTestimony/behnamstatement062520c?utm_source=govdelivery

June 25, 2020

I support today’s adoption of amendments to the exemption from the swap clearing requirement for certain affiliated entities within a corporate group.  The amendments that update the conditions for the exemption incorporate several years of observation and analysis to build upon its utility within the global regulatory landscape, while affirming the Commission’s appropriate use of its public interest authority under section 4(c) of the Commodity Exchange Act.  It can be tempting to use somewhat fluid and undeniably desirable objectives such as the promotion of responsible economic and financial innovation and fair competition to support all manner of regulatory changes.  And I have not hesitated to highlight my own concerns for the imprudent use of 4(c) exemptive authority.  However, I am pleased that when it comes to the risks associated with U.S firms entering into uncleared swaps with non-U.S. affiliates or evading the clearing requirement altogether, the Commission has consistently demonstrated that its reliance on the 4(c) authority provides the checks to ensure that the policy and outcomes remain legally sound and rational.

I support today’s final rule, as I did the proposal, because it provides legal certainty, benefits from careful analysis and consideration of the data as well as the global regulatory landscape as it has developed, and leaves in place critical tools for Commission monitoring, oversight, and enforcement.[1]  However, I am mindful that guardrails put firmly in place by today’s amendments as a substitute for clearing outward-facing swaps may produce additional risk to external creditors and/or third parties, and that there may be an increased likelihood of risk to the financial system resulting from the availability of the exemption.  While I encouraged interested parties to comment on this aspect of the exemption—the alternative compliance framework—the Commission did not receive any responsive comments.[2]  Without comments, the Commission’s findings and conclusions remain neither vigorously supported nor expressly undermined, and we will continue to discharge our regulatory responsibilities, remaining quick to respond as we closely monitor the data and global regulatory developments to ensure that the exemption does not add unnecessary and preventable risk to the U.S. financial system.

I thank staff from the Division of Clearing and Risk for their thoughtful responses to my questions, and for making edits that reflect my comments and suggestions.

[1] Exemption from the Swap Clearing Requirement for Certain Affiliated Entities, 84 FR 70446, 70460-1 (proposed Dec. 23, 2019).

[2] Id. at 70461.

-CFTC-

 

Public Statements & Remarks

Statement of Chairman Heath P. Tarbert in Support of Final Rule on Alternative Compliance for the Inter-Affiliate Swap Clearing Exemption

https://www.cftc.gov/PressRoom/SpeechesTestimony/tarbertstatement062520c?utm_source=govdelivery

June 25, 2020

I am pleased to support our final rule codifying the alternative compliance framework for the Commission’s inter-affiliate swap clearing exemption, which has been in place via the CFTC’s staff no-action relief since 2014.  As I previously stated in connection with the proposed rule, codifying this relief is good policy and good government.[1]

From a policy perspective, the rule advances the goals of our swap clearing requirements by making anti-evasionary provisions of the inter-affiliate exemption workable for cross-border corporate groups.  Stepping back for a moment and looking at the bigger picture, our clearing and initial margin requirements are meant to address counterparty credit risk.  These measures generally are not appropriate for credit exposures between members of a single corporate group, where risk is managed internally on a centralized basis.[2]

However, the CFTC has long been concerned that U.S. entities may misuse the inter-affiliate exemption to evade the clearing requirements more generally.  For example, a U.S. entity may use back-to-back swaps to interpose a non-U.S. affiliate in the middle of the U.S. entity’s trade with a non-U.S. counterparty, where the non-U.S. affiliate and counterparty are in jurisdictions that do not have mandatory clearing regimes comparable to the Commission’s.  In this way, the U.S. entity could improperly circumvent the clearing obligations that would apply if it were trading directly with the non-U.S. counterparty (because it would be exempted from clearing the trade with its non-U.S. affiliate, and the non-U.S. affiliate’s back-to-back trade with the non-U.S. counterparty could fall outside U.S. clearing requirements).

This evasion concern was particularly acute in the early years of the CFTC’s clearing regime, when a number of other jurisdictions had yet to implement their own clearing requirements in accordance with the G20 commitments at the 2009 Pittsburgh Summit.  Moreover, section 2(h)(4)(A) of the Commodity Exchange Act requires us to prescribe rules to prevent evasion of the clearing requirement.  Accordingly, as an anti-evasionary measure, the Commission required members of a corporate group taking advantage of the inter-affiliate exemption to clear their outward-facing swaps if such swaps would be clearing-mandated under CFTC rules, regardless whether the parties to the outward-facing swap were in fact subject to such rules.[3]

The “clearing outward-facing swaps” condition to the inter-affiliate exemption is unworkable for many market participants, however, because of inter-jurisdictional mismatches in clearing requirements and infrastructures.  Accordingly, the CFTC’s staff no-action relief has extended the rule’s time-limited alternative compliance framework allowing affiliates to exchange variation margin in lieu of clearing outward-facing swaps.[4]

This alternative compliance option has allowed cross-border corporate groups to attain the risk-mitigating benefits of inter-affiliate swaps,[5] while complying with important anti-evasion measures in a way that is practicable for their global business.  Indeed, the CFTC staff’s review of recent swap data indicates that over 70 eligible affiliate counterparties located outside the United States rely on the alternative compliance framework under the available staff no-action relief.  By codifying this relief, we are providing the swaps market with clarity, certainty, and transparency—consistent with the CFTC’s mission, core values, and strategic objectives.[6]  I commend my fellow Commissioners and the CFTC’s staff for working to finalize the rule before us today, and I look forward to further efforts to advance these principles and goals in the near future.

[1] Statement of Chairman Heath P. Tarbert: “Tripling Down on Transparency” n.12 (Dec. 10, 2019), https://www.cftc.gov/PressRoom/SpeechesTestimony/tarbertstatement121019.

[2] See Clearing Exemption for Swaps Between Certain Affiliated Entities, 78 FR 21750, 21753 (Apr. 11, 2013) (justifying the inter-affiliate clearing exemption in view of incentives to avoid defaulting to affiliates and the common practice of centralized risk allocation decisions and default remedies, which reduce inter-affiliate default risk).

[3] 17 CFR 50.52(b)(4).

[4] CFTC Letter No. 17-66 (Dec. 14, 2017), https://www.cftc.gov/LawRegulation/CFTCStaffLetters/index.htm; see also previously granted relief under CFTC Letter Nos. 14-135 (Nov. 7, 2014), 15-63 (Nov. 17, 2015), 16-81 (Nov. 28, 2016), and 16-84 (Dec. 15, 2016). CFTC Letter No. 17-66 expires on the earlier of (i) December 31, 2020 at 11:59 pm (Eastern Time); or (ii) the effective date of amendments to Commission regulation 50.52.

[5] See 78 Fed. Reg. at 21754 (citing to commenters and the 2012 inter-affiliate exemption notice of proposed rulemaking in support of the conclusion that “inter-affiliate transactions provide an important risk management role within corporate groups” and that “swaps entered into between corporate affiliates, if properly risk-managed, may be beneficial to the entity as a whole”).

[6] See Draft CFTC 2020-2024 Strategic Plan, 85 Fed. Reg. 29,935 (May 19, 2020), https://www.govinfo.gov/content/pkg/FR-2020-05-19/pdf/2020-10676.pdf.

-CFTC-

 

Public Statements & Remarks

Statement of Support by Commissioner Brian Quintenz Regarding the Exemption from the Swap Clearing Requirement for Certain Affiliated Entities

https://www.cftc.gov/PressRoom/SpeechesTestimony/quintenzstatement062520b?utm_source=govdelivery

June 25, 2020

I support today’s final rule providing legal certainty to swap counterparties electing the inter-affiliate exemption from the Commission’s requirement that certain interest rate swaps and credit default swaps be cleared.  At issue is an important condition of the exemption that reduces the likelihood that uncollateralized exposures can build up at a U.S. swap participant.[1]  I support the policy, made permanent by today’s rule, that permits variation margin to be exchanged by affiliated counterparties in lieu of clearing swaps with foreign counterparties.  This provision appropriately balances an anti-evasionary measure with providing flexibility to market participants.  The provision has functioned well since 2013, and it is appropriate to make the provision permanent after several extensions of the no-action relief.[2]

I would like to highlight that today’s final rule acknowledges that five additional jurisdictions have enacted swap clearing requirements since the first version of this rule was issued in 2013.[3]  Today’s rule therefore serves as another example of the Commission appropriately deferring to foreign regulatory regimes in order to reduce compliance burdens and promote market liquidity internationally.

Not only do I support today’s final rule because it makes a sound policy permanent, but also because it codifies no-action relief that has proven workable for market participants.  Codifying no-action relief makes the Commission’s regulatory framework more transparent and simplifies compliance.  I would support continuing to codify other no-action relief, for example with respect to providing relief from the trade execution requirement for a swap exempted from the clearing requirement.[4]

Finally, I would like to thank the staff of DCR for their diligence in completing this rulemaking.

[1] CFTC regulation 50.52(b)(4)(ii)-(iii) (17 CFR 50.52(b)(4)(ii)-(iii)).

[2] CFTC Letters 14-135, 15-63, 16-81, 16-84, and 17-66.

[3] The first version of the rule had permitted, until 2014, unlimited variation margining when an affiliate was located in the E.U., Japan, and Singapore.  Today’s version expands the list of eligible jurisdictions to include Australia, Canada, Hong Kong, Mexico, Switzerland, as well as the U.K.

[4] CFTC Letter 17-67, proposed to be codified by the Commission’s 2018 proposed revised rules for swap execution facilities, 83 Fed. Reg. 61,946 (Nov. 30, 2018).

-CFTC-

 

Public Statements & Remarks

Supporting Statement of Commissioner Brian Quintenz Regarding the Prohibition of Post-Trade Name Give-Up on Swap Execution Facilities

https://www.cftc.gov/PressRoom/SpeechesTestimony/quintenzstatement062520c?utm_source=govdelivery

June 25, 2020

I will vote in favor of today’s final rule to prohibit post-trade name give-up practices for swaps executed, pre-arranged, or pre-negotiated anonymously on or pursuant to the rules of a swap execution facility (SEF) and intended-to-be-cleared (Final Rule).

As I have noted previously, I have concerns about the government banning an established trading practice that has evolved from natural market forces to support swaps liquidity provision.  Client swap activity is inherently dealer and relationship-sourced.  That is why the name-disclosed Request for Quote (RFQ) model has been highly favored over the anonymous Central Limit Order Book (CLOB) model in the client market.  Although the Final Rule predicts that the ban on name give-up will result in increased participation and competition in the dealer-to-dealer market, I remain concerned that banning post-trade name give-up will negatively impact dealers’ ability to hedge efficiently on existing inter-dealer platforms, which will ultimately lead to a degradation in the pricing and liquidity provision of swaps trading on dealer-to-client platforms.  I am also doubtful that new entrants into the wholesale market will use the advantages of that participation to add any meaningful liquidity in the client market, making it even less certain that the benefits of enhanced competition hoped for in this Final Rule will be passed through to end-users.

Despite my concerns, I am supporting the Final Rule because it adopts an important exception from the prohibition, as well as an incremental approach that will give the Commission and market participants time to transition into compliance, observe the impact of the Final Rule, and make adjustments in the future, if necessary.

For example, the Final Rule includes a significant exception for package transactions that include a component transaction that is not a swap intended-to-be-cleared.  The exception would include U.S. Treasury swap spread package trades involving an intended-to-be-cleared swap and a U.S. Treasury security component.  These package transactions are rarely traded on dealer-to-client platforms, but make up a significant portion of volume on dealer-to-dealer platforms.  Recognizing this important difference between markets is a small but necessary accommodation to ensure package trades can continue to be efficiently executed in light of this mandated change to market trading protocols.

The Final Rule also adopts staggered compliance deadlines, with the most liquid swaps coming into compliance first, and less liquid swaps becoming subject to the ban in July 2021.  In the interim, the Commission plans to conduct a preliminary study of the Final Rule’s impact on SEF trading by July 2021, with a further study to be conducted by July 2023.  These studies will allow the Commission to assess if the ban on post-trade name give-up is, in fact, increasing competition and liquidity on SEFs, as the ban is intended to do. If a more fulsome analysis reveals that the ban has not yielded its expected benefits, or may not be appropriate for certain products given their liquidity profile, I expect further adjustments will be made to maintain a well-functioning swaps market.

Lastly, I would like to thank staff of the Division of Market Oversight for working with my staff to incorporate many of my comments into the Final Rule.

-CFTC-

 

Public Statements & Remarks

Joint Statement of Chairman Heath P. Tarbert, Commissioner Rostin Behnam, and Commissioner Dan M. Berkovitz in Support of Final Rule Restricting Post-Trade Name Give-Up

https://www.cftc.gov/PressRoom/SpeechesTestimony/tarbertbehnamberkovitzjointstatement062520?utm_source=govdelivery

June 25, 2020

As we have previously stated,[1] it is a fundamental principle of exchange-style trading systems that the buyer and seller of a given financial instrument have no reason to know—and do not know—one another’s identity.[2]  This levels the playing field for counterparties of all sizes and types by allowing traders to enter and exit the market without exposing their trading positions and strategies.[3]  As a result, markets with pre- and post-trade anonymity are generally not only fairer, but also feature greater liquidity, a more diverse set of market participants, and greater competition.[4]

In the swaps market, a number of swap execution facilities (“SEFs”) provide for post-trade disclosure of the name of the counterparty, a practice that is known as “name give-up.”  This protocol is a vestige of the pre-Dodd-Frank era, when few swaps were centrally cleared and market participants needed to know their counterparty’s identity to manage the associated credit risk.  Given the advent of central clearing, many have appropriately questioned the continuing need for post-trade name give-up for cleared swaps.  Others have gone further, criticizing the practice as anticompetitive, an obstacle to broad and diverse participation on SEFs, and potentially inconsistent with numerous provisions of the Commodity Exchange Act (“CEA”) and Commission regulations.

In 2019, after considering responses to a request for comment on the issue,[5] the Commission issued a proposed rule (“Proposal”) to restrict name give-up such that trades that are executed anonymously on-SEF and cleared would remain anonymous after execution.[6]  Public comments on the Proposal reflected a variety of differing viewpoints and interests.  The agency carefully considered all comments in crafting the final rule we voted to approve today.

We believe the final rule reflects a balanced approach, is workable, and will improve overall market vibrancy.  The rule prohibits name give-up for swaps that are executed anonymously and intended to be cleared.  However, it does not apply to swaps that are not intended to be executed anonymously, such as trades done via a name-disclosed request for quote.  The rule also includes a limited exception for package transactions[7] with at least one component that is an uncleared swap or a non-swap instrument.  This exception reflects current technological and operational realities that require counterparty disclosure for the non-swap or non-cleared swap component of such trades.[8] In addition, the rule includes a phased implementation schedule to allow SEFs and market participants time to adjust to the changes.

We believe the rule’s fundamental objective—protecting trading anonymity where it is possible to do so—is key to two statutory goals for the SEF regime: (1) promoting swaps trading on SEFs[9] and (2) promoting fair competition among market participants, including through impartial access to a SEF’s trading platform.[10]  Indeed, we hope the rule will help attract a diverse set of additional market participants who have been deterred from trading on these platforms by the practice of post-trade name give-up, but remain interested in bringing liquidity and competition to SEFs.

The issue of name give-up can be a bit of a lightning rod, sometimes inciting passionate disagreements between stakeholders.  We and CFTC staff stand ready to work with market participants and market operators to resolve any new issues that may arise as the rule is implemented.  We hope that all parties to this debate can constructively move forward together toward the goals of sound derivatives regulation and robust financial markets.

[1] Joint Statement of Chairman Heath Tarbert, Commissioner Rostin Behnam, and Commissioner Dan Berkovitz in Support of Proposed Rule Restricting Post-Trade Name Give-Up (Dec. 18, 2019).

[2] See, e.g., Peter A. McKay, CME and CBOT to Close Loophole, Wall St. J. (Apr. 15, 2006) (“When stocks are traded on public exchanges, investors generally don’t know who they are buying from or selling to. On futures exchanges, most investors expect the same thing when trading electronically.”).

[3] See, e.g., Peter Madigan, CFTC to Test Role of Anonymity in SEF Order Book Flop, Risk (Nov. 21, 2014) (noting arguments that anonymity creates a more egalitarian market); Managed Funds Association (“MFA”), Position Paper: Why Eliminating Post-Trade Name Disclosure Will Improve the Swaps Market 8 (Mar. 31, 2015) (arguing that “markets should remain anonymous to create a level playing field for all participants”); CFTC Market Risk Advisory Committee, Panel Discussion: Market’s Response to the Introduction of SEFs 139 (Apr. 2, 2015) (“MRAC Meeting Transcript”) (noting buy-side reticence to use SEF order books with name give-up because of potential uncontrolled information leakage). This can prevent price discrimination based on the identity of the counterparty.

[4] See, e.g., MRAC Meeting Transcript, supra note 2, at 154 (explaining that anonymous order books have facilitated liquidity and diverse participation in markets for other instruments, such as equities and futures); S. Freiderich & R. Payne, Trading Anonymity and Order Anticipation, 21 Journal of Financial Markets 1-24 (2014) (finding that post-trade anonymity improved market liquidity, particularly for small stocks and stocks with concentrated trading, which may be more analogous to swaps); Treasury Market Practices Group, White Paper on Clearing and Settlement in the Secondary Market for U.S. Treasury Securities (Jul. 11, 2019) (stating that emergence of new types of market participants in the fully anonymous U.S. Treasury securities market has “likely improved overall liquidity through enhanced order flow and competition”).

[5] CFTC Request for Comment on Post-Trade Name Give-Up on Swap Execution Facilities, 83 Fed. Reg. 61,571 (Nov. 30, 2018).

[6] Post-Trade Name Give-Up on Swap Execution Facilities, 84 Fed. Reg. 72,262 (Dec. 31, 2019).

[7] The rule defines a “package transaction” as “consist[ing] of two or more component transactions executed between two or more counterparties where: (i) execution of each component transaction is contingent upon the execution of all other component transactions; and (ii) the component transactions are priced or quoted together as one economic transaction with simultaneous or near-simultaneous execution of all components.”

[8] As noted in the preamble to the final rule, we urge SEFs and their participants to work towards an infrastructure that ultimately does support anonymous post-trade processing for packages including certain cleared non-swap components (e.g., U.S. Treasuries). The preamble to the final rule also notes the Commission’s intention to monitor market developments and evaluate the continued need for the package transaction exception in the future.

[9] CEA § 5h(e), 7 U.S.C. § 7b-3(e). In this regard, the CFTC intends to complete a preliminary study of the state of swaps markets one year after the initial phase of the rule takes effect, and to follow up with further study after the rule has been in effect for three years.

[10] CEA § 3(b), 7 U.S.C. § 5(b) (listing fair competition among market participants as a goal of the CEA); CEA § 5h(f)(2)(B)(i) (requiring a SEF to establish and enforce rules to provide participants impartial access to the market).

-CFTC-

 

Public Statements & Remarks

Statement of Commissioner Dan M. Berkovitz on Proposed Rules for Electronic Trading Risk Principles and Withdrawal of Regulation AT

https://www.cftc.gov/PressRoom/SpeechesTestimony/berkovitzstatement062520?utm_source=govdelivery

June 25, 2020

I support issuing for public comment the proposed rule on Electronic Trading Risk Principles (“Proposed Rule”).  The Proposed Rule is a limited step to address potential market disruptions arising from system errors or malfunctions in electronic trading.  Although it leaves important issues unaddressed, the Proposed Rule recognizes the need to update the Commission’s regulations to keep pace with the speed, interconnection, and automation of modern markets.  I support the Commission’s long-overdue re-engagement in this area.

While I support issuing the Proposed Rule for public comment, I do not support withdrawing the proposed rule known as Regulation Automated Trading (“Reg AT”).[1]  The notice of withdrawal reflects a belief that there is nothing of value in Reg AT.  That is simply not true.  Reg AT was a comprehensive approach for addressing automated trading in Commission regulated markets.    Certain elements of Reg AT attracted intense opposition and may have been a bridge too far.  However, I applaud that proposal’s efforts to identify the sources of risk and implement meaningful risk controls.  I believe the comments received on Reg AT are worth evaluating going forward.

The Proposed Rule would codify in part 38 of the Commission’s regulations three “Risk Principles” applicable to electronic trading on designated contract markets (“DCMs”).  Risk Principle 1, for example, would require DCMs to implement rules applicable to market participants to prevent, detect, and mitigate market disruptions and system anomalies.  Risk Principle 2 would also require DCMs to implement their own pre-trade risk controls.  While worthwhile as statements of principle, these proposed requirements are drafted in terms that may ultimately prove too high-level to achieve the goal of effectively preventing, detecting, and mitigating market disruptions and system anomalies.  This concern is discussed in greater detail below, and I look forward to public comment on the issue.

The Proposed Rule includes Acceptable Practices in Appendix B to part 38, which provide that a DCM can comply with the Risk Principles through rules and risk controls that are “reasonably designed” to prevent, detect, and mitigate market disruptions and system anomalies.  The Proposed Rule specifies that reasonableness is an objective measure, and that a DCM rule or risk control that is not “reasonably designed” would not satisfy the Acceptable Practices or the Risk Principles.  As the Proposed Rule indicates, the Commission will monitor DCMs’ compliance with the Risk Principles.  In this regard, the Commission has multiple oversight activities at its disposal, including market surveillance activities, reviews of new rule certifications and approval requests, and rule enforcement reviews.

The Proposed Rule is also clear on the fundamental division of authority under the Commodity Exchange Act (“CEA”) between DCMs and the Commission.  Amendments to the CEA made through the Commodity Futures Modernization Act (“CFMA”) in the year 2000 introduced the core principle regime and provided DCMs with flexibility in establishing how they comply with a core principle.[2]  Ten years later, however, learning from the 2008 financial crisis and the excesses of deregulation, the Dodd-Frank Act overhauled the CEA, including in its treatment of the core principle regime.[3]  Specifically, section 735 of the Dodd-Frank Act made clear that a DCM’s discretion with respect to core principle compliance was circumscribed by any rule or regulation that the Commission might adopt pursuant to a core principle.[4]  I am able to support today’s Proposed Rule for publication in the Federal Register because of improvements that clarify the respective authorities between a DCM and the Commission.  Under the CEA, the Commission is the ultimate arbiter of whether a DCM’s rules and risk controls are reasonably designed, under an objective standard.  I thank the Chairman for his efforts at building consensus in this regard.

The Proposed Rule overlaps with existing requirements in part 38 of the Commission regulations, including regulation 38.255, which requires DCMs to “establish and maintain risk control mechanisms to prevent and reduce the potential risk of price distortions and market disruptions . . . .”[5]  While the Proposed Rule and Risk Principle 2 are more explicit with respect to electronic trading, they may add little to existing requirements and practices regarding the risk controls that DCMs build into their own systems.  Indeed, the Proposed Rule provides numerous examples of specific risk controls at major DCMs that likely already meet this requirement, and of disciplinary actions taken by DCMs against market participants related to electronic trading. Although the Commission articulates a need for updating its risk control requirements, the fact that the Risk Principles as proposed are likely to have no practical effect undermines the usefulness of this exercise.

The Proposed Rule possibly may be of greater benefit in with respect to Risk Principle 1 and its requirement that DCMs implement risk control rules applicable to their market participants.  Market participants, who originate orders via systems ranging from comparatively simple automated order routers to nearly autonomous algorithmic trading systems, are crucial focal points for any adequate system of risk controls.  An effective system of risk controls must therefore include controls at multiple stages in the life cycle of an automated order submitted to an electronic trade matching engine.  Although Risk Principle 1 could benefit from greater rigor, it is nonetheless a critical recognition that market participants have an important role in any effective risk control framework.

I look forward to public comments on additional measures that the Commission should consider for effective risk controls across the ecosystem of electronic and algorithmic trading.  My support for any final rule that may arise from this proposal is conditioned upon a thorough articulation of the technology-driven risks present in today’s markets, and a concomitant regulatory response that will meaningfully address such risks.  In a market environment where the vast majority of trading is now electronic and automated, inaction is a luxury that we can ill-afford.

Although the Proposed Rule may be characterized as a “principles-based” approach, in fact the Risk Principles are not a new approach to the regulation of risks from electronic trading.  The current regulation establishing requirements on DCMs to impose risk controls—Regulation 38.255—is principles-based.  Regulation 38.255 states:  “The designated contract market must establish and maintain risk control mechanisms to prevent and reduce the potential risk of price distortions and market disruptions, including, but not limited to, market restrictions that pause or halt trading in market conditions prescribed by the designated contract market.”   One might ask, therefore, why do we need another principles-based regulation when we already have a principles-based regulation?  The preamble to the Proposed Rule notes the “overlap” between Regulation 38.255 and the proposed Risk Principles, and states “it is beneficial to provide further clarity to DCMs about their obligations to address certain situations associated with electronic trading.”   In other words, the principles-based regulations previously adopted by the Commission are not prescriptive enough to address the risks currently posed by electronic trading.  I fully agree.  Although I am voting today to put out this proposal for public comment, I am not yet convinced—and I look forward to public comment on whether—the principles-based regulations proposed today are in fact sufficiently detailed or comprehensive to effectively address those risks.

I thank the staff of the Division of Market Oversight for their work on the Proposed Rule and for their patience as the Commission worked through multiple iterations of this proposal.  I also thank the Chairman for his engagement and effort to build consensus.  I believe that the Proposed Rule is a much better regulatory outcome because of the extensive dialogue and give-and-take that led to the rule before us today.

[1] Regulation Automated Trading, 80 Fed. Reg. 78824 (Dec. 17, 2015); 81 Fed. Reg. 85334 (Nov. 25, 2016) (supplemental notice of proposed rulemaking for Regulation Automated Trading).

[2] Commodity Futures Modernization Act of 2000, Pub. L. No. 106-554, 114 Stat. 2763A-365 (2000).

[3] Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010).

[4] Commodity Exchange Act § 5(d)(1)(B), 7 U.S.C. § 7(d)(1)(B) (2010).

[5] 17 C.F.R. § 38.255 (2012).

-CFTC-

 

Public Statements & Remarks

Dissenting Statement of Commissioner Rostin Behnam Regarding Electronic Trading Risk Principles

https://www.cftc.gov/PressRoom/SpeechesTestimony/behnamstatement062520b?utm_source=govdelivery

June 25, 2020

I strongly support thoughtful and meaningful policy that addresses the use of automated systems in our markets.[1]  As Chris Clearfield of System Logic, a research and consulting firm focusing on issues of risk and complexity remarked, “In every situation, a trader or a piece of technology might fail, or a shock might trigger a liquidity event.  What’s important is that structures are in place to limit—not amplify—the impact on the overall system.”[2]  Any rule that we put forward should both minimize the potential for market disruptions and other operational problems that may arise from the automation of order origination, transmission or execution, and create structures to absorb and buffer breakdowns when they occur.  Unfortunately, today’s proposal regarding Electronic Trading Risk Principles does not meaningfully achieve this, and thus I respectfully dissent.

A little over ten years ago, on May 6, 2010, the Flash Crash shook our markets.[3]  The prices of many U.S.-based equity products, including stock index futures, experienced an extraordinarily rapid decline and recovery.  After this event, the staffs of the U.S. Securities and Exchange Commission (“SEC”) and CFTC issued a report to the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues.[4]  The report noted that “[o]ne key lesson is that under stressed market conditions, the automated execution of a large sell order can trigger extreme price movements, especially if the automated execution algorithm does not take prices into account.  Moreover, the interaction between automated execution programs and algorithmic trading strategies can quickly erode liquidity and result in disorderly markets.”[5]  In 2012, Knight Capital, a securities trading firm, suffered losses of more than $460 million due to a trading software coding error.[6]  Other volatility events related to automated trading have followed with increasing regularity.[7]

After the Flash Crash, the CFTC initially worked with the SEC to establish controls to minimize the risk of automated trading disruptions.  Knight Capital demonstrated that the Flash Crash was not a one-off event, and in 2013 the Commission published an extensive Concept Release on Risk Controls and System Safeguards for Automated Trading Environments (“Concept Release”).[8]  Following public comments on the Concept Release, the Commission published “Regulation AT,” which proposed a series of risk controls, transparency measures, and other safeguards to address risks arising from automated trading on designated contract markets or “DCMs.”[9]  Reg AT proposed pre-trade risk controls at three levels in the life-cycle of an order executed on a DCM: (i) certain trading firms; (ii) futures commission merchants (“FCMs”); and (iii) DCMs. In 2016, again based on public comments, the Commission issued a supplemental notice of proposed rulemaking for Reg AT, proposing a revised framework with controls at two levels (instead of three levels initially proposed): (1) the AT Person or the FCM; and (2) the DCM.[10]

Since 2016, the Commission has not advanced policy designed to prevent or restrain the impact of these market disruptions resulting from automated trading.  While the Commission has not acted, these events have continued to occur.  In September and October 2019, the Eurodollar futures market experienced a significant increase in messaging.[11]  According to reports, the volume of data generated by activity in Eurodollar futures increased tenfold.[12]  The DCM responded by changing its rules to increase penalties for exceeding certain messaging thresholds and cutting off connections for repeat violators.[13]  The DCM acted appropriately in such a situation and strengthened the rules for its participants; however, Commission policy could well have prevented this event by requiring pre-trade risk controls, including messaging thresholds.

Given the importance of the issue, I would like to commend the Chairman for stepping forward with a proposal today.  However, as I considered this proposal, I found myself questioning what the proposed Risk Principles do differently than the status quo.  The preamble seems to go to great lengths to make it clear that the Commission is not asking DCMs to do anything.  The preamble states that the “Commission believes that DCMs are addressing most, if not all, of the electronic trading risks currently presented to their trading platforms.”[14]  As the preamble discusses each of the three “new” Risk Principles, it goes on to describe all of the actions taken by DCMs today that meet the principles.  The fact that the Commission is not asking DCMs to do anything new is clearest in the cost benefit analysis, which states that “DCMs’ current risk management practices, particularly those implemented to comply with existing regulations 38.157, 38.251(c), 38.255, and 38.607, already may comply with the requirements of proposed rules 38.251(e) through 38.251(g).”[15]  If the appropriate structures are in place, and we have dutifully conducted our DCM rule enforcement reviews and have found neither deficiencies nor areas for improvement, then is the exercise before us today anything more than creating a box to check?  The only potentially new aspect of this proposal is that the preamble suggests different application in the future, as circumstances change.  The Commission seems to want it both ways:  we want to reassure DCMs that what they do now is enough, but at the same time the new risk principles potentially provide a blank check for the Commission to apply them differently in the future.  Or perhaps, viewed differently, when there is a technology failure—and there will be—will the Commission stand by its principles or will it fashion an enforcement action around a black swan event so that everyone walks away bruised, but not harmed?

For market participants, this may be extremely confusing.  What precisely are DCMs being asked to do, and what will they be asked to do in the future?  Frankly, I am not sure. But it could be more than they bargained for.

The first Risk Principle requires DCMs to “[a]dopt and implement rules . . . to prevent, detect, and mitigate market disruptions or system anomalies associated with electronic trading.”  None of the key terms in this principle are defined in the regulation or the preamble.  DCMs are left some clues, but they are not told precisely what a market disruption or system anomaly is.  Perhaps most importantly, they are not told what it means for something to be “reasonably designed” to prevent these things.  This lack of clarity continues through the other two new Risk Principles.  And while the Commission provides some clues by stating that current practice “may” meet the new principles, it then goes on to say that future circumstances may require future action by DCMs in order to comply with the principles.

As a recent article by our Chairman in the Harvard Business Law Review points out, the CFTC has a long tradition of principles-based regulation.[16]  The concept runs through our core principles, which form the framework for much of what we do and how we regulate.  It certainly is tempting to promulgate broad rules that provide the CFTC with flexibility to react to changes in the marketplace.  The problem is that this flexibility comes at a number of costs—it potentially denies market participants the certainty they need to make business decisions, and, if the principles are too flexible, it denies market participants the notice and opportunity to comment that is required by the Administrative Procedures Act.  These costs become too high where, as today, we promulgate rules that are too broad in their terms and too vague in application.  There is a reason why the core principles for swap execution facilities (“SEFs, DCMs, and derivatives clearing organizations (“DCOs”) in our rule set are extensive, and why the regulations include appendices explaining Commission interpretation and acceptable practices.  Without sufficient clarity, principles actually can become a vehicle for government overreach—a blank check for broad government action—and that includes enforcement action.

There is a saying in basketball that a good zone defense looks a lot like a man-to-man defense, and a good man-to-man defense looks a lot like a zone defense.  I think the same can be said of principles-based regulation and rules-based regulation.  Good principles-based regulation should look a lot like rules-based regulation—it should have enough clarity to provide market participants with certainty and the opportunity to provide comment regarding what regulation will look like.

It is worth noting that the Commission described the unanimously approved Reg AT proposal as principles-based.[17]  Multiple commenters to that proposal noted that it was too principles-based.[18]  I suspect that each of us on the Commission believes that the CFTC has a tradition of principles-based regulation, and that that tradition should continue.  However, I think there is disagreement as to precisely what that means.[19]

Finally, I want to make a few comments on the vote regarding the withdrawal of Reg AT.  On one hand, the Risk Principles proposal today expressly is not about automated or algorithmic trading.  This applies to electronic trading generally.  Yet there seems to be a perception that this is a replacement for Reg AT, and that is already reflected in media accounts of our action today.[20]  And if there is any question, the Commission is separately voting on withdrawal of Reg AT (and mentions Reg AT repeatedly in the document) at the same time it is issuing this NPRM.

A separate vote specifically to withdraw a prior Commission proposal is highly unusual—particularly in a situation where, as here, the original proposal was unanimously issued.  I believe that this action establishes a dangerous precedent for a Commission that has historically prided itself on its collegiality and efforts to work in a bipartisan fashion.  I have followed in a tradition of some of my predecessors on the Commission, at times voting for proposals that I would not have supported as final rules, for the purpose of advancing the conversation.[21]  I worry that the withdrawal of Reg AT could lead to future withdrawals of Commission proposals, and a loss of this historical collegiality.  We should be standing on the shoulders of those who came before us, not tearing down what came before us.

Market participants expressed valid concerns to the original Reg AT, as they do with many of our proposals.  But, market displeasure with just one or even a few of those original policy concepts is not a reason to throw away the rest of the proposal.  Let’s revisit, review, and refresh sound policy to better reflect modern market structure and a healthy relationship between market participant and market regulator.  I firmly believe we collectively strive for the same goal: safe, transparent, orderly, and fair markets. Unfortunately, today’s proposal does not advance the conversation, and as such I cannot support it.

The preamble to today’s NPRM expressly says “The Risk Principles proposed here are intended to accomplish a similar goal…” to the original Reg AT.[22]  The Reg AT proposal rule text took up more than 6 pages in the Federal Register, and made revisions and additions to Parts 1, 39, 40, and 170, providing a comprehensive—and principles-based—framework for addressing a very real issue that all market participants should be concerned about.  Today’s proposed principles are all of three sentences long.  This is not a miracle of brevity.  It just shows that the proposal today does not really do anything – while paradoxically writing the Commission a blank check to change its mind about what the principles mean in the future and who will stand by them when the next black swan lands.

[1] The Commission’s Office of the Chief Economist has found that over 96 percent of all on-exchange futures trading occurred on DCMs’ electronic trading platforms.  Haynes, Richard & Roberts, John S., “Automated Trading in Futures Markets – Update #2” at 8 (Mar. 26, 2019), available at https://www.cftc.gov/sites/default/files/2019-04/ATS_2yr_Update_Final_2018_ada.pdf.

[2] Chris Clearfield, Vision Zero for Our Markets, The Risk Desk, Dec. 21, 2016, at 4.

[3] See Findings Regarding the Market Events of May 6, 2010, Report of the Staffs of the CFTC and SEF to the Joint Advisory Committee on Emerging Regulatory Issues (Sept. 30, 2010), available at http://www.cftc.gov/ucm/groups/public/@otherif/documents/ifdocs/staff-findings050610.pdf.

[4] Id.

[5] Id. at 6.

[6] See SEC Press Release No. 2013-222, “SEC Charges Knight Capital With Violations of Market Access Rule” (Oct. 16, 2013), available at http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539879795.

[7] For a list of volatility events between 2014 and 2017, see the International Organization of Securities Commissions (“IOSCO”) March 2018 Consultant Report on Mechanisms Used by Trading Venues to Manage Extreme Volatility and Preserve Orderly Trading (“IOSCO Report”), at 3, available at https://www.iosco.org/library/pubdocs/pdf/IOSCOPD607.pdf.

[8] Concept Release on Risk Controls and System Safeguards for Automated Trading Environments, 78 FR 56542 (Sept. 12, 2013).

[9] Regulation Automated Trading, Proposed Rule, 80 FR 78824 (Dec. 17, 2015).

[10] Supplemental Regulation AT NPRM, 81 FR 85334 (Nov. 25, 2016).

[11] See Osipovich, Alexander, “Futures Exchange Reins in Runaway Trading Algorithms,” Wall Street Journal (Oct. 29, 2019), available at https://www.wsj.com/articles/futures-exchange-reins-in-runaway-trading-algorithms-11572377375.

[12] Id.

[13] See CME Group Globex Messaging Efficiency Program, available at https://www.cmegroup.com/globex/trade-on-cme-globex/messaging-efficiency-program.html.

[14] Proposal at I.A.

[15] Proposal at IV.C.3.

[16] Press Release Number 8183-20, CFTC, ICYMI: Harvard Business Law Review Publishes Chairman Tarbert’s Framework for Sound Regulation (June 15, 2020),  https://www.cftc.gov/PressRoom/PressReleases/8183-20.

[17] Reg AT at 78838.

[18] See Comments of Americans For Financial Reform and Better Markets, Inc., available at https://comments.cftc.gov/PublicComments/CommentList.aspx?id=1762.

[19] As I have stated before, “A principles-based approach provides greater flexibility, but more importantly focuses on thoughtful consideration, evaluation, and adoption of policies, procedures, and practices as opposed to checking the box on a predetermined, one-size-fits-all outcome.  However, the best principles-based rules in the world will not succeed absent: (1) clear guidance from regulators; (2) adequate means to measure and ensure compliance; and (3) willingness to enforce compliance and punish those who fail to ensure compliance with the rules.”  See Rostin Behnam, Commissioner, CFTC, Remarks of Commissioner Rostin Behnam before the FIA/SIFMA Asset Management Group, Asset Management Derivatives Forum 2018, Dana Point, California (Feb. 8, 2018), https://www.cftc.gov/PressRoom/SpeechesTestimony/opabehnam2.

[20]See Bain, Ben, “Flash Boys New Rules Won’t Make Them Hand Over Trading Secrets,” Bloomberg (Jun. 18, 2020), https://www.bloomberg.com/news/articles/2020-06-18/flash-boys-new-rules-won-t-make-them-hand-over-trading-secrets

[21] See Concurring Statement of Commissioner Rostin Behnam Regarding Swap Execution Facilities and Trade Execution Requirement, (Nov. 5, 2018).  https://www.cftc.gov/PressRoom/SpeechesTestimony/behnamstatement110518a.

[22] Proposal at I.B.

-CFTC-

 

Public Statements & Remarks

Statement of Support by Commissioner Brian Quintenz Regarding Proposed Rule on Electronic Trading Risk Principles

https://www.cftc.gov/PressRoom/SpeechesTestimony/quintenzstatement062520?utm_source=govdelivery

June 25, 2020

I support today’s proposal that would require designated contract markets (DCMs) to adopt rules that are reasonably designed to prevent, detect, and mitigate market disruptions or system anomalies associated with electronic trading. It would also require DCMs to subject all electronic orders to pre-trade risk controls that are reasonably designed to prevent, detect and mitigate market disruptions and to provide prompt notice to the Commission in the event the platform experiences any significant disruptions. I believe all DCMs have already adopted regulations and pre-trade risk controls designed to address the risks posed by electronic trading. As I have noted previously, many—if not all—of the risks posed by electronic trading are already being effectively addressed through the market’s incentive structure, including exchanges’ and firms’ own self-interest in implementing best practices. Therefore, today’s proposal merely codifies the existing market practice of DCMs to have reasonable controls in place to mitigate electronic trading risks.

Significantly, the proposal puts forth a principles-based approach, allowing DCM trading and risk management controls to continue to evolve with the trading technology itself. As we have witnessed over the past decade, risk controls are constantly being updated and improved to respond to market developments. It is my view that these continuous enhancements are made possible because exchanges and firms have the flexibility and incentives to evolve and hold themselves to an ever-higher set of standards, rather than being held to a set of prescriptive regulatory requirements which can quickly become obsolete. By adopting a principles-based approach, the proposal would provide exchanges and market participants with the flexibility they need to innovate and evolve with technological developments. DCMs are well-positioned to determine and implement the rules and risk controls most effective for their markets. Under the proposed rule, DCMs would be required to adopt and implement rules and risk controls that are objectively reasonable. The Commission would monitor DCMs for compliance and take action if it determines that the DCM’s rules and risk controls are objectively unreasonable.

The Technology Advisory Committee (TAC), which I am honored to sponsor, has explored the risks posed by electronic trading at length. In each of those discussions, it has become obvious that both DCMs and market participants take the risks of electronic trading seriously and have expended enormous effort and resources to address those risks.

For example, at one TAC meeting, we heard how the CME Group has implemented trading and volatility controls that complement, and in some cases exceed, eight recommendations published by the International Organization of Securities Commissions (IOSCO) regarding practices to manage volatility and preserve orderly trading. We also heard from the Futures Industry Association (FIA) about current best practices for electronic trading risk controls. FIA reported that through its surveys of exchanges, clearing firms, and trading firms, it has found widespread adoption of market integrity controls since 2010, including price banding and exchange market halts. FIA also previewed some of the next generation controls and best practices currently being developed by exchanges and firms to further refine and improve electronic trading systems. The Intercontinental Exchange (ICE) also presented on the risk controls ICE currently implements across all of its exchanges, noting how its implementation of controls was fully consistent with FIA’s best practices. These presentations emphasize how critical it is for the Commission to adopt a principles-based approach that enables best practices to evolve over time. I believe the proposal issued today adopts such an approach and provides DCMs with the flexibility to continually improve their risk controls in response to technological and market advancements. I look forward to comment on the proposal.

It is also long overdue for the Commission to withdraw the Regulation Automated Trading Proposal and Supplemental Proposal (Regulation AT NPRMs).  The Regulation AT NPRMs would have required certain types of market participants, based purely on their trading functionality, strategies or market access methods, to register with the Commission, notwithstanding that they did not act as intermediaries in the markets or hold customer funds.  Moreover, the NPRMs proposed extremely prescriptive requirements for the types of risk controls that exchanges, futures commission merchants, and trading firms would be required to implement. Lastly, by withdrawing these NPRMs, the market and public can finally consider as dead the prior Commission’s significant, and likely unconstitutional, overreach on accessing firms’ proprietary source code and protected intellectual property without a subpoena.

In my view, the Regulation AT NPRMs were poorly crafted and flawed public policy that failed to understand the true risks of the electronic trading environment and the intrinsic incentives that exchanges and market participants have to mitigate and address those risks. I am pleased the Commission is officially rejecting the policy rationales and regulatory requirements proposed in the Regulation AT NPRMs and is instead embracing the principles-based approach of today’s proposal.

-CFTC-

 

Public Statements & Remarks

Statement of Chairman Heath P. Tarbert in Support of the Proposed Rule on Electronic Trading Risk Principles

https://www.cftc.gov/PressRoom/SpeechesTestimony/tarbertstatement062520b?utm_source=govdelivery

June 25, 2020

The mission of the CFTC is to promote the integrity, resilience, and vibrancy of U.S. derivatives markets through sound regulation.  We cannot achieve this mission if we rest on our laurels—particularly in relation to the ever evolving technology that makes U.S. derivatives markets the envy of the world.  What is sound regulation today may not be sound regulation tomorrow.

I am reminded of the paradoxical observation of Giuseppe di Lampedusa in his prize-winning novel, The Leopard:

                              “If we want things to stay as they are, things will have to change.”[1]

While the novel focuses on the role of the aristocracy amid the social turbulence of 19th century Sicily, its central thesis—that achieving stability in changing times itself requires change—can be applied equally to the regulation of rapidly changing financial markets.

Today we are voting on a proposal to address the risk of disruptions to the electronic markets operated by futures exchanges.  The risks involved are significant; disruptions to electronic trading systems can prevent market participants from executing trades and managing their risk.  But how we address those risks—and the implications for the relationship between the Commission and the exchanges we regulate—is equally significant.

The Evolution of Electronic Trading

A floor trader from the 1980s and even the 1990s would scarcely recognize the typical futures exchange of the 21st Century.  The screaming and shouting of buy and sell orders reminiscent of the film Trading Places has been replaced with silence, or perhaps the monotonous humming of large data centers.  For over the past two decades, our markets have moved from open outcry trading pits to electronic platforms.  Today, 96 percent of trading occurs through electronic systems, bringing with it the price discovery and hedging functions foundational to our markets.

By and large, this shift to electronic trading has benefited market participants.  Spreads have narrowed,[2] liquidity has improved,[3] and transaction costs have dropped.[4]  And the most unexpected benefit is that electronic markets have been able to stay open and function smoothly during the Covid-19 lockdowns.  By comparison, traditional open outcry trading floors such as options pits and the floor of the New York Stock Exchange were forced to close for an extended time.  Without the innovation of electronic trading, our financial markets would almost certainly have seized up and suffered even greater distress.

But like any technological innovation, electronic trading also creates new and unique risks.  Today’s proposal is informed by examples of disruptions in electronic markets caused by both human error as well as malfunctions in automated systems—disruptions that would not have occurred in open outcry pits.  For instance, “fat finger” orders mistakenly entered by people, or fully automated systems inadvertently flooding matching engines with messages, are two sources of market disruptions unique to electronic markets.

Past CFTC Attempts to Address Electronic Trading Risks

The CFTC has considered the risks associated with electronic trading during much of the last decade.  Seven years ago, a different set of Commissioners issued a concept release asking for public comment on what changes should be made to our regulations in light of the novel issues raised by electronic trading.  Out of that concept release, the Commission later proposed Regulation AT.  For all its faults, Regulation AT drove a very healthy discussion about the risks that should be addressed and the best way to do so.

Regulation AT was based on the assumption that automated trading, a subset of electronic trading, was inherently riskier than other forms of trading.  As a result, Regulation AT sought to require certain automated trading firms to register with the Commission notwithstanding that they did not hold customer funds or intermediate customer orders.  Most problematically, Regulation AT also would have required those firms to produce their source code to the agency upon request and without subpoena.

Regulation AT also took a prescriptive approach to the types of risk controls that exchanges, clearing members, and trading firms would be required to place on order messages.  But this list was set in 2015.  In effect, Regulation AT would have frozen in time a set of controls that all levels of market operators and market participants would have been required to place on trading.  Since that list was proposed, financial markets have faced their highest volatility on record and futures market volumes have increased by over 50 percent.[5]  Improvements in technology and computer power have been profound—Moore’s Law would predict that computing power would have increased at least ten-fold in that time.[6]  Of course, I commend my predecessors for focusing on the risks that electronic trading can bring.  But times change, and Regulation AT would not have changed with them.

An Evolving CFTC for Evolving Markets

In withdrawing Regulation AT, the CFTC is consciously moving away from the registration requirements and source code production.  But in voting to advance the Risk Principles proposal outlined further below, the CFTC is committing to address risk posed by electronic trading while strengthening our longstanding principles-based approach to overseeing exchanges.

The markets we regulate are changing.  To maintain our regulatory functions, the CFTC must either halt that change or change our agency.  Swimming against the tide of developments like electronic markets is not an option, nor should it be.  The markets exist to serve the needs of market participants, not the regulator.  If a technological change improves the functioning of the markets, we should embrace it.  In fact, one of this agency’s founding principles is that CFTC should “foster responsible innovation.”[7]  Applying this reasoning alongside the overarching theme of The Leopard leads us to a single conclusion:  As our markets evolve, the only real course of action is to ensure that the CFTC’s regulatory framework evolves with it.

The Need for Principles-Based Regulation

So then how do we as a regulator change with the times while still fulfilling our statutory role overseeing U.S. derivatives markets?  I recently published an article setting out a framework for addressing situations such as this.[8]  I believe that principles-based regulations can bring simplicity and flexibility while also promoting innovation when applied in the right situations.  Such an approach can also create a better supervisory model for interaction between the regulator and its regulated firms—but only so long as that oversight is not toothless.

There are a variety of circumstances in which I believe principles-based regulation would be most effective.  Regulations on how exchanges manage the risks of electronic trading are a prime example.  This is about risk management practices at sophisticated institutions subject to an established and ongoing supervisory relationship.  But it is also an area where regulated entities have greater understanding than the regulator about the risks they face and greater knowledge about how to address those risks.  As a result, exchanges need flexibility in how they manage risks as they constantly evolve.

At the same time, principles-based regulation is not “light touch” regulation.  Without the ability to monitor compliance and enforce the rules, principles-based regulation would be toothless.  Principles-based regulation of exchanges can work because the CFTC and the exchanges have constant interaction that engenders a degree of mutual trust.  The CFTC—as overseen by our five-member Commission—has tools to monitor how the exchanges implement principles-based regulations through reviews of license applications and rule changes, as well as through periodic examinations and rule enforcement reviews.

Monitoring compliance alone is not enough.  The regulator also needs the ability to enforce against non-compliance.  Principles-based regimes ultimately give discretion to the regulated entity to find the best way to achieve a goal, so long as that method is objectively reasonable.  To that end, the CFTC has a suite of tools to require changes through formal action, escalating from denial of rule change requests, to enforcement actions, to license revocations.  The CFTC consistently needs to address the effectiveness and appropriateness of these levers to make sure the exchanges are meeting their regulatory objectives. And given that exchanges will be judged on a reasonableness standard, it must be the Commission itself—based on a recommendation from CFTC staff[9]—who ultimately decides whether an exchange has been objectively unreasonable in complying with our principles.

Proposed Risk Principles for Electronic Trading

This brings us to today’s proposed Risk Principles. The proposal centers on a straightforward issue that I think we can all agree is important for our regulations to address.  Namely, the proposal requires exchanges to take steps to prevent, detect, and mitigate market disruptions and system anomalies associated with electronic trading.

The disruptions we are concerned about can come from any number of causes, including:

  • excessive messages,
  • fat finger orders, or
  • the sudden shut off of order flow from a market maker.

The key attribute of the disruptions addressed in this proposal is that they arise because of electronic trading.

To be sure, our current regulations do require exchanges to address market disruptions. But the focus of those rules has generally been on disruptions caused by sudden price swings and volatility.  In effect, the proposed Risk Principles would expand the term “market disruptions” to cover instances where market participants’ ability to access the market or manage their risks is negatively impacted by something other than price swings.  This could include slowdowns or closures of gateways into the exchange’s matching engine caused by excessive messages submitted by a market participant.  It could also include instances when a market maker’s systems shut down and the market maker stops offering quotes.

As noted in the preamble to the proposal, exchanges have worked diligently to address emerging risks associated with electronic trading.  Different exchanges have put in place rules such as messaging limits and penalties when messages exceed filled trades by too large a ratio.  Exchanges also may conduct due diligence on participants using certain market access methods and may require systems testing ahead of trading through those methods.

It is not surprising that exchanges have developed rules and risk controls that comport with our proposed Risk Principles.  The Commission, exchanges, and market participants have a common interest in ensuring that electronic markets function properly.  Moreover, this is an area where exchanges are likely to possess the best understanding of the risks presented and have control over how their own systems operate.  As a result, exchanges have the incentive and the ability to address the risks arising from electronic trading.  Principles-based regulations in this area will ensure that the exchanges have reasonable discretion to adjust their rules and risk controls as the situation dictates, not as the regulator dictates.

The three Risk Principles encapsulate this approach.  First, exchanges must have rules to prevent, detect, and mitigate market disruptions and system anomalies associated with electronic trading.  In other words, an exchange should take a macro view when assessing potential market disruptions, which can include fashioning rules applicable to all traders governing items such as onboarding, systems testing, and messaging policies.  Second, exchanges must have risk controls on all electronic orders to address those same concerns.  Third, exchanges must notify the CFTC of any significant market disruptions and give information on mitigation efforts.

Importantly, implementation of the Risk Principles will be subject to a reasonableness standard.  The proposed Acceptable Practices clarify that an exchange would be in compliance if its rules and its risk controls are reasonably designed to meet the objectives of preventing, detecting, and mitigating market disruptions and system anomalies.  The Commission will have the ability to monitor how the exchanges are complying with the Principles, and will have avenues through Commission action to sanction non-compliance.

Framework for Future Regulation

I hope that today’s Risk Principles proposal will serve as a framework for future CFTC regulations.  Electronic trading presents a prime example of where principles-based regulation—as opposed to prescriptive rule sets—is more likely to result in sound regulation over time.  Through thoughtful analysis of the regulatory objective we aim to achieve, the nature of the market and technology we are addressing, the sophistication of the parties involved, and the nature of the CFTC’s relationship with the entity being regulated, we can identify what areas are best for a prescriptive regulation or a principles-based regulation.[10]  In the present context, a principles-based approach—setting forth concrete objectives while affording reasonable discretion to the exchanges—provides flexibility as electronic trading practices evolve, while maintaining sound regulation.  In sum, it recognizes that things will have to change if we want things to stay as they are.[11]

[1] Giuseppe Tomasi di Lampedusa, The Leopard (Everyman’s Library Ed. 1991) at p. 22.

[2] Frank, Julieta and Philip Garcia, “Bid-Ask Spreads, Volume, and Volatility: Evidence from Livestock Markets,” American Journal of Agricultural Economics, Vol. 93, Issue 1, page 209 (January 2011).

[3] Henderschott, Terrence, Charles M. Jones, and Albert K. Menkveld, “Does Algorithmic Trading Improve Liquidity?” Journal of Finance, Volume 66, Issue 1, page 1 (February 2011).

[4] Onur, Esen and Eleni Gousgounis, “The End of an Era: Who Pays the Price when the Livestock Futures Pits Close?”, Working paper, Commodity Futures Trading Commission Office of the Chief Economist.

[5] Futures Industry Association, “A record year for derivatives,” (March 5, 2019), available at https://www.fia.org/articles/record-year-derivatives.

[6] “Moore’s Law” predicts that the number of transistors in an integrated circuit doubles about every two years, and has held generally true since 1965. See generally Sneed, Annie, “Moore’s Law Keeps Going, Defying Expectations,” Scientific American (May 19, 2015).

[7] Commodity Exchange Act, Section 3(b), 7 U.S.C. § 3(b).

[8] Tarbert, Heath P., “Rules for Principles and Principles for Rules: Tools for Crafting Sound Financial Regulation,” Harv. Bus. L. Rev. (June 15, 2020).  Vol. 10 (https://www.hblr.org/volume-10-2019-2020/)

[9] CFTC Staff conduct regular examinations and reviews of our registered entities, including exchanges and clearinghouses.  As part of those examinations and reviews, Staff may identify issues of material non-compliance with regulations as well as recommendations to bring an entity into compliance.  Ultimately, however, the Commission itself must accept an examination report or rule enforcement review report before it can become final, including any findings of non-compliance.  Likewise, Staff are asked to make recommendations regarding license applications, reviews of new products and rules, and a variety of other Commission actions, although ultimate authority lies with the Commission.

[10] Tarbert, at 11-17

[11] Di Lampedusa, at 22.

-CFTC-

 

Public Statements & Remarks

Dissenting Statement of Commissioner Dan M. Berkovitz Regarding Volcker Covered Funds Final Rule

https://www.cftc.gov/PressRoom/SpeechesTestimony/berkovitzstatement062520b?utm_source=govdelivery

June 25, 2020

The Volcker covered funds final release (“Covered Funds Rule”) adopts with only minor changes the rule amendments as proposed by the agencies in January of this year (“the Proposal”).  I voted against[1] the Proposal because the agencies had only superficially considered the additional risks that banks would incur under the loosened regulations.  Nothing in the Covered Funds Rule final release dispels this concern.  Therefore I dissent from the final release.

Congress enacted the original Volcker rule after the 2008 financial crisis to protect American taxpayers from again having to bailout banks that are insured by the FDIC or have access to Federal Reserve Bank financial support.  This goal was to be achieved by preventing the government-supported banks from undertaking risky proprietary trading activities and from owning hedge funds or private equity funds.  The new Covered Funds Rule, together with the rollbacks in the Volcker proprietary trading regulations adopted in 2019,[2] will undermine many of the risk-reducing benefits of the original Volcker rule.

The original Volcker covered funds regulations were not perfect.  The foreign public funds exception and the so called “super 23A” provisions governing activities banks can undertake with covered funds needed careful adjustments.  However, the Covered Funds Rule goes much, much further.  It creates broad new exclusions from the covered funds definition with inadequate analysis as to whether these activities were intended to be permitted under the statute or pose serious risk to the banks and the United States financial system.

I addressed some of these new exclusions in more detail in my dissenting statement on the Proposal.[3]  Of these, the new “venture capital funds” exclusion perhaps best illustrates the extent to which the Covered Funds Rule undermines the very purpose of the Volcker rule.  Venture capital serves an important function in our financial markets by providing needed capital to startup companies.  But venture capital investing is very risky.  One study found that about 75% of venture capital-backed firms in the United States did not return capital to investors.[4]  Another article on venture capital noted that “VC funds haven’t significantly outperformed the public markets since the late 1990s, and since 1997 less cash has been returned to VC investors than they have invested.”[5]  This is exactly the type of risky private equity fund[6] investing by government-supported banks that Congress intended the Volcker rule to curtail.

In adopting the Covered Funds Rule, the agencies failed to analyze any data or other information that lays out the risks of venture capital investing.  The agencies simply exclude venture capital funds from Volcker regulation.  The Covered Funds Rule makes, at best, a weak case that venture capital investments promote and protect the safety and soundness of banking entities and the United States financial system by allowing banks to diversify investments.  The weakness of that assertion is clear when one considers that allowing any investments in hedge funds and private equity funds would do the same, and yet that risk taking activity is precisely what Congress prohibited.

The banking industry does not need to take on the additional risks permitted by the Covered Funds Rule to be successful.  U.S. banks have performed well in recent years.  Recent Global League Tables ranking global banks by amount of banking business activity shows that three or four U.S. banks are ranked among the top five banks in the world in almost every table, including the tables for foreign markets banking.[7]  While many factors impact banking success, the relative strength of U.S. banks internationally belies suggestions that the new laws and regulations adopted in the wake of the 2008 financial crisis are hurting the competitiveness of U.S. banks.  We should recognize, rather than undermine, the success of U.S. banks since the 2008 financial crisis and adoption of the Dodd-Frank Act in 2010.

To date, U.S. banks also have performed well during the Covid-19 pandemic.  But our financial system continues to face many extraordinary risks from the effects of the pandemic.  In the middle of this latest shock to our financial system, we should not be rushing out a final rule that permits greater risk taking by banks.  Rather, we should take stock of the data available to us, and make carefully reasoned, incremental changes that are consistent with the Congressional intent for the Volcker rule.

[1] Dissenting Statement of Commissioner Dan M. Berkovitz Regarding Volcker Covered Funds Proposal (Jan. 30, 2020), available at: https://www.cftc.gov/PressRoom/SpeechesTestimony/berkovitzstatement013020.

[2] Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships with, Hedge Funds and Private Equity Funds, 84 FR 61974 (Nov. 14, 2019).

[3] Supra footnote 1.

[4] Deborah Gage, The Venture Capital Secret: 3 out of 4 Start-Ups Fail, Wall Street Journal (Sept. 20, 2012) (citing research by Shikhar Ghosh, a senior lecturer at Harvard Business School), available at https://www.wsj.com/articles/SB10000872396390443720204578004980476429190.

[5] Diane Mulcahy, Six Myths About Venture Capitalists, Harvard Business Review (May 2013), available at https://hbr.org/2013/05/six-myths-about-venture-capitalists.

[6] Interestingly, while the Proposal acknowledged that venture capital funds are a subset of private equity funds for purposes of Volcker, in the preamble to the Covered Funds Rule, the agencies provide a tortured, speculative analysis of statutory construction trying to explain that Congress “may” have meant to exclude venture capital funds, despite no real evidence to that effect.  To the contrary, three of the four statements from members of Congress in the legislative record cited in the Covered Funds Rule clearly show that they assumed that venture capital funds are private equity funds under the Volcker rule.  See Covered Funds Rule, section IV.C.2.i.

[7] See GlobalCapital.com, Global League Tables, available at https://www.globalcapital.com/data/all-league-tables.

-CFTC-

 

Public Statements & Remarks

Dissenting Statement of Commissioner Rostin Behnam Regarding Revisions to the Volcker Rule

https://www.cftc.gov/PressRoom/SpeechesTestimony/behnamstatement062520?utm_source=govdelivery

June 25, 2020

I respectfully dissent as to the Commission’s decision to finalize additional revisions to the Volcker Rule.  As we approach the ten year anniversary of the Dodd-Frank Act,[1] and cautiously begin mapping a path out of the current pandemic, I believe it is a good time to reflect on the lessons learned from the 2008 financial crisis, the efficacy of our responses, and whether our objectives have changed, or just our perspective.  One of the many critically important provisions of the Dodd-Frank Act is the Volcker Rule.  The Volcker Rule, in simple terms, contains two basic prohibitions:  (1) banking entities may not engage in proprietary trading; and (2) banking entities cannot have an ownership interest in, sponsor, or have certain relationships with a covered fund.

Last September, the Commission, along with other Federal agencies (the “Agencies”),[2] approved changes that significantly weakened the prohibition on propriety trading by narrowing the scope of financial instruments subject to the Volcker Rule.[3]  I did not support those changes.[4]  Today, the Commission, again in tandem with the Agencies, completes the dismantling that began in 2018,[5] and votes to significantly weaken the prohibition on ownership of covered funds.  Again, I cannot support these changes.

I voted against the 2018 proposal, and earlier this year, voted against the proposal that strikes the final blow today.[6]  In voting against the 2020 proposal, I quoted the late Paul Volcker’s letter to the Chairman of the Federal Reserve, which he penned last September, when the Agencies approved the changes breaking down the proprietary trading prohibition.[7]  Mr. Volcker warned that the amended rule “amplifies risk in the financial system, increases moral hazard and erodes protections against conflicts of interest that were so glaringly on display during the last crisis.”[8]  Mr. Volcker’s words apply equally well to the changes that the Commission finalizes today regarding covered funds—particularly the erosion of the existing protections regarding conflicts of interest.

As the tenth anniversary of the Dodd-Frank Act sadly coincides with a different kind of crisis, I think it is critical to take a hard look at how far we have come in ten years, and how well markets have adapted to carefully crafted policy intended to create a more resilient financial system.  Chipping away, particularly at a time of great uncertainty, risks a reversion to the past, when in fact, we should only be looking forward.

[1] Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010).

[2] The Office of the Comptroller of the Currency, Treasury; the Board of Governors of the Federal Reserve System; the Federal Deposit Insurance Corporation; and the Securities and Exchange Commission.

[3] Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships With, Hedge Funds and Private Equity Funds, 84 FR 61974 (Nov. 14, 2019).

[4] Id. at 62275.

[5] See Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships With, Hedge Funds and Private Equity Funds, 83 FR 33432 (proposed July 17, 2018).

[6] Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships With, Hedge Funds and Private Equity Funds, 85 FR 12120, 12204 (proposed Feb. 28, 2020).

[7] Id.

[8] Jesse Hamilton and Yalman Onaran, “Volcker the Man Blasts Volcker the Rule in Letter to Fed Chair,” Bloomberg (Sep. 10, 2019), https://www.bloomberg.com/news/articles/2019-09-10/volcker-the-man-blasts-volcker-the-rule-in-letter-to-fed-chair.

-CFTC-

 

Public Statements & Remarks

Statement of Chairman Heath P. Tarbert in Support of the Final Rule to Revise the Volcker Rule

https://www.cftc.gov/PressRoom/SpeechesTestimony/tarbertstatement062520?utm_source=govdelivery

June 25, 2020

As I have previously remarked, the Volcker Rule is “among the most well-intentioned but poorly designed regulations in the history of American finance.[1]”   While today’s final rule does not fix the fundamental flaws of the Volcker Rule[2]—only congressional action can do that—it at least represents a more accurate reading of the law Congress actually passed and brings us a step closer to a reasonable implementation of the rule.[3]

Specifically, the Volcker Rule will now no longer be applied to investments Congress never intended to be included in the first place, such as credit funds, venture capital funds, customer facilitation vehicles, and family wealth management vehicles.  The final rule also contains important modifications to several existing exclusions from the prohibition on activities related to private equity and hedge funds (the “covered funds” provisions)—for foreign public funds, loan securitizations, and small business investment companies.  In these ways, the final rule begins to address the over-breadth of the covered funds definition and related requirements.

I am therefore pleased to support adoption of the proposed revisions to the Volcker Rule’s covered funds provisions.  While only a modest step forward, these refinements will nonetheless enhance the regulatory experience and provide clarity for market participants who have struggled to comply with the Volcker Rule.

[1] See Statement of Chairman Heath P. Tarbert in Support of Revisions to the Volcker Rule (Sept. 16, 2019), https://www.cftc.gov/PressRoom/SpeechesTestimony/tarbertstatement091619.

[2] See, e.g., Economic Growth, Regulatory Relief, and Consumer Protection Act, Public Law No: 115-174 (May 24, 2018) (amending section 13 of the Bank Holding Company Act by narrowing the definition of “banking entity” in the Volcker Rule to exclude certain community banks).

[3] See Statement of Chairman Heath P. Tarbert in Support of Further Revisions to the Volcker Rule (Jan. 30, 2020), https://www.cftc.gov/PressRoom/SpeechesTestimony/tarbertstatement013020b.

-CFTC-

 

Release date: 24 Jun 2020 | Eurex Clearing

Eurex Clearing welcomes new members to the Supervisory Board

https://www.eurexchange.com/exchange-en/about-us/news/Eurex-Clearing-welcomes-new-members-to-the-Supervisory-Board-2074022

https://twitter.com/EurexGroup/status/1275809430093860864?s=20

  • Three new Supervisory Board members appointed
  • The five most active participants in the Eurex Clearing Partnership Program continue to hold seats

As of today, the Supervisory Board of Eurex Clearing, one of the largest clearing houses globally and part of Deutsche Börse Group, welcomes three new members.

Tammo Diemer, Managing Director at the Federal Republic of Germany Finance Agency GmbH, will succeed Jutta Dönges.

In addition, two new members were appointed based on the Eurex Clearing Partnership Program. The performance-based program grants the five most active financial institutions in the clearing of over-the-counter interest rate derivatives a seat on the Supervisory Board and thus a voice in corporate policy.

In the past two years these were: Commerzbank, Deutsche Bank, J.P. Morgan, LBBW and UniCredit. For the latter, Tong Lee, Head of Fixed Income & Currencies at UniCredit Group, will be a member of the board in future. For Deutsche Bank, David Feldmann, Head of Capital Markets Germany, Austria & Switzerland, will take over the mandate from Stefan Hoops, Head of Corporate Bank. Raphaël Masgnaux of BNP Paribas leaves the Board at the end of his term.

Eurex Clearing launched the program in 2018 to promote Euro Clearing in the EU-27. Besides the five Supervisory Board mandates, the ten most active participants will share in the earnings. In addition, they are involved in the strategic development of the company through a seat on the FIC Board Advisory Committee. Morgan Stanley will be a member of this advisory body for the first time.

Since its launch, the program has gained broad market acceptance with 40 market participants joining from the USA, Great Britain, Asia and Continental Europe. In terms of outstanding volume, Eurex Clearing’s market share in clearing over-the-counter interest rate derivatives has risen from 2.8 percent at the beginning of 2018 to currently stand at 18 percent.

Media contacts:

Irmgard Thiessen
+49-69-211-15911
irmgard.thiessen@deutsche-boerse.com

Peter Josse
+49-69-211-16966
peter.josse@deutsche-boerse.com

 

Release Number 8184-20

Federal Court Orders Alabama Man to Pay $755,000 for Binary Options Fraud

https://www.cftc.gov/PressRoom/PressReleases/8184-20?utm_source=govdelivery

June 17, 2020

Washington, D.C. — The Commodity Futures Trading Commission today announced that the U.S. District Court for the Northern District of Alabama issued an order granting a permanent injunction against Aaron B. Butler, a former resident of Muscle Shoals, Alabama, and requiring him to pay a combined $755,000 in restitution and civil monetary penalty for violations of the Commodity Exchange Act and CFTC regulations. The order also imposes permanent trading and registration bans on Butler, among other injunctive relief.

The court’s order stems from a CFTC complaint filed on November 4, 2019, charging Butler and his company, Negus Capital Incorporated (NCI), also of Muscle Shoals, with fraudulent solicitation, misappropriation, and registration violations in connection with binary options trading. [See CFTC Press Release No. 8070-19]

The order finds that from March 16, 2017, through February 21, 2018, Butler, in his individual capacity and on behalf of NCI, unlawfully solicited and accepted $305,000 from more than 70 customers to trade binary options contracts, defrauded those customers, and operated as an unregistered commodity trading advisor.

In particular, the order finds that Butler misrepresented his treatment of customers’ deposits totaling between $500 and $5,000, claiming he would pool those funds into a single trading account, and that he, acting as the trader for NCI, would use them to trade binary options on the customers’ behalf. The order also finds that Butler misled customers that he would deposit each customer payment of $5,000 or more into separate customer trading accounts, and Butler would, for a fee, manage and trade binary options on behalf of customers. Rather than trade customer funds as promised, Butler instead misappropriated most, if not all, funds for his own personal benefit, including spending tens of thousands of dollars on jewelry, purchases at an electronics store, and retail gift cards.

In its continuing litigation against NCI, the CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, restitution, permanent registration and trading bans, as well as a permanent injunction against future violations of the Commodity Exchange Act and CFTC regulations.

The CFTC thanks the Alabama Securities Commission for its assistance in this matter.

The Division of Enforcement staff members responsible for this case are James Deacon, Kevin Samuel, Erica Bodin, and Rick Glaser.

-CFTC-

 

Mortgages, recession and the market drops.

Lenders have minimized their mortgage offering as a result to get their bearings during the COVID virus.

Unemployment has climbed substantially in the US. The saving of borrowers has suffered.

If there is a load of properties entering the markets it could impact on property prices, there would be an increase of properties but also the demand would have leveled off. If someone has recently lost a job, it may lead to borrowers not qualifying for a new loan.

Things are different then 2008 when they gave out bad loans, and others were betting against those loans. Many defaulted on these variable loans, and banks sold derivatives betting against these loans. The housing market collapsed.

This time the banks will not struggle like before, nor will they need to be bailed out by any government.

Banks are not offering new loans until they had time access the impact of the COVID virus. Most have no idea of when and how a recovery will reestablish a stable marketplace. This is a complete and confusing situation for all.

Many are now calling that the US economy has entered into a recession, there has been a dramatic decline in employment and economic activity. Some are saying it started in February of 2020.

How long will we be in this recessi8on is the question, we are entering this downturn in amazing speed.

This is a global story, a gloomy forecast, after the longest economic expansion in the history of the US. The pandemic impacts all over the world and the rebound may be slow in coming. This is the first global recession triggered by a pandemic.

If there is a second wave of the pandemic it will cause a deeper economic downturn. Will the US close the economy a second time, it may depend how severe a second wave occurs.

Governments have taken extraordinary measures to contain the economic fallout. Infection numbers are increasing in different parts of the world. A lot of debt was issued to pay for COVID. Social justice issues are critical. There are going to be long lasting problems, policy makers cannot postpone corrective measures that need to be addressed for health care, social justice, households that need help with rents and mortgages.

The most vulnerable economies need debt forgiveness; the poorer countries need more help. Deep recessions create adverse impacts on growth. Policy makers now need to address the decline in growth, create reforms to address long term growth, health care and innovation.

Some companies should be allowed to fail. 40 million people in the US are now unemployed. Many will not be able to their previous employer after the COVID recedes and will require more training for new skills.

Direct fiscal stimulus should go directly to the US consumers, this was the lessons we learned from the downturn in 2008.

Now is not the time to fund zombie companies. Let them fail. Asset inflation does not fix the economy, does not solve income disparity, does not solve full employment, but investors in the financial markets will make money.

Consumers are not going to spend. Consumers will save.

Did the market crash start today? Is this a bubble burst? The market was down over 6%, there is concern of a second wave of the corona virus, a wild day on the market. The slightest increase in interest rates will crash the economy. Corporate debt is at an all-time high. These companies are doing share buybacks. This increases their stock prices.

Various companies are cutting jobs, so now where are the new jobs going to originate?

Are investors pricing in risk? What is the real state of the economy? It is a difficult labor market.

Companies need to fail and we need to avoid propping them up.

 

COVID

North American economic outlook, US and Canada.

Moving forward, how do we unwind the government support, given the heightened debt?

Elevated debt may be the lesser of two evils. Growth may become subdued for the foreseeable future. Corporate and consumer debt will act as a constraint on growth. There may be minimal growth drivers. New and enhanced government regulations will need to be provided to create comfort levels for consumers, and employees to exhibit confidence in the marketplace and work environment.

Government and consumer debt will remain persistent. Central banks have had to move in an extreme manner.

This is a global pandemic and it is a global shock; there will be less of corporate and housing expenditures, resulting in an anemic recovery. There does not appear to be a natural pathway out of all of the sovereign and personal debt. National debt has exploded.

Slowly cyber conflict will increase between nations, such as between China and the US.

Oil production has weakened because of the lack of global demand. Covid has burned through balance sheets, oil has lost substantial value. There are geopolitical risks, and reforms are required for those that are dependent on increased oil prices. Investments are required into diversified renewables, and energy savings programs, and maybe more compact fluorescent lights.

The oil era is ending and oil demand may decrease even further. Zoom is having an impact on the airline and hotel industries. I attended two webinars this week.

International supply chains are affected by the corona virus, another example of the world being dependent on China, China supplies many common medications. Pain killers, antibiotics, and pricing pressures have led to dependence on China’s manufacturing. The Chinese dominance will have to be addressed by governments.

The US has dominated the financial landscape since WW II. China is competing to step up to tip the balance of power. The US controls the world financial plumbing and 80% of the global supply chain use dollars. China’s banks are enormous. Bank assets in the US have stabilized. China has the second biggest bond market in the world, and during the pandemic outbreak it remained stable. Investor confidence in China has been proven to be unwavering during this pandemic.

China is targeting digital wallets for payments, creating a parallel financial ecosystem. Transparency is always important on global trade. The Chinese intent of covering up the origin of the COVID virus has created some doubt about their overall transparency..

A currency crisis may be on the horizon. Governments at this time are over printing their currency. The Great Depression caused deflation, the value of the currency then increased, and the real value of debt was increased.

The last few months alone the governments have borrowed over 16T of debt to fight the lockdowns around the world. The over production of the currency to combat government spending will result in the devaluation of the currency. Anyone with debt, governments, businesses or individuals will have amplified debt, which are now at all-time high for debt burdens and trying to survive in a deflationary spiral is not an easy thing to do. As the price of goods fall, businesses will spend less money, and then there will be more layoffs.

The demand for the dollar supply is high, Eurodollars, dollars outside the US. The Fed does not have jurisdiction over the Eurodollars. People all over world needs dollars.

 

COVID – Retail bankruptcies

Now the economy has Covid. Going forward so much will depend how the lockdown ends.

Hertz, this 100 year company bites the dust, so add another brand name that is seeking bankruptcy coverage in this Covid-19 society. Credit quality is collapsing. These businesses have little or no money to cover their debts.

Chapter 11 means they are trying to fight for their survival, slim down, get rid of some assets and some debt.

Business owners will not be able to quickly turn their business back on after the economy is re-opened. Some stores will close and never come back. People will not run back to the malls after the economy re-opens. The consumer must shop. There will be carnage in the mall industry. Real estate experts are probably expecting a shakeout for the malls.

How will apparel companies come back? People will want to try clothes on, but will remained concerned about COVID, consumers will want to be assured their visits to the retail stores will be safe. New cleaning procedures will be required and this will be a new cost of doing business for the surviving merchants, consumers have to feel safe in these public spaces. It has to be beyond face masks.

Houston is becoming bankruptcy central. Many businesses have filed bankruptcy there, and some already have pre-arranged plans to exit from bankruptcy. Some businesses could be looking for a buyer, consumer are changing the way they shop. Brick and mortar store have to compete against ecommerce and they probably may not survive.

Timing the liquidity of retail inventory is critical, some of this inventory is seasonal and now is not the right time because the stores are closed.

There will be a reduction of the retail footprint in the US. Neiman Marcus, JCrew, were leveraged buyouts, putting a great deal of debt on their balance sheets, they have been saddled with a lot of debt loads.

JC Penny filed after a further review, it has 80K workers.

The retail sector will be prime for consolidation. Walmart, Target and Lowes and other home improvements have good sales to report.

Unemployment now is at 14%. Over 35 million people have filed jobless claims.

The amount of money printing by the Fed, could or may lead to the collapse of the dollar. The Fed will probably have to face legal challenges before the Supreme Court.

Resources will be freed up the more we see the brand names and others file bankruptcy. Businesses are going to fail and the economy was weak before Covid appeared.

The interference exacerbates a required economic downturn, let the bad actors fail. Mismanaged companies must fail to free up resources.

Is there any more room for rate cuts, probably not? Companies are filing bankruptcy because they hold minimal savings.

The economy does not need more debt or consumption, rather it needs to cut back spending. Giving money away may have a short term benefit and it has been much needed, but it may remain the worse long-term strategy.

The government has to be paid for, usually through taxes, but this money that the Fed is providing will be paid back. The government is taking the purchasing power away from our own money and the cost of living is going to increase. This money the government is giving away is diminishing the money we have in our pockets. Any dollar the government spends is every dollar that must be funded. More bankruptcies will occur.

In the next period of growth will be hardware focused, rather than be focused upon outsourcing to China. So much for the outsourcing of the manufacturing of life saving ventilators to China.

Debt agreements will be threatened, will the attorneys get paid?

 

Release Number 8172-20

CFTC Obtains $700,000 Judgment Against New York Man in Fraud and Misappropriation Scheme

https://www.cftc.gov/PressRoom/PressReleases/8172-20?utm_source=govdelivery

June 02, 2020

Washington, D.C. — The Commodity Futures Trading Commission today announced that the U.S. District Court for the Southern District of New York entered a consent order for permanent injunction against defendant Eyal Alper of Irvington, New York, in connection with a fraudulent scheme.

The order requires Alper to pay restitution totaling $352,901, plus a civil monetary penalty of the same amount. The order also imposes permanent trading and registration bans on Alper and prohibits him from violating provisions of the Commodity Exchange Act and Commission regulations, as charged. The order stems from a CFTC complaint filed on October 24, 2019, which charged Alper with fraud, misappropriation, and engaging in prohibited activities as a commodity trading advisor. [See CFTC Press Release No. 8061-19]

The order finds that beginning in late 2015 and lasting until October of 2019, Alper fraudulently solicited members of the public to trade futures and foreign currency (forex) contracts through managed accounts.  To solicit customer funds, Alper made material misrepresentations and omissions, including that he was an experienced and successful trader who controlled a large-dollar trading account at a UK-based trading firm. Additionally, Alper never opened trading accounts for his customers as promised, but instead misappropriated virtually all of the funds provided to him to pay his own personal expenses, including, among other things, international travel, restaurant bills, and car rentals. To conceal his misappropriation, Alper sent false statements to his customers reporting profits in the fictitious accounts and lied to customers about conditions that purportedly prevented him from honoring their withdrawal requests.

The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure that wrongdoers are held accountable.

The CFTC thanks and acknowledges the assistance of the UK Financial Conduct Authority.

The Division of Enforcement staff members responsible for this case are Alan Edelman, Kara Mucha, Erica Bodin, Daniel Jordan, and Rick Glaser.

* * * * * * *

CFTC’s Foreign Currency (Forex) Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency (Forex) Trading Fraud Advisory, to help customers identify this sort of scam.

The CFTC also strongly urges the public to verify a company’s registration with the Commission before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.

-CFTC-

RELATED LINKS

Consent Order: Eyal Alper

 

Public Statements & Remarks

Remarks of CFTC Director of Enforcement James McDonald at Futures Industry Association Fireside Chat

https://www.cftc.gov/PressRoom/SpeechesTestimony/opamcdonald6?utm_source=govdelivery

May 28, 2020

Thank you for that introduction and thanks to all the folks at FIA for hosting me.  And thank you all for being with us today, if only virtually.  We at the CFTC are wishing everyone the best, and hoping all of you stay safe and healthy during this difficult time.  We look forward to being back together in person, hopefully before too long.

We’re together today to talk about penalties at the CFTC, and the penalty guidance we recently issued in the Division of Enforcement.  But before we dig into the details, I want to take a step back, and offer our view about how we got here, and what we’re hoping to accomplish with this penalty guidance.[1]

The Path Starts with Dodd-Frank

The path here, in my view, traces back to July 2010 and the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Dodd-Frank sought, among other things, to improve transparency, mitigate systemic risk, and protect against market-related abuse in the U.S. derivatives markets.  Congress largely placed responsibility for implementing these derivatives-market reforms with the CFTC.

This of course, had significant implications for the Commission, and for the Division of Enforcement.  Among other things, Dodd-Frank significantly expanded the Commission’s enforcement jurisdiction, and it granted the Commission new enforcement tools to wield in policing this broader jurisdiction.  Over the balance of the next decade, the Commission and its dedicated staff of career civil servants have shown themselves to be up to the task Congress laid out in Dodd-Frank.

Consider just a few data points.  Since Dodd-Frank, the Commission’s enforcement program has focused on the most pernicious forms of wrongdoing, bringing more cases involving misconduct that undermines market integrity, like manipulation and spoofing, than ever before.  To increase the deterrent effect of our enforcement actions, we’ve imposed substantial penalties, enhanced our evaluation of compliance programs, strengthened remediation requirements, and ramped up our parallel activity with the Department of Justice.  To keep pace with our rapidly evolving digital markets, we’ve revolutionized the way we collect, analyze, and use data.  And to increase transparency and fairness, we’ve taken significant steps to make public the policies, procedures, and practices that guide our actions, and to explain why we take the actions we do.  The penalty guidance we’ll talk about today flows from this final point.

The CFTC Is Committed to Transparency, Fairness, and Advancing the Rule of Law

Recently, the Commission for the first time articulated a set of core values:  Commitment, Forward-thinking, Teamwork, and Clarity.[2]  Our penalty guidance advances the core value of clarity, providing market participants with greater transparency as to Division staff’s decision-making processes in this critical area.  As Chairman Tarbert has stated, “[W]e must be transparent in how we enforce the law.  One goal of our enforcement program is to change behavior in a positive way by deterring misconduct before it happens.  Deterrence requires clarity about how our laws work.”[3]

In this vein, the Division of Enforcement has taken a number of significant steps to promote transparency and increase clarity.  We published an Enforcement Manual, laying out publicly for the first time the Division’s practices and procedures.[4]  We began issuing Annual Reports at the conclusion of the Fiscal Year, laying out the Division’s priorities, and explaining how the Division’s enforcement efforts were designed to advance them.[5]  And we explained in publicly available staff guidances how the Division would handle a variety of issues—ranging from cooperation and self-reporting, to new areas of enforcement activity, to today’s topic, penalties.[6]  This push toward ever greater transparency is something that, under Chairman Tarbert’s leadership, I know will continue.

Penalty Guidance—What We’re Hoping To Achieve

Last week, the Division of Enforcement issued penalty guidance to all staff, which we made publicly available and published in an updated version of our Enforcement Manual.[7]  This marks the first formal public statement on penalties at the CFTC in 25 years.  The memorandum to staff with the guidance is available on the CFTC website, as is the Enforcement Manual.  I encourage you to read the guidance carefully.

So why issue this penalty guidance at all, and why now?  This is where we turn back to Dodd-Frank.  In the nine Fiscal Years since Dodd-Frank, the CFTC has obtained more than $13.6 billion in monetary relief.  That’s an average of more than $1.5 billion per year.  As you might expect, given the dramatic expansion of jurisdiction and authority that came with Dodd-Frank, these numbers mark a sharp increase over the pre-Dodd-Frank averages.

Just as the size of the penalties have grown, so too has the breadth of cases that have produced these penalties.  We’ve pursued misconduct in every corner of our markets, from cattle futures traded by feedyards to financial instruments traded by Wall Street banks.  We’ve obtained significant penalties in traditional markets like precious metals, and new-age markets like digital assets.  And we’ve kept pace as our markets transformed from analogue to digital, from order tickets trading hands in the pits to algorithms trading at high frequency on the screen.

So over the past several years, we have regularly brought cases commanding eight—and sometimes nine—figures in monetary relief, stretching across an ever-growing range of market activity, often involving new rules, new conduct, and new CFTC market participants.  Yet we had not made a clear public statement as to how we arrived at particular penalties, or what we hoped to accomplish by imposing them.  That’s where our penalty guidance comes in.

On a big picture level, this penalty guidance reflects our view that the ultimate goal of our enforcement program is to deter misconduct.  Indeed, the guidance explains that, in considering the appropriate penalty, staff will “be guided by the overarching consideration of ensuring the proposed penalty achieves the dual goals of specific and general deterrence.”[8]

But for enforcement actions to deter, the potential wrongdoer must have some sense of how certain types of misconduct will be punished.  For companies to build effective compliance programs, they must understand how enforcement authorities would view certain categories of conduct.  For business executives to cultivate a true culture of compliance, they must be able to explain to their employees how enforcement bodies would separate right from wrong, and the expected consequences for any wrongdoing.  All of this requires clear statements about how and why enforcement authorities punish.

Moving from the big picture to the more pragmatic, we also issued the penalty guidance in the hopes it would be informative and useful on a practical level.  Consistent with the CFTC’s history as a principles-based regulator, the penalty guidance sets out the principles and factors that will guide staff action.  This has the added benefit of yielding a document that is short enough that the people affected—business leaders, compliance professionals and market participants—should be able to easily read it, understand it, and implement any lessons learned. In addition, the guidance binds Division staff, ensuring consistency across teams.  And by making clear to the outside world the factors we consider, the guidance should streamline any discussions we have with defense counsel and market participants about penalties.  To the extent you are preparing for discussions with staff about penalties, your preparations should focus on the factors laid out in the guidance.

*         *         *

In the end, it seems to us that Justice Oliver Wendell Holmes got it right when he wrote about penalties.  We all wish, as Holmes explained, to deal only with what he called the “good men.”[9]  But at times, particularly when it comes to enforcement, we must confront the “bad man” as well.[10]  It is for them we must design systems that offer the bad man “as much reason as a good one for wishing to avoid an encounter with the public force.”[11]  For even “[a] man who cares nothing for an ethical rule which is believed and practiced by his neighbors is likely nevertheless to care a good deal to avoid being made to pay money, and will want to keep out of jail if he can.”[12]

If we in the Division of Enforcement can use penalties to make the bad man, just as much as the good, follow the law, we will have achieved our ultimate goal:  to use the law, and the rule of law, “to make good citizens, and good men.”[13]  That is what we are hoping to achieve.

 

[1] As I begin, please keep in mind that the views I express today are my own and do not necessarily represent the views of the Commission, its staff, or the Commissioners.

[2] CFTC, Mission, Vision, and Values, https://www.cftc.gov/About/Mission/index.htm.

[3] Chairman Heath P. Tarbert, CFTC, Statement: “Tripling Down on Transparency” (Dec. 10, 2019), https://www.cftc.gov/PressRoom/SpeechesTestimony/tarbertstatement121019.

[4] See https://www.cftc.gov/LawRegulation/Enforcement/EnforcementManual.pdf.

[5] See https://www.cftc.gov/media/3081/ENFAnnualReport112519/download.

[6] Each of these guidances is published in the Division’s Enforcement Manual.

[7]   See Memorandum from James M. McDonald, Director, Division of Enforcement, to Division of Enforcement Staff (May 20, 2020), https://www.cftc.gov/media/3896/EnfPenaltyGuidance052020/download (“May 20, 2020 Memorandum”).

[8] May 20, 2020 Memorandum at 2.

[9] Oliver Wendell Holmes, Jr., The Path of the Law, 10 Harv. L. Rev. 457, 458-59 (1897).

[10] Id. at 457.

[11] Id.

[12] Id.

[13] Id. at 457-58.

-CFTC-

 

Release Number 8168-20

CFTC Unanimously Approves an Interim Final Rule and a Proposed Rule at May 28 Open Meeting

https://www.cftc.gov/PressRoom/PressReleases/8168-20

May 28, 2020

Washington, D.C. — The Commodity Futures Trading Commission at its open meeting today unanimously approved an interim final rule to grant an extension of the compliance schedule for initial margin requirements for uncleared swaps in response to operational challenges certain entities are facing due to the COVID-19 (coronavirus) pandemic. The Commission also unanimously approved a proposed rule which provides an exemption from registration as a commodity pool operator (CPO) for certain foreign persons.

Interim Final Rule: Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants

The Commission unanimously approved an interim final rule (IFR), which defers the compliance date of September 1, 2020 for the initial margin requirements under the CFTC Margin Rule to September 1, 2021. The IFR is intended to provide entities subject to the September 1, 2020 compliance date with additional time in light of COVID-19. This IFR is consistent with the Basel Committee on Banking Supervision and the International Organization of Securities Commissions’ (BCBS/IOSCO) recent revisions to the implementation schedule for margin requirements for non-centrally-cleared derivatives.

The IFR will be effective when published in the Federal Register. Comments on the IFR are due 60 days after the date of publication in the Federal Register.

Proposed Rule: Exemption from Registration for Certain Foreign Persons Acting As Commodity Pool Operators of Offshore Commodity Pools

The Commission unanimously approved a proposed rule that amends regulation 3.10(c)(3), which provides an exemption from registration as a CPO for certain persons located outside the U.S. who are operating offshore commodity pools that are neither offered nor sold to U.S. participants. This proposal also includes other measures related to CPO requirements.

This proposed rule has a 60-day comment period following publication in the Federal Register.

Additional information on these rulemakings, including statements of Chairman Heath P. Tarbert and Commissioners Brian Quintenz, Rostin Behnam, Dawn Stump and Dan Berkovitz, is available here.

-CFTC-

 

Real estate will Probably crash

5.24.20

Where does it soften first? Timing a crash to protect our assets is challenging yet it critical to know when. How are the real estate experts looking at the economy?

What is the debt load of consumer debt, household, car, credit cards, and student loans?

This can be psychological debilitating on the whole society as we go deeper into an economic slowdown, really just depressing.

Job losses, layoffs, and furloughs make it difficult to service debt of any sort. 35 million people in the US have filed for unemployment, (14% unemployment at this time).

How many houses have been pulled off the market or the prices have been adjusted downward?

75% of the home loans are guaranteed by the federal government. Fannie Mae, Ginnie Mae, VA and others.

Renters also want forbearance. Investors need their payments going to REITS and pension funds. The damage will be different then 2008 financial crisis. Jobs lead to payments being made. When forbearance runs out the problems will surface, homes will probably flood the market.

Investors must protect their capital and so it will be easier to capitalize on opportunities that will become present.

Significant brand names of retailers are filing for bankruptcy. The US shopping mall vacancies has accelerating, which we saw in the financial crisis of 2008. Failure to pay rents can create a shock wave leading to further systemic challenges. Landlords must be paid.

Even of some of these retailers reopen after the virus crisis becomes minimized it does not mean we should conclude that they will be quickly reestablished. Many people will not have the jobs they had pre-Covid-19. All of the players related to the payments of commercial rents will be impacted, like institutional investors such as, but not limited to, REITS.

Investors should be looking for the bottom, personal and in the markets. The economy will be somewhat reflected in stock prices. Like car sales slumps affecting shipping and storage of vehicles, many are affected because consumers are not positioned to make substantial purchases.

States in the US are starting to open gradually. Testing is critical, the US remain short in this area because this is not a garden variety correction.

The number of new virus cases in the US has plateaued; but we are not seeing a decline in the US yet. Another virus surge is probably coming, and many more may come in waves. Respiratory viruses spread easier in winter. We could see mini waves when more states open again.

Soap will destroy this virus, so keeping our hands clean with thorough washings each time will help our cause. This virus destroys the weaknesses in all health care systems. Cities that are more crowded, and where there are a significant number of people of color who lack access to health care, urban areas that are densely populated suffer the most. Crowded subways, subway cars are dangerous because of stale air. Of course this will lead to severe economic fallout.

The longer, and the later the governments fail to act, the worse the results will become.

Wearing a mask will decrease the amount of germs one would spread. Constant testing is critical. There is no guarantee there will be a vaccine for this corona virus. This virus is aggressive. When we social distance we are buying time, by flattening the curve. There are not enough hospital systems, ventilators, and physicians, and ambulances cannot get there fast enough, after the ambulance travels where do they take a new patient? Big questions right?

Unemployment this past week was up again, the balance sheet of the Fed is over seven trillion. Are price controls on the horizon? How many more QE’s is the US able to handle? The Fed is really the central bank to the world.

Recent history the Fed has been creating billions and billions of dollars each week. There is no value associated with this new money, and printing money does not create jobs. Tremendous inflation should be upon us soon. This new money has to be repaid.

Central banks are learning that negative rates are not working. The Fed will not be able to reverse the economic course with all of this money printing. The Fed is the only buyer of late, former buyers of this US debt may not come back, and they will probably want more behind the money to return as active buyers, maybe they will want more interest. Sellers of debt may have pushed the envelope too far. If we print it, creating all of these bank reserves, there has to be growth, and there has been minimal growth for the past ten years. Pre-COVID the banks were not lending, they were seeing credit risk and were not making loans.

Cash deposits are rising, and people are saving more because of worry of the economic growth. There will not be a sovereign debt jubilee. Helicopter money creates velocity, it can only do so much like bailing out Wall Street. The Fed needs congress to find a means to get money to the middle class.

The Fed cannot print jobs, and Covid is different than ’08. China growth is now at a 30 year low, we are going through a long process of keeping marginal companies in business and they will probably eventually die.

Massive government spending and paying for the money spending is not going to save the economy. Who is eventually going to buy all of the assets the Fed has been buying? The Fed could always use our community to minimize their purchased inventory. How much of the US corporate debt should be rated as junk? Have the rating agency hyped the ratings of the high-risk bonds the Fed purchased? Is this a ticking time bomb?

Can the Fed liquidity solutions address insolvency? Pumping a tremendous amount of liquidity means we have to ask, where did this liquidity go? How many big screen TV’s did Walmart sell? How many new Robinhood accounts were opened?

US national debt could possibly climb to $30 trillion dollars by the end of the year. What are the limitations of the central bank stimulus?

The longer this virus and its various strains remain an unsolved crisis, the less likely government solutions will be effective.

 

The Fed’s Warning

5.20.20

Over 35 million people are unemployed, the market is up and the Fed has begun to issue warnings regarding investing.

The market has been moving up based upon the Fed’s actions. The Fed is not allowing a correction in the market and it has begun to purchase high grade bonds.

The markets are supposed to move up based upon fundamental data, not the Fed. The market is not having a corrective market cycle.

The Fed has been pumping in trillions of dollars to provide liquidity. The communication of the Fed has started to point out a miscommunication that the public may have regarding their policy of liquidity.

The markets are up because investor confidence is up. There is no implicit backstop for the equity markets. The economic slowdown is upon us and the Fed is probably not able to save the market. It is time for the retail investor to be cautious, careful. The stock market remains risky, and we need to recognize it. The Fed does not guarantee the investments of retail investors.

There is more risk in the market. It is time to practice proper allocation.

The sharp snap back of the market shows a divide between Wall Street and Main Street.

A one thousand point rise, a real big gain, a small biotech company saw some results of trials for the research and vaccine.

We may have to endure an epic recession, many have expected a downturn for some time. Could we see unemployment near 40-45%?

Rental and mortgage payments may become delinquent. How does a property owner manage to service debt? People will need a place to live.

Property owners should fill up properties where they are able. Clearly housing will not be offered at no charge. Mortgages may possibly receive a 12 month assistance of some sort.

Communicate with the lenders, offer them solutions, so take care of the lender, the property and the tenant. Just do not overleverage the debt. Now is not the time to exit the market. Are you undercapitalized?

Keep the investor informed.

When this crisis passes shopping malls may become converted to other purposes, possibly multi -purposed community centers and retail, mixed-use.. Retail has been troubled since the internet became a viable and somewhat of a trust venue.

The relationship with the lender is vital, stay in touch with the tenant, possible move a tenant to a smaller unit. Take care of the property, maintain the servicing of the property consistently.

Don’t become overleveraged.

Everyone is fearful. They fear the unknown, because they have lacked preparation. The Fed is stimulating the economy, throwing trillions of dollars at companies and individuals.

Every dollar the Fed creates minimizes each dollar we have in our wallets.

So where are the opportunities during an economic downturn. The virus has acted fast and its impact on any real estate transactions is immediate.

If prices have not adjusted to real market conditions then people are dreaming and wishing for the past.

Scared buyers means there are less buyers. Investors like to buy low. Now is not the time for rehabbers, not really a good market for fixers. People want a great deal for the margins. Rates are low, listings may attract opportunity. Some buyers may wait for prices to come down. Sellers a have to be motivated and this transcends markets, look for motivated and distressed sellers.

Cash flow after debt service will probably be a good investment. Rents usually do not go down, people losing their houses need a place to live so rents may remain stable.

Be ready to work with patient investors that may not be motivated, keep the lines of communications open.

Do we really have an idea how long this virus will last? Not really, because the flu and cold has a time limit, but this is a new strain, no one has a real idea how to control this.

China has seen recent resurge of the virus.

Question: am I able to keep my head? This may be a real time to build long-term wealth. Eyes downfield, expand and grow a business.

 

Release Number 8165-20

CFTC Division of Enforcement Issues Civil Monetary Penalty Guidance

https://www.cftc.gov/PressRoom/PressReleases/8165-20?utm_source=govdelivery

May 20, 2020

Washington, D.C. — The Commodity Futures Trading Commission today announced the Division of Enforcement has issued new guidance outlining factors the Division considers in recommending civil monetary penalties (CMPs) to the Commission to be imposed in CFTC enforcement actions. The guidance memorializes the existing practice within the Division and has been incorporated into the Division’s Enforcement Manual. This is the first Division CMP guidance issued publicly since the Commission published its penalty guidelines in 1994.

“This new guidance reflects my strong commitment to transparency and to the CFTC’s enforcement mission,” said CFTC Chairman Heath P. Tarbert, who in December announced additional efforts to promote transparency at the agency, including in enforcement actions. “Clarity about how our statutes and rules are applied is essential to deterring misconduct and maintaining market integrity.”

“An effective enforcement program must be tough on those who break the rules, but it must also be fair,” added Director of Enforcement James McDonald. “Transparency in our procedures, and in particular how we think about penalties, promotes fairness and enhances respect for the rule of law. Ultimately, we want our enforcement program to change behavior in a positive way. Explaining how and why we punish is a significant part of that effort.”

The staff guidance provides a three-pronged approach to evaluate the appropriate penalty to recommend to the Commission: (1) the “gravity of the violation;” (2) “mitigating and aggravating circumstances;” and (3) “other considerations.” In applying the various factors, staff will be guided by the overarching consideration of ensuring that any proposed penalty achieves the dual goals of specific and general deterrence.

Factors in considering the “gravity of the violation” may include the respondent’s role in the violations, the respondent’s state of mind, including whether the conduct was intentional or willful, and the nature and scope of any consequences flowing from the violations. Factors related to “mitigating and aggravating circumstances” may include the respondent’s conduct, such as self-reporting the misconduct, the extent of cooperation and remediation, or attempts to alleviate the violation by returning victim funds or improving a compliance program, or at the other end, any acts of concealment, obstruction, or prior misconduct. Among “other considerations,” the Division’s recommendation may take into account additional factors such as a timely settlement and remedies and sanctions to be imposed in parallel actions by other civil or criminal authorities or self-regulatory agencies.

Division of Enforcement staff members primarily responsible for this guidance are Margaret Aisenbrey, William Janulis, Edward Riccobene, Gretchen Lowe, and former staff member Matthew Rowland.

-CFTC-

 

Public Statements & Remarks

Opening Statement of Commissioner Brian Quintenz before the CFTC Global Markets Advisory Committee

https://www.cftc.gov/PressRoom/SpeechesTestimony/quintenzstatement051920?utm_source=govdelivery

May 19, 2020

Thank you Commissioner Stump for convening today’s meeting of the Global Markets Advisory Committee (GMAC).  I am looking forward to hearing presentations from Suyash Paliwal, the Director of the CFTC’s Office of International Affairs, on recent international coordination efforts in the time of COVID-19, as well as from the GMAC Subcommittee on Margin Requirements for Non-Cleared Swaps regarding its report and recommendations on the implementation of initial margin requirements for uncleared swaps. I would like to thank all of the presenters and Committee and Subcommittee members for their participation and engagement.

Implementation of Uncleared Margin Rules

We are now in the final implementation stages of the margin framework for uncleared swaps.  In 2019, one survey found that the 20 largest market participants, all phase-one firms, had collected approximately $173.2 billion of initial margin for their non-cleared derivatives transactions.[1] Collectively, market participants captured by phases 1-4 comprised approximately 89% of the total average aggregate notional amount of swaps across all phases, with the remaining phases of 5 and 6 comprising approximately 11% of notional amount, but representing approximately 94% of all entities brought into the uncleared margin regime.[2]  As we approach the compliance deadlines for phases 5 and 6, which will bring into scope a much larger and more diverse group of market participants, it is appropriate to reflect on how the uncleared margin regime can be improved to address some of the compliance challenges experienced in earlier stages. I am extremely interested to hear from the Subcommittee on Margin Requirements for Non-Cleared Swaps regarding their thoughts and recommendations.  In particular, I am looking forward to learning more about providing possible relief from initial margin calculations for small covered swap entities, providing compliance grace periods to allow firms time to establish the necessary custodian documentation after the initial margin threshold has been exceeded, and aligning the timing and methodology for the material swaps exposure calculation with the global Basel Committee on Banking Supervision (BCBS) and International Organization of Securities Commissions (IOSCO) framework.

I would also like to take a moment to acknowledge the BCBS-IOSCO recent amendments to the recommended margin framework to push out, respectively, the phase 5 and phase 6 compliance dates by one year.[3]  In light of the unprecedented economic and social impacts of COVID-19, I would support a one year delay for the final compliance phases.  Given the large number of firms brought into scope during phases 5 and 6 and the estimated 7,000 initial margin relationships that need to be negotiated, and the small overall percentage of swap activity these firms represent, it is important to implement these final phases in the most productive, least burdensome way. Under these difficult circumstances, I think it is appropriate to provide firms with additional time to comply, ensuring that their already strained resources are not diverted from ongoing business continuity efforts.

In closing, I would like to reiterate my thanks to all of today’s presenters and the GMAC membership for their participation, as well as to Commissioner Stump for organizing this meeting.

[1]     ISDA Margin Survey Year-End 2019 (April 2020), https://www.isda.org/a/1F7TE/ISDA-Margin-Survey-Year-end-2019.pdf.

[2]     See Initial Margin Phase 5 Report of the CFTC’s Office of the Chief Economist (Oct. 24, 2018), at 4‐5, http://www.cftc.gov/sites/default/files/About/Economic%20Analysis/Initial%20Margin%20Phase%205%20v5_ada.pdf.

[3]     See Basel Committee on Banking Supervision and Board of the International Organization of Securities Commissions, Margin Requirements for Non‐Centrally Cleared Derivatives (Apr. 2020), available at https://www.iosco.org/library/pubdocs/pdf/IOSCOPD651.pdf.

-CFTC-

 

Public Statements & Remarks

Introductory Statement of Commissioner Dawn Stump before the Global Markets Advisory Committee Meeting

https://www.cftc.gov/PressRoom/SpeechesTestimony/stumpstatement051920?utm_source=govdelivery

May 19, 2020

Good morning and welcome to the first Global Markets Advisory Committee (GMAC) meeting of 2020.

I would like to begin by acknowledging that this meeting looks much different than I envisioned even a few short months ago.  While we are not in the same room today, I’m grateful that we can hold this meeting and move forward with the GMAC’s priorities in a format that ensures the health and safety of GMAC members, Commission staff and the public.

I would like to thank Chairman Tarbert and my fellow Commissioners for attending today’s meeting and for your contributions to the discussion.  I would also like to thank the GMAC members who are in attendance and who will no doubt engage in a robust discussion of today’s presentations.  In addition, I would like to thank today’s presenters, Mr. Suyash Paliwal and Ms. Wendy Yun.  Finally, I would like to thank Andrée Goldsmith, the GMAC Designated Federal Officer, for organizing today’s meeting and Chair Angie Karna for her leadership of the GMAC.

Today’s meeting will feature two presentations.  The first, from Suyash Paliwal, Director of the CFTC’s Office of International Affairs, will focus on coordination efforts among the international regulatory community in the face of recent market events.  As we are all aware, the COVID-19 pandemic has affected economies all over the globe, and Mr. Paliwal and his team have been key players in engaging with international coordination efforts during this unprecedented period of market volatility.  The international regulatory community has come together to address the challenges caused by the global pandemic and the CFTC has played a leadership role in those endeavors.

Next, we will turn to the work of the GMAC Subcommittee on Margin Requirements for Non-Cleared Swaps.  Following the last GMAC meeting in September, during which the GMAC heard several presentations on the unique challenges posed by the later implementation phases of margin requirements for non-cleared swaps, the Commission established the Subcommittee.  In our public solicitation for Subcommittee nominations it became obvious that the interest in this matter is vast and the viewpoints are many.  It is therefore remarkable that such a diverse group of representatives was able to deliver a report to the Committee in a relatively compressed timeframe, further complicated by an unprecedented global pandemic.  The Subcommittee’s mandate was to examine the implementation of margin requirements for non-cleared swaps, to identify challenges associated with forthcoming implementation phases, and to recommend actions the Commission may take to mitigate any challenges identified.

The Subcommittee took that mandate and ran with it.  In just a few short months, the Subcommittee has prepared a detailed report outlining several challenges posed by the upcoming implementation phases of margin requirements for non-cleared swaps, and recommending a number of specific potential actions to mitigate these challenges.  The Subcommittee continued its hard work even as its members were responding to recent market events, and the timing of margin requirements was evolving within the Basel Committee on Banking Supervision and International Organization of Securities Commissions.

In short, the effort to get this report before the Committee today was no small task, and I know the full GMAC has carefully considered its content.  I want to thank Warren Gorelick and Carmen Moncada-Terry from the Division of Swap Dealer and Intermediary Oversight for their engagement with the Subcommittee.  I also want to offer appreciation to each member of the Subcommittee, and especially Subcommittee Chair Wendy Yun, for your hard work.  I’m so pleased that many of you could attend this meeting today.  I look forward to hearing the presentation.

-CFTC-

RELATED LINKS

Event: CFTC’s Global Markets Advisory Committee to Meet on May 19

 

Covid 19

5.14.20

Oil output will be decreased by about nine million barrels through June ’20, that’s about 10% of overall global supply. Covid19 has impacted near term demand and resulting in an oversupply, resulting in demand destruction.

Public health experts are worried about the US re-opening. Warehouses are worried about safety and the lack of safety without personal protection equipment. Many are worried that there is not enough being done to protect the employees for the projected return. The demand is for more personal protection from many industries.

What about sporting events? Racing may come back by the mid to end of May. State parks may re-open where there is minimal contact with other park visitors. Golf courses may allow people to slowly come back where there are measures taken to keep playing groups small. Social distancing with others is a priority.

The US government is considering actions against China for the lack of transparency and containment related to the Covid 19 virus outbreak. Retaliation appears to be ahead of us, tariffs for China may be a real possibility.

The US has created over six trillion dollars over the past six+ weeks and interest rates are almost at zero.

The possibility of raising interest rates will probably be zero. These Fed possibilities could create severe consequences. Negative oil prices and unemployment is at 30%, this is wild and crazy. In one month six years of jobs creation was wiped out.

Cash in reserves is important, an extensive cash for emergencies. Savers may prefer to own gold, and gold may rise because of extreme consequences.

Gold tends to holds its value and act as a protection of other assets, gold prices may even rise to new highs.

We may be headed to a soft prolonged economic activity. We appear to be in a fundamental bear market. A possible period of stagflation, demand will stabilize, more inflation in front of us.

Health care will become a growing concern and focus, investments will probably pick up in these areas.

The virus caught the globe unprepared, a black swan event, an unprecedented shock, and the public will be far more ready in the fall of this year and beyond. Second waves do occur with viruses.

After a return to some normal, there may be a flood of houses on the market, massive economic implications. Many may up and move to Central or South America where living expenses are reasonable. Frugality is now king.

Is it legal for the Fed to purchase commercial paper, investment grade bonds and possibly other assets?

The Fed I going to buy junk bonds. Unlimited assets and the markets are rebounding to some degree. They will probably purchase high and low rated debts. The Fed controls the interest rate. Buying corporate junk bonds, so the market started buying, he Fed signaled that they did, but they did not.

The Fed used a SPV, and this is the real buyer after all. This special purpose vehicle will buy junk bonds. These listed companies are broke. These companies are taking on more debt. They cannot even pay their debt. The stock prices are artificially inflated. Look at the recent announcements of larger retailers filing for bankruptcy. There is no real price discovery because of the actions of the Fed.

Investors have to find other assets to purchase.

Risky asset investors are benefitting, but small main street businesses are not.

Jobless claims now tally over 30 million people in the US, which is historic. The recovery looks to be slow. Hopefully most American will be rehired.

New York may have been the primary source in the US for the virus to spreads.

The Fed balance sheet is the largest on the planet.

 

Unlimited money printing, QE to infinity.

4.30.20

The Fed continued to print trillions of dollars. Since the central banks are doing all of this printing of money we are now seeing inflation creating inflation, and low interest rates.

Gas prices have gone down, food prices have also increased and the value of the dollar is also going down.

Smart money is fleeing the purchasing of bonds. Banks deposits are earning minimal interest. Investors are turning to gold, which is a safe way to store value.

Dollar-backed stablecoins (reserved-backed) are a means to retain value when the dollar decreases in value. Stablecoins are like a bearer instrument, and easily transferable without third-party intermediaries, P2P, and it may be moved globally. Counter-party risk remains.

Legally the cash a person has in the bank does not belong to that individual.

Most stablecoins have transparency, and are fully reserved. When loaning stablecoins an individual can earn interest on them. Stablecoins are not backed by the FDIC.

We may be at a turning point for non-crypto businesses in using digital currency. Cash usage is being minimized. Negative interest rates is happening, the consumer is now paying for the borrower to borrow.

If all money is digital, there is no way to way to extract it out of the system. A run on a bank or a bail-in cannot happen. All money is created through debt. Banks need to have reserves in the fractional reserve system. With negative rates bank margins will remain low, larger banks will engage in additional financial speculation. There will be a further consolidation of small retail banks, which is the backbone of the economy, will be on the horizon.

The small banks lose out to the big banks, and the big banks lose out to the central banks.

Unemployment numbers has again risen. Maybe they are worse than being reported possibly up to 35-40 million Americans are unemployed. Consumers are falling behind on credit card and auto debt. Home prices are projected to lose possibly over 20% in value.

The macro environment is getting worse and uncertainty has increased.

Again the Fed has rates near zero, they want inflation to return. The Fed will expand the scope of its Main Street lending program. Oil and gas companies may get assistance. These are loans, not grants, they must be paid back.

The ECB holds rates steady, unchanged and may use other tools to address solvency challenges.

Big Oil, Has the End Arrived?

Big oil has seen a dramatic dropped in prices, actually below zero. What will happen as we go forward for oil? The word of the year is ‘unprecedented’ and it is only April. The supply is huge, the demand has fallen out of the market. The futures market has crashed for oil. Oil wells will probably shut down, future extraction efforts might be in jeopardy. Oil storage for crude oil has been minimized. Shelter in place could be in effect into mid-May. Oil wells simply do not have a on and off switch.

Pandemic happens in waves. We may not be able to return to the normal activities prior to the virus. A secondary wave may create additional crashes in oil, suppression in prices and causing problems and minimizing stability. Long term effects are hard to understand, the demand will be unpredictable.

Google has an app to challenge Zoom. Long term changes are here and so is the electric car, and so are more home offices and workers will not have to commute as much.

The shape of this projected slowdown and recovery is a significant drop, we may possible have to endure a flat or modestly elongated upturn.

The stock market is forward looking, this downturn has acted very quickly, investors may be ahead of themselves. It all appears to be based on hope, not accurate nor realistic growth numbers.

Markets may move lower and we must be reminded of Covid-19, depressed oil prices, social distancing, fixed income market seems to be expensive.

 

The housing market will face a sever challenge.

The corona virus is slowing down the longest economic expansion, spawned by a global health crisis. Some economists are projecting up to 15% unemployment. Hotels have laid-off many employees, conventions have been cancelled. Some manufacturing and service companies have slowed, people are staying at home. Restaurant reservations have declined. Since people are at home demand has slowed. Oil is at its lowest level of demand in almost two decades. Consumer spending is two thirds of the economy.

Maybe earnings will improve the second half of the year. Recovery of some sort may start the late part of 2020. Interest rates may decline in2021. Consumer spending activities after the virus passes is still unpredictable.

All of our lives are going to change in the next six months. We may see massive waves of evictions, jobs losses are accelerating, and there may be home and vehicle sales collapse. Some states are placing moratoriums on foreclosures and evictions. Pain will be on both sides of the renter and landlords. Utilities may be shut off and fees will probably be required to reestablish those disconnected utilities.

Consumers need to minimize unnecessary spending.

Housing pricing may decline for a longer period, slowing down throughout the balance of 2020. In 2021 we may possibly see real estate prices might remain flat in 2021.

2008 taught us that homeowners took out massive debt on their primary residences. The virus would minimize appraisers going to the properties. What would happen to values?

Now is a turbulent time to buy new construction.

The housing bubble is changing all of the time. Nearly two million have filed for forbearance to date. The number of borrowers asking for forbearance will probably continue to rise.

Unemployment filers are now over 15 million individuals. Change is happening, second and third wave of unemployment is happening, particularly those that have with better paying jobs, white collar and other professionals. The virus does not discriminate.

Theme parks have been closed since March 2020, it may be difficult to determine when they may reopen. The hotels, restaurants, shops and other attractions around the theme parks will struggle.

The way a buyer buys a property is changing. Homes are being delisted and others are coming on the market with reduced prices. Many borrowers at this time are not qualifying for the loans to buy the properties.

Unemployment may lead to a forbearance surge. Economic uncertainty is impacting the market. The buying power of the prospective home buyer will be dictated by rates. The buying power will slow down.

Housing pricing has not dropped immediately, the effect of the virus and unemployment is still unfolding. When real estate markets collapse lenders tighten up lending standards. Opens houses are not being held.

We may see a few bank failures. It may very well be a moral hazard to bailout Wall Street directly or through the back door with the purchase of mortgage back securities. Loose lending causes inflation.

The nation has exploding debt, deficits will continue to expand.. The debt market has inflating the housing market, and the stock market. The Fed is a buyer of debt and their balance sheet is now over five trillion dollars. Their actions are intended to keep credit markets running smoothly.

The debt market is a time bomb. Holding hard assets may be beneficial.

Getting the biology under control with testing and therapeutics and the economy can begin again, and it may become a speedy recovery.

The human cost of the pandemic is climbing, and the focus must be upon keeping the workers afloat.

 

The corona virus is a catastrophic tragedy that is upon the world.

A rare disaster, the corona virus, is a crisis like no other. Substantial uncertainty remains of its total impact. It is challenging to predict its full impact across the globe. This lockdown has us unsure of the economic picture at this time and what follows after the pandemic recedes. The ‘Great Lockdown’ spars no country. This recession may well be the worst recession since than the Great Depression. Global growth is almost certain will fall.

All countries are experiencing the crisis in different ways and the speed of this crisis is unlike anything we have seen before. Countries are facing a health care and financial crisis, and trade is probably going to affect a collapse in commodities prices.

Global growth should fall this year, it could be worse than the financial crisis in 2008.The cumulative financial losses could possibly be greater than eight trillion dollars across the globe.

Emerging markets will endure with weaker health care systems.

The pandemic may not recede by the end of this year. Persistent economic scars may remain, there may be wide spread bankruptcies, extended job losses. The pandemic may be slow in receding, possibly into 2021, if so economic activity will continue to be reduced.

The lockdowns help flatten the spread of the virus.

People still need to meet their basic needs. The recovery phase will require a collaborative effort, a moratorium on debt repayments, grants and debt relief are also needed. Debt service relief to poorer countries is required from creditors, financial institutions. The response needs to be large and rapid.

Some countries have had success with social distancing. What really comes next is uncertainty. Are there higher taxes on the horizon?

Timely action is required by the governments, and debt restructurings are required. Low interest rates will contribute to bringing debt down. An economic recovery is projected in 2021.

New therapeutics may arrive to help the recovery and the economy. After the pandemic passes a stimulus may have to happen amongst advanced economies.

Travel and hospitality has impacted poorer countries, and they have taken an economic hit. After the pandemic passes these countries can improve, these poorer nations may move toward using cash transfers and digital payments. Debt service relief is required for poorer countries.

The severity of the pandemic has also slowed the economic activity in the EU. The EU is open to economic trade, and many EU countries rely on tourism. Growth potential for the EU calls for countries to spend in the health care sectors. ECB is keeping borrow costs low, and after recovery, the debt levels should come down.

The UK, the Treasury and the BOE, have been rather aggressive with targeted measures helping farming.

With a collapse in the demand, oil price collapse has benefitted the consumer. The price of oil is below pre-virus. Weakness in prices, means lower revenues, and a slower growth for oil producing countries.

Regarding the US, growth may contract by 4-5% in 2020. Economic activity will be below pre-crisis, a deep recession, solvency issues, and unemployment will go up dramatically.

Brazil has been hit by collapsing commodities, extreme uncertainty. For countries like Brazil, the priority is to deal with the crisis.

Social assisting programs may need to be broadened, making them more unconditional. The objective should be to minimize persistent economic scars.

Global cooperation is important and global restrictions on health care supplies will be detrimental, slowing the recovery.

 

The financial crisis has taught financial institutions and people that none of us are ready for any crisis at any time.

Mortgages, people are struggling, unemployment claims have increased, a possible historical mark.  Lenders will raise borrowing standards, trying to stem the risk. If homeowners are unable to service their mortgage after four to six months there could be a serious amount of bankruptcies on the horizon. How will this affect the derivatives market? Will the mortgage servicing companies have the capital to cover the payments?

Mortgage lenders are experiencing delays in the processing of mortgages. Lenders are aware unemployment risk is going up and defaults would increase. Housing prices may collapse. It really is all connected.

Mortgages lenders have increased the interest rates for home loans; maybe they will lower rates as the situation unfolds. Mortgage investors want higher returns for the risk they are taking; maybe that is the reason mortgage rates are remaining high to borrowers. Down payments to get a home loan will probably increase.

Banks tend to get stressed during an economic challenge like in a coming recession. Banks shift gears in order to respond during sever economic slowdowns. So the recession is probably here right now. Borrowers lose jobs and homes lose values. Banking staff is probably working at home, banks are pairing down. Any threat to a homeowner’s income will need for them to conserve in their spending.

Evictions will likely increase. Family living conditions will probably double up. Housing supply will be driven up.

Refinancing requests have jumped at the end of March ’20.

Should buyers wait or jump in to purchase a house? Always understand the market in which must be dealt with.

So what is good about today’s market? The post-war boom expanded substantially. Both the money supply and debt creation has expanded.  A correction appears inevitable. Currently real estate agents are not showing houses maybe they could enhance their offerings with virtual tours.

Travel is down. New homes sales have slowed. New home buyers are not going to see houses. It is possible we may see unemployment over 25%. It just seems like a sever crash could be in front of us.

The later part of the Boomers generation is retiring, their goal would be to downsize. The qualified buyers probably are unable to buy houses from Boomers. This recovery may be different from previous upturns because the potential buyers may simply not be qualified.

There could be pockets that do well, like rental that are well maintained.

The Fed adds to the huge pile of debt for us all through unlimited QE. The Federal Reserve purchasing of financial assets is distorting the markets, because the Fed is buying a wide variety of assets with created money. The Fed should consider letting failing companies fail. Unlevered companies lower prices. So allowing the bankruptcy process take place and new management comes in with new ideas. More responsible players come in. None of the QE, and stimulus is free. Which may lead to more inflation.

OPEC and allies have made an agreement for a cut in production. These cuts will begin on May 1st through the end of June 2020. Demand is now low, and oil cuts will then increase the demand while the storage is minimized, often just sitting on tankers.

This could be the worst jobs markets for college graduates since the financial crisis of ’08. The recruiters are cancelling college visits. How will this student debt be serviced? The lenders will feel the ripple effect.

 

JZZ TECHNOLOGIES ANNOUNCES THE ACQUISITION OF SENIOR LIFESTYLE MEDIA

https://otcprwire.com/2020/04/13/jzz-technologies-announces-the-acquisition-of-senior-lifestyle-media/

NEWS VIA: OTC PR Wire

Posted: April 13, 2020

In: BlockchainNewsroomTech

Calverton, New York, April 13, 2020- JZZ Technologies, Inc. (OTC PINK: JZZI) Today reported it has completed the acquisition of Senior Lifestyle Media, LLC.

“This acquisition will give us amazing content for the rapidly growing senior market, plus an established audience for our new AxiSenior project” Said company spokesman and Chairman, Charles Cardona.

Senior Lifestyle Media publishes Active Lifestyle Magazine and Family Caregiver Magazine as well as provides a number of products and services for the senior and caregiver markets. In addition, it is the founder and major sponsor of The Caregiver Resource Network, a 501(c)3 not for profit. The magazines are produced as digital content and print editions for the senior marketplace.

The senior market is one of the fastest growing demographics in the United States and controls the majority of the wealth in the country. The 55+ group is one of the most sought after markets, which controls a large portion of the over $100 Trillion in assets held by US households.

“We are pleased to be joining such a great organization, this will increase our access to millions of seniors as AxiSenior builds it’s audience.” said Rob Rosen, President and founder of Senior Lifestyle Media, “We strive to entertain and inform seniors with editorial content that’s relevant to their active lifestyles”.

JZZ Technologies intends to integrate the Senior Lifestyle Media publications, audiences, content, and brands into it’s AxiSenior project. By growing a larger audience they plan to increase advertising and other associated revenues. AxiSenior will also incorporate various discount and incentive programs as well as additional products and services aimed at the senior marketplace.

Certain statements contained herein are “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.

Contacts:
JZZ Technologies, Inc.
Charles Cardona
sailchaz@gmail.com
www.jzzi.net

AxiSeniorDigitalMarketingJZZIJZZTechnologiesMarketing,

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HUMAN UNITEC INTERNATIONAL INC. (HMNU) MANAGEMENT UPDATE REGARDING GRONE AND ECOSMART

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/04/13/human-unitec-international-inc-hmnu-management-update-regarding-grone-and-ecosmart/

Posted: April 13, 2020

In: NewsroomRenovable Energy

Miami Beach, Florida, April 13, 2020 -Human Unitec International Inc., (OTC PINK: HMNU) (HMNU) (The Company), is an International Project Financing, Development, and Asset Management Corporation specializes in medical and wellness projects, renewable and recycling, alternative energy and emerging growth companies (Green Energy). www.hmnuinc.com and www.humanunitecinternational.com.

Since February 2016, HMNU has been developing the project for the construction of a patented technology GRONE System. In January 2020, the Company began advanced negotiations to finance and deploy three recycling centers in Saudi Arabia.

On June 22, 2019, the Company acquired the exclusive ECOSMART distribution and technology rights for United States and Canada. ECOSMART is a green antipollution device which reduces the emission of Co2 and the consumption of diesel and gasoline of vehicles and marine engines.

ECOSMART is an ECOLOGICAL Device ad alto energy yield in the versions CEP (Car Eco Power) SEP (Sea Eco Power) HEP (Home Eco Power), patent of Industrial invention number 10218000010819, which will allow the drastic reduction of the polluting emissions of motor vehicles, CEP, SEP, HEP devices are producing a detonating mixture obtained from the electrolysis- resonance decomposition of the appropriately adjusted water through variable electromagnetic fields. CEP, SEP, HEP are generating an cological device that allows to achieve a complete combustion and an increase in specific power and therefore a relative increase in energy efficiency thanks to the presence of the atomic hydrogen component (hydro), oxygen and OH ions resulting in reduced emissions in dynamic (automotive and nautical) and stationary applications (civil applications) with internal combustion (endothermic engines) on both the first plant and revamping after market.

ECOSMART has completed with success its technology in both vehicles and marine engines and the devices are now ready for commercialization. HMNU and the engineering team ECOSMART are looking forward to its partnership to market the devices in Europe with HMNU’s Italian subsidiary FERDY CAR.
In December 2019, Human Unitec International Inc. completed the acquisition of FERDY CAR. In the fiscal year ending in 2019, Ferdy Car s.r.l. reported over $6.500.000,00 in revenues. www.ferdycar.it

The management is completing its search for a PCAOB accounting firm for both its US and International operations and will be filing current filings and legal opinion letter with OTC Markets.

Shareholders are invited to follow our company on our official twitter account at: https://twitter.com/HMNU_1.

Human Unitec International Inc.
767 Arthur Godfrey Road
Miami Beach
FL 33140
Contact: Telephone (917) 821-9585
Email: Hmnu@gmail.com
https://twitter.com/HMNU_1.
www.hmnuinc.com
www.humanunitecinternational.com.

Forward-looking statements
This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of Human Unitec International Inc., (HMNU), a startup company, and certain of the plans and objectives of HMNU with respect to these items. Examples of forward-looking statements include statements made about our strategy, estimates of sales growth, future EBITA and future developments in our organic business. Forward-looking statements can be identified generally as those containing words such as “anticipates”, “assumes”, “believes”, “estimates”, “expects”, “should”, “will”, “will likely result”, “forecast”, “outlook”, “projects”, “may” or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

These factors include, but are not limited to, domestic and global economic and business conditions, the successful implementation of our strategy and our ability to realize the benefits of this strategy, our ability to develop and market new products, changes in legislation, legal claims, changes in exchange and interest rates, changes in tax rates, pension costs and actuarial assumptions, raw materials and employee costs, our ability to identify and complete successful acquisitions and to integrate those acquisitions into our business, our ability to successfully exit certain businesses or restructure our operations, the rate of technological changes, political, economic and other developments in countries where HMNU operates, industry consolidation and competition. As a result, HMNU actual future results may differ materially from the plans, goals and expectations set forth in such forward-looking statements.

EcoPowerEcosmartFloridaHMNUHumanUnitedInternational,

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PressReleaseRecyclingRenewable

 

The central banks are continuing to print to no end.

Gold will probably be on the rise for the next several years, becoming more attractive.

We are talking multi-trillions. No limits to the amount of money they will print. It is just electronic printing, adding to the debt book, with no limits.

They will buy treasury bonds, money market accounts, corporate bonds, ETF’s, student loans and credit cards.

This is a significant period of uncertainty. Investors move to cash. The Treasury is considering providing loans to small businesses. This is called a moral hazard.

The country is going into deep debt.

The virus was not the initiator of this economic downturn, but it did accelerate these economic problems.

Trillions of dollars is being created out of thin air and being thrown at the economic problems. This is a health and financial crisis because businesses are being shut down. This economy has been highly leveraged. The consumer and business savings has been avoided.

The Fed is bailing out banks, GSE’s, and individuals. Helicopter money to businesses, individuals, and so consumer prices are going to increase. This is the most expensive way to pay for government is to pay for government. Through inflation we are going to be stuck with the bill. We are going to have to pay for this stimulus money.

Many are converting dollars into hard assets. This virus and economic downturn and the debt bubble is devastating the system. Businesses were not able to fail. This house of cards is collapsing. This is the end game. The Fed is the buyer of last resort.

There is unlikely to be an economic recovery. The action of the government will delay any recovery and deepen the downturn. Failing businesses should be allowed to fail. A free market will sink failing businesses. Yet the government wants to save all, and they will have to been subsidized endlessly. We have never been here before.

Prices should be going way up, there may be price controls. Goods may be rationed. Gold has always been a monetary anchor. Real growth will probably take place outside the US because they will not be supporting the US consumer to the extent they have in the past.

This bailout is not free nor is it fair because someone has to pay for all of this stimulus and past debt. Bailouts have a cost. The prudent ones will bailout the reckless. So the riskier investments are then protected. It is healthier when businesses are allowed to fail, without a government back stop, and new entrepreneurs will come forth.

It is now easier to let businesses fail, now is not the time to make excuses for those that took reckless decisions. Can you say private equity investors?

The cost of government is the spending. The economy will need to maintain this effort to save risk takers.

The national debt is over $23 Trillion and exploding. Will the Fed print the money until it is worthless? The economy will not be considered normal.

Unemployment is at 15 million plus in the last three weeks.

RESGREEN GROUP INTERNATIONAL (RGGI) SECURES SPACE FOR LIVE DEMONSTRATIONS OF NEW AUTONOMOUS MOBILE ROBOT

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/04/09/resgreen-group-international-rggi-secures-space-for-live-demonstrations-of-new-autonomous-mobile-robot/

Posted: April 9, 2020

In: NewsroomTech

Elkhart, Indiana, April 9, 2020-ResGreen Group (OTC PINK: RGGI) CEO Parashar (Parsh) Patel announced today that he has secured 5,000 square feet of space needed to give live demonstrations to buyers of the New Autonomous Mobile Robot (AMR). The space located at 14614 East 9 Mile Road Eastpointe, MI 48021 is needed to show off the capability of the sophisticated AMR in real time.

Patel stated, “I am very excited to discuss the progress of the AMR prototype. Work on the AMR commenced on the first of March and has progressed along very well. We are on track to launch the AMR in early to mid-summer and with this new space prepares the way for the live demonstrations of the AMR. We will be able to set up different scenarios to give real life examples of the programmability and detailed maneuvering capabilities.

Patel continued, “As I mentioned before the fundamental difference between AGVs and AMRs can be summed up by the difference noted between a guided vehicle and a robot. A guided vehicle follows fixed routes, usually along wires or magnets embedded in the ground — not unlike the difference between a train and an automobile. An AGV robot is probably clever enough to use simple sensors in order to avoid hitting obstacles that pop up in its way, but it’s not clever enough to go around them. In fact, AGVs aren’t clever at all — without much on-board intelligence, they can only obey simple orders. This means that AGV robots tend to get into trouble when anything isn’t exactly the way they like it. This is in addition to their notorious reputation when it comes to adapting to change. If you want them to expand their work area, for example, it’s an expensive and time-consuming hassle.

A robotic AMR is much more sophisticated. It’s packed with sensors and powerful on-board computers that help it to understand its operating environment.

An AMR is much more sophisticated. It’s packed with sensors and powerful on-board computers that help it to understand its operating environment. Rather than being restricted to fixed routes, an AMR can instead navigate dynamically using a map, allowing it to plan its own paths and travel quickly and efficiently. AMRs are smart enough to recognize and react to people, cars, forklifts, and more. They safely perform their jobs no matter how busy the surrounding environment and can even do futuristic things like following a specific person wherever they need to go, mother duck-like.”

“Please visit our new and exciting website at http://resgreenint.com/ to stay informed of our progress and industry updates”, Patel concluded.

The overall robotic industry is expected to grow from USD 2.0 billion in 2019 to USD 2.9 billion by 2024 at a CAGR of 7.8%. More information can be found at:

https://www.marketsandmarkets.com/Market-Reports/automated-guided-vehicle-market-27462395.html?gclid=CjwKCAiA3uDwBRBFEiwA1VsajA37Sm51oAOKal2ptATWn0Dvzzpqmw0VloUrbN1BiKihtFADkrwxxBoCVuIQAvD_BwE

ABOUT RESGREEN GROUP INTERNATIONAL, INC.:
RGGI is using certain Know-how and Intellectual Property (IP) that it possesses and looks to acquire and develop components for material handling logistics and certain Automatic Guided Vehicles (AGV) and mobile technologies.
RGGI’s highly skilled engineers have years of professional engineering experience in this space and plans to remain focused and highly motivated to execute on its business strategy to develop certain Autonomous Mobile Robots (AMR).

Safe Harbor:
This press release contains statements, which may constitute “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of ResGreen Group International Inc. with members of its management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully and the ability to complete before-mentioned transactions. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

Contact:
ResGreen Group International, Inc.
Parashar (Parsh) Patel, President and CEO
Email: info@resgreenint.com

AGVAMRAutomaticGuidedVehiclesAutonomousMobileRobot,

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ResGreenGroupRGGI

 

SUN KISSED TO ACQUIRE LEADING DIGITAL MARKETING AND MONETIZATION PLATFORM LED BY INDUSTRY STAR ROBERT REYNOLDS

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/04/09/sun-kissed-to-acquire-leading-digital-marketing-and-monetization-platform-led-by-industry-star-robert-reynolds/

Posted: April 9, 2020

In: BlockchainCryptocurrencyHEMPNewsroomTech

NEW YORK, April 9, 2020 – Sun Kissed Industries Inc. (OTC PINK: SKDI) (“Sun Kissed”, “SKDI”, or the “Company”), an emerging leader in the CBD Food and Beverage marketplace, and NuMuni Inc. (“NuMuni”), a monetization platform developed for digital media publishers, software providers, and online games (together, the “Parties”), are excited to announce the signing of a Letter of Intent (the “LOI”) whereby Sun Kissed will acquire one hundred percent ownership of NuMuni https://numuni.io .

Management notes that Robert Reynolds, the founder and CEO of NuMuni, is a top innovator in the advertising based virtual currency monetization industry, which has grown to generate billions of dollars per year. Reynolds’ prior endeavor, CPALead, was the 40th fastest growing private company in the US, eventually becoming the largest incentive-based advertising marketplace in the world, serving ads to over one billion people worldwide and generating over $100 million in sales.

Robert Reynold – CEO & Founder of Numuni, Inc.

NuMuni, a top innovator in the advertising based virtual currency monetization industry

“Robert is a visionary at the cutting-edge in the fintech and digital marketing space and we believe NuMuni will be a game-changing piece of the puzzle for Sun Kissed. Our strategy is to build a company around talented individuals with game changing assets. We started with Ilan Freeman from Hakuna who is an award winning CEO and now we add to that Robert Reynolds. With their sage advice, we will continue to aggressively chase down the joint venture and acquisition opportunities that the current economic climate has offered up to us” noted Carl Grant, CEO of Sun Kissed.

Numuni is a powerful monetization platform developed for digital media publishers, software providers, and online games. It enables the privacy-friendly monetization of users’ spare computer processing power, incentivizing participation through premium digital media content distribution. NuMuni is a revolutionary solution to the increasing impotence of traditional digital advertising strategies. Freed resources are pooled to form a distributed supercomputer that can mine cryptocurrency, run scientific simulations, train AIs, perform 3D rendering, and undertake many more tasks.

Sun Kissed also recently completed the acquisition of Products Group Inc, DBA/ Hakuna (“Hakuna”), a leading CBD-based products company with a nationwide distribution footprint spanning more than 20 US states. Management strongly believes the acquisition of NuMuni will present enormous synergies with its Hakuna strategy given the critical role that online and retail marketing will play in developing the value of the Hakuna brand in the quarters ahead.

Hakuna CEO, Ilan Freeman commented, “Robert Reynolds is a rock star, and the machine he has built in NuMuni is going to make our job a lot easier. I’m extremely pleased to bring NuMuni into the equation and I look forward to joining the NuMuni board.”

About Sun Kissed Industries, Inc.:
Sun Kissed Industries Inc. (OTC PINK: SKDI) is an emerging leader in the CBD-based products marketplace. The Company is pursuing meaningful acquisitions as part of an aggressive M&A strategy designed to position Sun Kissed as a dominant player in a well-defined, high-growth niche within the rapidly expanding CBD sector.

FORWARD-LOOKING STATEMENTS:

This press release may contain forward-looking statements, including information about management’s view of Sun Kissed Industries Inc.’s future expectations, plans and prospects. In particular, when used in the preceding discussion, the words “believes,” “expects,” “intends,” “plans,” “anticipates,” or “may,” and similar conditional expressions are intended to identify forward-looking statements. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of Sun Kissed, its subsidiaries and concepts to be materially different than those expressed or implied in such statements. Unknown or unpredictable factors also could have material adverse effects on Sun Kissed’s future results. The forward-looking statements included in this press release are made only as of the date hereof. Sun Kissed cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Sun Kissed undertakes no obligation to update these statements after the date of this release, except as required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for by Sun Kissed.

SOURCE: Sun Kissed Industries Inc.

Contact:
Target Marketing Agency
112 E 25th Street
New York, New York 10010
917-983-2268

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News Release

April 08, 2020

https://www.finra.org/media-center/newsreleases/2020/finra-statement-secs-ocie-risk-alerts-reg-bi-and-form-crs

Michelle Ong, (202) 728-8464

FINRA Statement on SEC’s OCIE Risk Alerts for Reg BI and Form CRS

On April 7, 2020, the SEC’s Office of Compliance Inspections and Examinations (OCIE) released Risk Alerts for Reg BI and Form CRS.  These Risk Alerts set forth OCIE’s expectations for firms’ compliance with Reg BI and Form CRS and provide broker-dealers with information about the scope and content of OCIE’s initial examinations following the compliance date of June 30, 2020.  FINRA will take the same approach as set forth in the SEC Risk Alerts when FINRA examines broker-dealers and their associated persons for compliance with Reg BI and Form CRS.  This initial approach will focus primarily on assessing whether firms have made a good faith effort to establish and implement policies and procedures reasonably designed to comply with Reg BI and Form CRS.  However, as always, FINRA will take action in the event FINRA observes indications of customer harm or conduct that would have violated current standards (e.g., suitability).

We also emphasize that we stand ready to work with firms and the SEC on issues that may arise in the course of examinations for compliance with Reg BI and Form CRS and understand that the coronavirus disease (COVID-19) has created challenges for firms.  As with the SEC, we appreciate that implementation will be an iterative process, and our focus will be on firms continuing good faith and reasonable efforts, including taking into account firm-specific effects from disruptions caused by COVID-19.

 

TWO HANDS CORPORATION ENTERS INTO APPLICATION DEVELOPMENT AGREEMENT

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/04/08/two-hands-corporation-enters-into-application-development-agreement/

Posted: April 8, 2020

In: NewsroomTech

Toronto, Ontario, April 8, 2020 — Two Hands Corporation, (OTC PINK: TWOH) a leading custom application development company, has entered into a custom application development agreement.

The company started work on a new Online Grocery Delivery application that will aid our client with their product distribution and order processing. We’ve diversified to meet new demand for online delivery due to the current Pandemic.

About Two Hands Corporation
Two Hands Corporation is a custom application development company with proven numerous technological competencies in digital technologies. The company delivers diversified and top-quality solutions to companies in North America. Please visit our website at www.twohandsgroup.com

This press release contains forward-looking statements that involve a number of risks and uncertainties. Any statement not regarding a historical fact is a forward-looking statement. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, the company’s ability to finance its planned expansion efforts; the company’s ability to raise funds on acceptable terms; the company’s ability to successfully adapt its business model and such other risks disclosed from time to time in the company’s reports filed with the securities and exchange commission including those on the company’s annual report on form 10-K. The company does not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in management’s expectations, except as required by law.

CONTACT:

Two Hands Corporation
IR@twohandsapp.com
www.twohandsgroup.com

SOURCE: Two Hands Corporation

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TWOHTwoHandsCorporation

 

SUN KISSED INDUSTRIES CLEANS BALANCE SHEET WITH $242,595 OF DEBT FORGIVENESS

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/04/07/sun-kissed-industries-cleans-balance-sheet-with-242595-of-debt-forgiveness/

Posted: April 7, 2020

In: CBDHEMPMarijuanaNewsroom

NEW YORK, April 7th, 2020 – Sun Kissed Industries Inc. (OTC PINK: SKDI) (“Sun Kissed”, “SKDI”, or the “Company”), an emerging player in the CBD marketplace, is pleased to announce that, in preparation for future acquisitions, has agreed with long term note holder ‘Green Light Developments LLC’ to have all of the outstanding debt, with interest, removed from the liabilities and forgiven, with no consideration due.

Sun Kissed CEO, Mr. Carl Grant, stated today that “We have worked with Green Light to help us meet our liabilities over the past two years and they have been a fantastic partner. In the current economic climate, we need to be as lean as possible and we have used this to agree to a complete forgiveness of debt. We are extremely satisfied with our tough negotiating stance which sees Green Light with no equity or debt position whatsoever in Sun Kissed and we part ways at this point completely.

We have exciting acqusitions and partnerships in the works and this just further enhances the attractive propositions on the market right now with our liabilities being reduced by such a significant amount.”

Also, the company previously effected a massive 80% reduction in its Authorized Share Capital in preparation for its pervious acquisition, in January, of Products Group.

Sun Kissed Industries recently announced that it had closed on the acquisition of Products Supply Group, doing business as Hakuna Supply. Hakuna received the DOPE Magazine Best New Product award for Southern California in the non-cannabis/non-tech category in 2017. Hakuna has established high-end CBD-based products, including CBD Hemp Roast Coffees, CBD Coffee Bundles, CBD Tea Bundles, CBD Drink Drops, CBD Gummies, CBD Flower, a range of premium CBD Teas, and other premium products. We are beyond thrilled to be entering the closing stage of this significant acquisition over the very near term horizon and expect our overall valuation to increase dramatically over the next several months.

About Sun Kissed Industries, Inc.:
Sun Kissed Industries Inc. (OTC PINK: SKDI) is an emerging leader in the CBD-based products marketplace. The Company is pursuing meaningful acquisitions as part of an aggressive M&A strategy designed to position Sun Kissed as a dominant player in a well-defined, high-growth niche within the rapidly expanding CBD sector.

FORWARD-LOOKING STATEMENTS:

This press release may contain forward-looking statements, including information about management’s view of Sun Kissed Industries Inc.’s future expectations, plans and prospects. In particular, when used in the preceding discussion, the words “believes,” “expects,” “intends,” “plans,” “anticipates,” or “may,” and similar conditional expressions are intended to identify forward-looking statements. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of Sun Kissed, its subsidiaries and concepts to be materially different than those expressed or implied in such statements. Unknown or unpredictable factors also could have material adverse effects on Sun Kissed’s future results. The forward-looking statements included in this press release are made only as of the date hereof. Sun Kissed cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Sun Kissed undertakes no obligation to update these statements after the date of this release, except as required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for by Sun Kissed.

SOURCE: Sun Kissed Industries Inc.

Contact:
Target marketing agency
112 E 25th Street
New York, New York 10010
917-983-2268

CBDHakunaSupplyHempNewYorkOTCOTCMarkets,

OTCPRWIREOTCStocksPressReleaseSKDISunKissedIndustries

 

SINGLEPOINT DIRECT SOLAR RAPIDLY EXPANDS NATIONAL FOOTPRINT, NOW COVERING 25 STATES, INCREASING RESIDENTIAL SOLAR COVERAGE ADDING 9 (NINE) ADDITIONAL STATES SINCE IMPLEMENTING VIRTUAL SOLAR SALES PLATFORM

https://otcprwire.com/2020/04/07/singlepoint-direct-solar-rapidly-expands-national-footprint-now-covering-25-states-increasing-residential-solar-coverage-adding-9-nine-additional-states-since-implementing-virtual-solar-sales-plat/

NEWS VIA: OTC PR Wire

Posted: April 7, 2020

InNewsroomRenovable EnergySolar Energy

Virtual Solar Sales Platform successfully utilized to garner Sales, reducing and/or eliminating the sales cycle that primarily utilized in-person, in-home contact in a proactive response to COVID-19 safety precautions for our customers and employees. Battery Storage and Disaster preparedness continue to help drive consumer purchasing decisions

Phoenix, Arizona, April 7, 2020 – SinglePoint Inc. (OTCQB: SING) subsidiary Direct Solar America, a leading solar brokerage solution, has added 9 additional states, Colorado, New Mexico, Wisconsin, Minnesota, Pennsylvania, Georgia, South Carolina, New Jersey, and Connecticut since it recently repositioned it’s salesforce to leverage technology platforms that enable the Company to initiate and close a solar transaction utilizing remote and virtual solar sales professionals. Shifting to a virtual sales force has been a primary focus of management since the acquisition of the company by SinglePoint in May 2019, as we believe that the ability to book sales without an in-home visit is an additional differentiator and competitive advantage in the industry where door-to-door sales of residential solar had been the common practice.

Backyard with swimming pool in stylish home

Unprecedented market conditions and temporary in-person safety concerns due to the global COVID-19 virus accelerated our timeline and adoption of this initiative. In the first week the company has closed multiple residential deals and continues to build a pipeline of homeowners interested in lessening their environmental impact while saving money by going solar. We have also seen an increase in homeowners concerned with disaster preparedness through solar and battery backup to ensure that they have access to power at home regardless of existing conditions. Home batteries store solar power so that customers can avoid expensive time-based utility rates and keep a home powered up during an outage, which solar by itself cannot do. Heightened consumer interest in clean backup power, following a wave of wildfire-related blackouts in California, spurred residential storage to its biggest-ever quarter at the close of 2019, when the industry installed 40.4 megawatts, according to data from Wood Mackenzie and the Energy Storage Association.

Direct Solar America now operates in 25 states. Partnering with top contractors across the nation has provided the company the ability to scale quickly and provide homeowners with the information needed to make an educated decision on going solar. From education to installation Direct Solar America works with our homeowners throughout the entire process.

“The Direct Solar America management team did a great job re-positioning the company quickly in these uncertain times. Across various industries, companies are being forced to transform and adapt critical components of their business model to accommodate social and physical distancing due to COVID-19, scrambling to implement solutions that allow them to continue to operate. We are fortunate that we had identified this as a strategic need at the acquisition and the foresight to begin working on implementing this type of solution. We are encouraged that we have been able to retain most of our top sales professionals and can now give them the tools to succeed in virtual sales. Ultimately we believe this is a significant improvement in the process and will continue to drive the company to new levels in the future”, states Greg Lambrecht CEO SinglePoint.

To set an appointment call 844-830-1615 or visit https://directsolaramerica.com/appointment/

Our online solar process is a place for homeowners to feel comfortable and enjoy a no pressure sales environment. We look to educate homeowners on the available options in their local area encompassing product, installation and financing. We work with licensed, vetted contractors in multiple states and leverage that expertise to help homeowners make the best choice that brings the best value when selecting a solar system.

Direct Solar America is currently bringing on additional virtual agents. If you are interested in setting appointments or selling solar please contact 844-830-1615 and ask how you can start selling solar with Direct Solar America.

Recently announced SinglePoint Highlights

  • Full Year Revenue increased 189% to a record $3,343,833 million
    ● Full Year Gross profit increased 269% to a record $990,777 thousand
    ● Repaid Convertible note payable to investor (the “CVP Note”) dated October 10, 2017
    ● Launched Klen Hands – Hemp Seed Oil Infused Hand Sanitizer on March 13, 2020

About SinglePoint, Inc.
Founded in 2011 SinglePoint, Inc (OTCQB: SING) invests in and acquires brands and companies that will benefit from injection of growth capital and the sales and marketing expertise of SinglePoint. The company portfolio currently includes solar, hemp and technology applications. SinglePoint is working to grow the company to a multinational brand.

Connect on social media at:
https://www.facebook.com/SinglePointMobile
https://twitter.com/_SinglePoint
https://www.linkedin.com/company/singlepoint
https://www.youtube.com/user/SinglePointMobile
For more information visit: www.SinglePoint.com

Forward-Looking Statements
Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the Company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.

Technical complications, which may arise, could prevent the prompt implementation of any strategically significant plan(s) outlined above. The Company undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.

Corporate Communication
SinglePoint Inc.
888-OTC-SING
investors@singlepoint.com
www.singlepoint.com

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HEMPAMERICANA ISSUES CORPORATE UPDATE ON NEW STRATEGIC INITIATIVES

NEWS VIA: OTC PR WIRE

https://otcprwire.com/2020/04/07/hempamericana-issues-corporate-update-on-new-strategic-initiatives/

Posted: April 7, 2020

In: CBDHEMPNewsroom

NEW YORK, NY, April 7, 2020 – HempAmericana, Inc. (OTC PINK: HMPQ) (“HempAmericana” or the “Company”), an emerging leader in the CBD products market, is pleased to provide shareholders with an update as the Company scales up its CBD-based product operations.

Salvador Rosillo, CEO of HempAmericana, commented, “After confronting a series of obstacles and falling behind our outlined schedule, we have mapped out a path to drive improved performance in the months ahead. We believe we will be able to mobilize multiple factors to boost our footprint in terms of potential customers we can reach, distribute to, and retain over time.”

New initiatives underway at HempAmericana include:

  • Alibaba B2B Onboarding: The Company has begun the process of onboarding onto the Alibaba B2B platform. Management will release further details over the very near-term about this partnership. But the Company believes this relationship represents a powerful catalyst for its positioning in the CBD-based products marketplace.
  • Affiliate Marketing: The Company has recently acquired over 400 prominent and relevant domains to point toward its ecommerce site. As a result, HempAmericana has already seen a tangible increase in traffic to its new ecommerce site at HempAmericana.store.
  • Targeted Customer Database: HempAmericana has begun to build a defined database of current and potential customers for the purpose of targeted marketing operations as the Company strives to amplify near and intermediate term sales growth now that its ecommerce payment acceptance system is fully operational for major payment methods.
  • Improved Customer Service: The Company is working diligently to improve its ability to build lasting relationships with its customers through a number of new customer service strategies. Management will release more details about its customer service strategies in coming communications.
  • Product Pricing: The Company is currently in a position to offer its CBD-based products at a 20% discount to participate in the marketplace at ultra-competitive pricing both in order to maximize its market and brand positioning and to offer exceptionally affordable pricing for those experiencing hardship and undue stress as a consequence of the COVID-19 pandemic outbreak.
    Management notes that the Company will discuss these initiatives in greater detail in coming communications.

“We understand the terrain in this market probably a lot better than most of our competitors at this point because we have been through a battle to get to this point,” continued Rosillo. “It hasn’t been ideal. But that process has also equipped us with hard won knowledge capital while the long-term CBD growth thesis remains completely intact.”

About HempAmericana, Inc.:
HempAmericana is an emerging leader in the CBD products market. The Company owns and operates a high-capacity, state-of-the-art CBD extraction and processing facility located in Augusta, Maine. This facility is armed with a supersized supercritical CO2 extraction system, centrifugal partition chromatography refinement technology, and a mechanized fully-automated CBD bottling system. The Company’s CBD oil business uses the brand designation, “CBD Oleum”. HempAmericana also researches, develops, and sells products made of industrial hemp, including a popular brand of hemp rolling papers marketed under the brand name, “Rolling Thunders”. See more at www.hempamericana.com.

Safe Harbor Provision. Cautionary statement for purposes of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995: Information in this news release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of the Company and its consolidated subsidiaries could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks, uncertainties and assumptions include the execution and performance of contracts by the Company and its customers, suppliers and partners. Please also review Hemp Americana annual and quarterly financials for a more complete discussion of risk factors. The Company disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise. This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities nor shall there be any sale of these securities in any state in which such solicitation or sale would be unlawful prior to registration or qualification of these securities under the laws of any such state.

Corporate Contact:
HempAmericana.com
Salvador Rosillo
HempAmericana, Inc.
Phone: (888) 977-7985

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SPECTACULAR SOLAR CEO PROVIDES COVID-19 UPDATE REGARDING COMPANY OPERATIONS

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/04/07/spectacular-solar-ceo-provides-covid-19-update-regarding-company-operations/

Posted: April 7, 2020

In: EnergyRenovable EnergySolar Energy

Rahway, NJ, April 7, 2020 – Spectacular Solar, Inc. (OTC PINK: SPSO), CEO Doug Heck has authored the following letter to keep shareholders and investors abreast of the impacts that the COVID-19 outbreak has had on Spectacular Solar.

Dear Shareholders and Potential Investors,

As COVID-19 began spreading on a global basis and gripped the media in January, I really hoped and prayed that we would not be where we are today. I was extremely concerned about the ripple effects it would have on small businesses across our great country. My concern was obviously well-founded, but it has been more of a shockwave than a ripple effect to the small business community and to the global economy.

I hope this letter finds you and your family safe and that social distancing is an absolute practice for you. As CEO, I have two families to be concerned about. I have my family at home and I have all the people that work for me as my Spectacular Solar family.

Since my last letter, Gov. Murphy (D-NJ) shut down all non-essential businesses in New Jersey and I support him for doing so. The office at 1401 Witherspoon Road is closed and my essential personnel are working from home. My goal since my last correspondence has gone from keeping my people safe from the coronavirus to keeping them safe and employed.

As of this writing, we have not laid anyone off nor do we intend to. We have applied for a S.B.A. disaster loan to assist us with payroll. Loans such as these, when acquired for the purposes of covering payroll, are eligible for forgiveness, so it is our hope to acquire this funding to soften the blow while keeping paychecks coming for my employees.

While we are not operating at 100% capacity, we still have roofers working outdoors on a number of projects. Interior building work is prohibited at this time. So as long it is safe and legal to do so, we will continue to move towards completing these projects.

Earlier this year, the SEC and OTCMarkets offered 45-day extensions for publicly traded companies to file their annual financial reports. We were hoping to avoid using the extra time but once non-essential businesses were shutdown in Houston, where the two firms handling our audit are located, and here in New Jersey, we were left with little choice but to file for the extra time. We have made tremendous progress in auditing 2018 and 2019 but as the resources of the human variety diminished, so did our ability to have the audit completed by March 31.

Regarding the share buyback, we are still actively to trying to buy back older stock certificates but have shelved buying shares on the open market to later in the year as means of stockpiling cash. I had previously disclosed that one of our directors was planning to buy shares on the open market and that is still in play. But like everyone else, he has had to measure the immediate impact of COVID-19 on his business and cash flow, not to mention the impact of the immense broader market drop on his personal portfolio. That being said, he is committed to purchasing SPSO shares on the open market and a subsequent form 4 will be filed with the SEC.

I know my sales team is chomping at the bit to get back in action with the face-to-face meetings with potential clients but that will have to wait until it is safe to do so. In the meantime, they are utilizing a variety of online means to connect with people and have recently closed some residential deals, which is outstanding considering the current situation. The bigger deals, which require meetings with a significant amount of people on both sides of the table, have been put on the back burner until this situation is behind us.
Stay safe and stay healthy!

Doug Heck, CEO

For more information: please visit: http://www.spectacularsolar.com and please follow us on Twitter: @SPECTACULARSOL1

Investor Relations/Media Contact: Gregg Boehmer: laynemichaelpr@gmail.com

Wyndham Hotel Project Video:

About Spectacular Solar, Inc.: Spectacular Solar is a diversified company involved in solar system installations, investment fund management, and roofing contracting through its subsidiaries. SPSO designs and installs state-of-the-art solar conversions for home and business owners. Star Power Services is a bonded and licensed roofing contracting company with expertise in new roof installation, repairs, and maintenance. The Solar Energy Investors Fund contributes to the ongoing insurance expenses directly associated with installation of solar systems. In return, the fund receives a share of tax benefits and ongoing revenue generated from electricity sales.

Safe Harbor Statement
This release contains forward-looking statements that relate to future events or performance. These statements reflect the company’s current expectations and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. The company doesn’t undertake to update or revise these forward-looking statements, even if experience or future changes make it clear that any projected results, expressed or implied, in this or other company statements will not be realized. Readers are cautioned that these statements involve risks and uncertainties, many of which are beyond the company’s control, which could cause actual results to differ materially from the forward-looking statements. Factors that could cause these differences include, but are not limited to, the acceptance of our products, lack of revenue growth, failure to realize profitability, inability to raise capital and market conditions that negatively affect the market price of our common stock. The Company disclaims any responsibility to update any forward-looking statements.

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HALBERD ANNOUNCES AGREEMENT TO RETIRE 192,000,000 OUTSTANDING COMMON SHARES AND ACQUISITION/JOINT VENTURE TO BE ANNOUNCED, IN DETAIL, THIS WEEK

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/04/06/halberd-announces-agreement-to-retire-192000000-outstanding-common-shares-and-acquisition-joint-venture-to-be-announced-in-detail-this-week/

Posted: April 6, 2020

In: Newsroom

Lake Charles, Louisiana — April 6, 2020 – Halberd Corporation (OTC PINK: HALB) announces that it has reached an agreement with shareholders holding 192,000,000 shares of the 482,838,125 reported as currently outstanding. Those shares will be returned to treasury and retired. We are also reducing the authorized shares of common stock to 1,000,000,000.

Mr. LeDoux, the new CEO, explained that “perhaps even before becoming compliant with our reporting obligations with OTCMarkets, within the next few days, we will detail the transaction which will drive Halberd’s future.”

Safe Harbor Statement: This release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Such statements include any that may predict, forecast, indicate, or imply future results, performance or achievements, and may contain the words “estimate”, “project”, “intend”, “forecast”, “anticipate”, “plan”, “planning”, “expect”, “believe”, “likely”, “should”, “could”, “would”, “may” or similar words or expressions. Such statements are not a guarantee of future performance and are subject to risks and uncertainties that could cause the company’s actual results and financial position to differ materially from those in such statements, which involve risks and uncertainties, including those relating to the Company’s ability to grow. Actual results may differ materially from those predicted and any reported should not be considered an indication of future performance. Potential risks and uncertainties include the Company’s operating history and resources, economic, competitive, and equity market conditions.

James Christopher LeDoux, CEO
Halberd Corporation
Email Contact: support@halberdcorporation.com

 

ABN AMRO cuts overdraft rates

News item – 03 April 2020

https://www.abnamro.com/en/newsroom/newsarticles/2020/abn-amro-cuts-overdraft-rates.html

ABN AMRO

The outbreak of the coronavirus has had an acute impact on the financial situation of many businesses and private individuals. Banks in the Netherlands, including ABN AMRO, have taken a range of measures to help keep their clients as financially healthy as possible through the crisis. Loans and interest charged on loans are a key topical issue, and we have decided to help our clients by cutting to 9.9% our rates on our Privé Limiet Plus overdraft facility, equal to that on our Roodstaan product.

There are different ways to borrow money. ABN AMRO currently offers two different types of loans: overdraft facilities (including Privé Limiet Plus) and personal loans. Interest charges on overdraft facilities are typically higher than those on personal loans, reflecting the difference in costs and risks that the bank takes on.

Examples:

  • A personal loan up to EUR 25,000 has interest rates from 4.2%.
  • An overdraft facility (Roodstaan) up to EUR 2,500 has an interest rate of 9.9%.
  • Granting a loan typically involves EUR 100 in administrative costs. To pass this on to the client, this requires the following interest charges: 100/25,000 = 0.40% in case of the personal loan and 100/2,500 = 4% for going into the red.

In the event of more structural borrowing requirements, other loan products – such as personal loans – are more appropriate and sustainable than tapping into an overdraft facility. And if clients briefly need some additional financial scope, the Roodstaan overdraft facility is a good solution.

What help does ABN AMRO offer its borrowers?

If clients run into financial trouble, we are happy to help them find an appropriate solution. And these times are no different: we want to help our clients as much as we can. Which is why we have reduced the interest charge on our Privé Limiet Plus product to 9.9% from 1 April 2020.

In addition, we are offering our borrower clients the option of a payment holiday. This means that they can ask for their interest payments and repayments to be suspended for three months, and this arrangement includes mortgage clients. These schemes are intended for clients who are affected by the corona crisis in one way or another and who are already or may soon be facing financial repercussions. Business clients also qualify for a payment holiday. In fact, they are granted an automatic payment holiday of six months unless they formally opt out of this arrangement. We are running these schemes to help ease the burden on our clients temporarily.

Preventing payment arrears and debt

ABN AMRO feels it is essential that client debts and payment arrears are flagged very early on – and preferably prevented altogether. At a time when many people in this country are facing major financial setbacks because of the corona crisis, it’s important to act fast. We help our clients in a variety of ways:

  • Grip app: a digital household budgeting toolthat shows exactly what you spend your money on.
  • A free personal financial insight report. This report provides a clear view of your individual financial situation and is free of charge. Focus issues are also flagged, such as your income upon retirement and any financial benefits to your family should you pass away.
  • Financial Grip Coaches. Preventing problems, that’s our approach. But that doesn’t always work and ABN AMRO has so-called Financiële Grip-Coaches in place to help out clients that find it hard to shake off debt. These certified budget coaches have assisted over 40,000 ABN AMRO clients in the past few years.
  • ABN AMRO is also a member of the Nederlandse Schuldhulproute (NSR), an initiative to help clients who are at risk of sliding into debt and to prevent problematic debt.
  • We have a range of methods to flag payment issues at an early stage or even to head them off before they arise by pro-actively contacting clients and seeking a solution together.

Codes of conduct

ABN AMRO complies with the code of conduct drawn up by the Dutch Banking Association (NVB) in close consultation with the authorities and the banking sector. These codes of conduct set out minimum criteria for responsible lending that banks are required to observe. Individual banks are free to pursue more rigorous policies, but must comply with the code of conduct at the very least.

 

ABN AMRO to postpone dividends on the recommendation of the European Central Bank (ECB); expects loss in Q1 2020

Press release – 30 March 2020

https://www.abnamro.com/en/newsroom/press-releases/2020/abn-amro-to-postpone-dividends-on-the-recommendation-of-the-ecb.html

ABN AMRO

ABN AMRO has taken notice of the recommendation of the European Central Bank (ECB) to credit institutions under ECB supervision to conserve capital and refrain from making dividend payments and perform share buy-backs until at least 1 October 2020 in order to support the economy in an environment of heightened uncertainty caused by COVID 19.

ABN AMRO’s annual general meeting is expected to take place as planned on 22 April 2020. At the recommendation of the ECB, ABN AMRO has decided to keep the initial proposal for distribution of the dividend for the financial year 2019 but make the actual payment conditional to the reassessment of the situation once the uncertainties caused by COVID 19 disappear (and, in any case, not before 1 October 2020). In addition, ABN AMRO will not pay an interim dividend in August 2020.

ABN AMRO has a strong capital position (CET1 of 18.1% at YE 2019) and a significant buffer above its minimum capital requirements. Given our strong capital and liquidity position and the bank’s important role in the Dutch economy, ABN AMRO was able to announce several measures to support clients affected by the COVID 19 virus in the past 2 weeks. For almost all Commercial Banking clients payments of interest and principal are automatically deferred for 6 months, unless clients opt-out. And clients with a mortgage or a consumer loan affected by COVID 19 can obtain a three month deferral of interest and principal payments.

The long term impact of the Corona virus on the economy, on our clients and on the quality of our loan portfolio is currently uncertain. We expect the FY2020 and especially Q1 2020 cost of risk to be materially higher than the through-the-cycle cost of risk range of 25-30bps. Together with the incidental loss at ABN AMRO Clearing, we expect to record a loss in Q1 2020.

 

Firm acquires Liberty Trust Company, launches Emergency Savings Fund product and builds out workplace retirement solutions

MARCH 17, 2020

https://www.mtrustcompany.com/press-release/2020/03/17/millennium-trust-announces-acquisition-expands-services-and-grows-fourth

OAK BROOK, IL, March 17, 2020 – Millennium Trust Company, LLC (“Millennium Trust”), a leading provider of retirement and institutional services, ended 2019 with $26.7 billion in assets under custody, comprised of nearly 1.5 million client accounts. The firm continued to grow its business with the strategic acquisition of substantially all the assets of Liberty Trust Company, LTA, representing Millennium Trust’s sixth acquisition over the past three years, and also expanded its Emergency Savings Fund and Workplace Savings Solutions products.

With millions of Americans still underprepared for retirement, Millennium Trust continues to focus on retirement security for all Americans. In particular, the company introduced its Emergency Savings Fund product that creates the opportunity for millions of Americans to save for financial emergencies. The solution allows retirement providers to partner with Millennium Trust to offer an easy and automatic emergency savings option to plan participants, while simplifying administrative processes. The solution was developed and deployed rapidly – in just several months – to meet a deadline for a major recordkeeper.

To date, the company has implemented more than 110,000 agreements with plan sponsors and has opened more than two million automatic rollover IRAs, with the goal of reconnecting people with their retirement savings and boosting financial wellness, while reducing expenses and risk for plan sponsors. The firm also expanded its Institutional Custody Services, opening a record number of accounts in 2019, and strengthened relationships with existing clients through technological innovations and dedication to service. Millennium Trust ended the year with $12.1 billion assets under custody in more than 800 private and public funds.

“As we head into 2020, our 20th year in business, we remain a leader in the industry with innovative products and services that are designed to promote retirement security throughout every level of our diverse client base – directly or indirectly,” said Gary Anetsberger, CEO of Millennium Trust. “Our commitment to clients is shown through new solutions and digital enhancements, whether it’s increasing access to easy-to-use educational resources and alternatives investments through the Millennium Alternative Investment Network® (MAIN®) or helping small businesses and their employees save for retirement in the workplace.”

In its commitment to encourage retirement readiness for the millions of small businesses and their employees that lack access to a retirement savings option, Millennium Trust continued to expand capabilities for its Workplace Savings Solutions, including enhanced customization for distribution partners who use the Retirement Savings Selector Tool for Small Businesses. By partnering with payroll providers and other organizations that work with small businesses, the firm can continue to enable small employers to implement and administer an affordable and flexible savings program.

“The incredible growth we’ve seen in the fourth quarter is reflective of our clients’ vote of confidence in our ability to offer products and services they can rely on, while utilizing both best-in-class technology and our dedicated service team,” said Erik Beck, Chief Growth Officer of Millennium Trust Company.  “Our focus is to build deep and meaningful relationships with clients, both new and old, and continuously exceed their evolving needs – and we have demonstrated that throughout 2019.”

Millennium Trust launched new client portals to provide individuals easy online access to their accounts, so they can manage their retirement investments. The firm also enhanced its integration capabilities to allow for a more streamlined client onboarding experience. Individual Custody Services ended the fourth quarter with 15 percent more self-directed IRAs opened in 2019 than in 2018. Additionally, the firm showcased its expertise in delivering specialized custody solutions for alternative assets and increasing access to investments – with more than 20,000 unique assets under custody at the end of the quarter – while continuously offering clients increased value and an improved client experience.

About Millennium Trust Company®

Millennium Trust Company is a leading provider of specialized retirement and institutional custody services with nearly 1.5 million accounts holding over $26 billion in assets. We are committed to the evolving needs of individuals, employers, advisors and retirement services partners and empower clients with trusted expertise, exceptional service and access to a wide range of solutions. Whether clients are managing corporate retirement assets, running a business or wanting choice beyond traditional asset options, we provide flexible and digital solutions to support our clients’ success.

Millennium Trust Company performs the duties of a directed custodian, and as such does not provide due diligence to third parties on prospective investments, platforms, sponsors or service providers and does not sell investments or provide investment, legal, or tax advice. For more information about Millennium Trust Company, follow us on Twitter and LinkedIn.

 

RELEASE Number

8144-20

https://www.cftc.gov/PressRoom/PressReleases/8144-20?utm_source=govdelivery

April 6, 2020

CFTC Issues COVID-19 Customer Advisory on Fee Scams

Washington, D.C. — The Commodity Futures Trading Commission today issued a Customer Advisory informing the public to be on alert for frauds seeking to profit from recent job losses due to the COVID-19 (coronavirus) pandemic. This is the second advisory the CFTC has issued in response to the pandemic. [See CFTC Press Release No. 8134-20]

Specifically, these frauds may seek to convince customers they can earn unrealistically high profits from home, but later force them to pay excessive “fees” and “taxes” to get their supposed earnings. These frauds typically involve unregistered brokers selling binary options, foreign exchange (forex) programs, and cryptocurrencies. The brokers primarily use social media and messaging apps to target people who have lost their jobs and are looking for replacement income.

“One of the best defenses against becoming a victim of fraud is being informed,” said CFTC Chief Communications Officer and Director of Public Affairs Michael Short. “We will continue to provide the public with resources to help detect and avoid fraud during this volatile period.”

“Tips and complaints from the public are especially helpful in rooting out this kind of misconduct,” added CFTC Enforcement Director James McDonald. “The CFTC will vigorously pursue fraudsters who seek to prey on Americans facing hard times as a result of this pandemic.”

About the Office of Customer Education and Outreach

The Customer Advisory was prepared by the CFTC’s Office of Customer Education and Outreach (OCEO), which is dedicated to helping customers protect themselves from fraud or violations of the Commodity Exchange Act through the research and development of effective financial education materials and initiatives. OCEO engages in outreach and education to retail investors, traders, industry organizations, and the agricultural community. The office also frequently partners with federal and state regulators as well as consumer protection groups. The CFTC’s full repository of customer education materials can be found at: cftc.gov/LearnAndProtect.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.

The Customer Advisory is available in full below and on the CFTC’s new coronavirus webpage:  cftc.gov/coronavirus.

* * * * * * *

The Commodity Futures Trading Commission advises the public that unregistered brokers selling binary options, foreign exchange (forex) programs, and cryptocurrencies are targeting people who lost their jobs due to the coronavirus outbreak. The scams are primarily conducted on social media and via messaging apps. The fraudsters convince their victims they can earn unrealistically high profits from home, but later force the victims to pay excessive “fees” and “taxes” to get their supposed earnings. The profits are not real and the fraudsters disappear when the victims stop paying.

 

Success is Easy to Fake Online

 

Social media and online videos are full of people claiming to be instant millionaires and Wall Street wizards, but take all that with a grain of salt. Profiles, websites, past trades and profits can be easily faked. Here are some warning signs of “brokers” you should avoid:

 

You only engage online; you can’t identify the broker’s physical location or headquarters.

The broker communicates via messaging apps.

You’re asked to pay in Bitcoin or other digital assets.

You’re promised or guaranteed unrealistic returns in a short amount of time.

The broker or firm is not registered with the CFTC; to check, visit cftc.gov/check.

The broker or firm operates outside the United States.

What to Consider              

Trading forex, binary options, and digital assets is highly risky. No program, automated trading system, or individual can guarantee returns of thousands of dollars in just a few hours or days of trading.

In fee scams, the earnings are never real. The fraudster’s goal is to get investors to pay the upfront deposit and later pay ridiculously high commissions, taxes, and fees. The promise of huge profits is dangled in front of the investors to make the fees and taxes look like a small percentage of what they’ve earned. But when all is said and done, the investors are out their deposits, and the money they’ve spent chasing their phony earnings.

Always remember:

  • Risks, fees, and commissions should always be disclosed before accounts are opened.
  • Never pay more money to withdraw from your own account.
  • Most individual speculators will pay taxes on gains when they file their personal income taxes. U.S. brokers will not collect or withhold taxes from trading accounts.
  • Do not pay for trading advice, or pay people to trade for you if they are not registered with the CFTC or other U.S. regulators, especially if you have only met online, communicated through messaging apps, or if they operate outside the United States.
  • Designated contract markets for binary options and retail forex dealers also must be registered with the CFTC before they can solicit U.S. customers. Checktheir registration status before you deposit any money.

How Fee Frauds Happen

Victims are typically introduced to the phony brokers online. Sometimes, a member of a discussion or group will recommend a broker who’s making him or her a lot of money. Many of these frauds sell the victims on affiliate plans that will boost their profits if they recruit others into the scheme, making them unwitting participants in the fraud. The group post is typically accompanied by a link to a Telegram chat, Whatsapp number, or other messaging app.

In the messaging app, victims may see reports of payouts to other traders. These are fake statements that are meant to convince traders that other people are making money in the program. The names and amounts are not real. The customers are told that if they join the broker’s program, by paying the upfront deposit, they will receive tens of thousands of dollars in a very short amount of time—commonly a few hours, days or weeks. Often, the customers are shown small, medium and larger amounts they can deposit; the more they pay, the more they will make or the faster it will accumulate. Sometimes the customers are directed to a website to provide their payment information, or may be asked to pay the deposit directly to the broker’s wallet using bitcoin or other digital assets.

Once the deposit is made, investors receive live text updates or regular statements showing how fast their money is supposedly growing. At the end of the required investment period, the broker has exceeded all expectations. Except, when the investors try to claim their $15,000 or $25,000 in gains, for example, they’re told they first have to pay a $1,500 commission. When they pay the commission, they are told they have to pay another $800 in taxes. When they pay the taxes, they are asked for another $200 in money transfer fees, and so on until the customer finally refuses to pay or the fraudster disappears. In the complaints received by the CFTC, the dollar amounts vary, but this pattern is consistent.

Preying on At-Home Workers and the Unemployed

The CFTC has received hundreds of fee fraud complaints in recent months, however these frauds are now targeting those who have become recently unemployed or are now working from home because of the coronavirus outbreak. More group discussions now talk about how easy it is to earn money from home or make money trading with no experience.

Before making any trade or investment, be sure you fully understand how the markets function, the products you are trading, and the fees, commissions, and risks involved. Ask people providing you advice or trading on your behalf where they are physically located—ask for an office address—and if they are registered with the CFTC. If they say “yes,” ask for their registration ID number, and verify their registration information at cftc.gov/check before depositing any money. If you are sent to a trading platform, be sure that company is registered too. Registration is no guarantee against fraud. However, it does indicate that individuals have passed thorough background checks and specific proficiency tests, and that firms and trading platforms meet certain financial and customer protection requirements.

If you believe you’ve been a victim of fraud, submit a tip at cftc.gov/complaint.

-CFTC-

 

HALBERD MOVES FORWARD – ANNOUNCES NEW CEO, COMMENCES PROCESS TO BECOME CURRENT, HOLDING COMPANY REORGANIZATION

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/04/03/halberd-moves-forward-announces-new-ceo-commences-process-to-become-current-holding-company-reorganization/

Posted: April 3, 2020

In: Newsroom

Lake Charles, Louisiana — April 3, 2020 – Halberd Corporation (OTC PINK: HALB) announces that James Christopher LeDoux is the new CEO.

Mr. LeDoux explains that “Halberd is now current in its filings with the Colorado Secretary of State. The Colorado state filings include, as a prophylactic measure to assure a smooth transition to its new endeavor, a holding company reorganization. As such, Halberd Corporation as it is currently constituted, is the successor issuer, has a clean slate, is debt-free, with a subsidiary, Alaric Corporation, which is the former public company issuer, often called the predecessor issuer.”

He went on to assure that the Company has commenced the process to become current in its reporting obligations to OTCMarkets.

Mr. LeDoux further stated “These initial measures will enable Halberd to proceed with its pending transactions which we intend to announce within the next several days.”

Safe Harbor Statement: This release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Such statements include any that may predict, forecast, indicate, or imply future results, performance or achievements, and may contain the words “estimate”, “project”, “intend”, “forecast”, “anticipate”, “plan”, “planning”, “expect”, “believe”, “likely”, “should”, “could”, “would”, “may” or similar words or expressions. Such statements are not a guarantee of future performance and are subject to risks and uncertainties that could cause the company’s actual results and financial position to differ materially from those in such statements, which involve risks and uncertainties, including those relating to the Company’s ability to grow. Actual results may differ materially from those predicted and any reported should not be considered an indication of future performance. Potential risks and uncertainties include the Company’s operating history and resources, economic, competitive, and equity market conditions.

James Christopher LeDoux, CEO
Halberd Corporation
Email Contact: support@halberdcorporation.com

News

Twitter: @HalberdC

AlaricCorporationCorporationHALBHalberdCorporation,

HoldingCorporationOTCOTCMarketsOTCPRWIRE,

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CHILCO RIVER HOLDINGS, INC. (CRVH) PROVIDES SHAREHOLDER UPDATE AND ANNOUNCES MERGER AND CHANGE OF CONTROL

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/04/03/chilco-river-holdings-inc-crvh-provides-shareholder-update-and-announces-merger-and-change-of-control/

PostedApril 3, 2020

In: Newsroom

LAS VEGAS, Nevada – April 3, 2020 – Publicly-held Chilco River Holdings, Inc. (OTC Pink: CRVH) announces the completion of the reverse takeover by Unity Consumables Holding Group LLC. and confirmation of CRVH business model shift to a holding company that will house products and services in several worldwide markets.

“The focus and strategy going forward in the coming weeks will be to bring the status of the company current with OTC Markets, and begin to reveal existing contracts and revenues as well as the strategy for growing the business model exponentially with planned acquisitions.” stated Will Lovett, Chief Executive Officer. “We have received several new contracts with national brands that we will be announcing in the coming weeks and I’m especially excited about these new contracts will mean for our future revenues”.

Chilco River Holdings has started compiling the initial information to OTC Markets needed to become current. Management expects that such milestones will be completed in the coming months. Management plans to start releasing frequent updates as there are many new material events that they wish to keep shareholders abreast of.

Synergy Management Group has begun the closeout process with the courts to discharge as court appointed custodian. “I’m extremely pleased we were able to revitalize and transform Chilco River Holdings back into a viable business once more” stated Benjamin Berry, Court Appointed Custodian. “We believe in Mr. Will Lovett, the company needs a dedicated person with strong leadership delivering success for the company and its shareholders”. please follow us on twitter @chilcoriverinc

Statements in this press release that are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although Chilco River Holdings, Inc. believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, Chilco River Holdings, Inc is unable to give any assurance that its expectations will be attained. Factors that could cause actual results to differ materially from expectations include the company’s ability identify a suitable business model for the corporation.

Contact:
Will Lovett
Chief Executive Officer
Email: chilcoriverholdingsinc@gmail.com

ChilcoRiverHoldingsConsumablesCRVHLasVegas,

NEVADAOTCOTCMarketsOTCPRWIREOTCStocks,

PressReleaseSynergyManagementGroup,

UnityConsumablesHolding

 

HEMPAMERICANA ANNOUNCES LAUNCH OF NEW AND IMPROVED ECOMMERCE SALES PLATFORM

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/04/02/hempamericana-announces-launch-of-new-and-improved-ecommerce-sales-platform/

Posted April 2, 2020 

In CBDHEMPNewsroomRetail

NEW YORK, NY, April 2, 2020 – HempAmericana, Inc. (OTC PINK: HMPQ) (“HempAmericana” or the “Company”), an emerging leader in the CBD products market, is pleased to announce the Company has launched its new ecommerce sales platform.

The Company is inviting its customers and new visitors to explore its new and improved e-commerce sales platform at www.hempamericana.store. The new website has been designed to offer the ultimate user-friendly experience with an improved “ease of use” and functionality while allowing customers to see the wide variety of full spectrum CBD oils the Company offers. “We upgraded the website with our customers in mind, the site includes more information about our products such as our COA’s, to help buyers find the right CBD product they need, and to instill better Confidence in this age of uncertainty“ stated Company CEO Sal Rosillo.

For a few months the Company was not able to process orders due to a change in Policy with the PayPal Platform not allowing Hemp related product sales. The Company has retained an Industry leading payment processor that accepts payment for Hemp products. The Company is very pleased to have been approved to accept credit cards through First Direct Financial. We recognize that this process took more time than we liked, but now we are ready to meet the ever-growing market demand and are fully ready to sell, process, and ship orders more efficiently than ever.
Mr. Rosillo, a former Artillery Surveyor Forward Observer for the United States Army said, “I am still committed to pursuing my vision of building a company that captures 5% of the total CBD market which is projected to be approximately $22 billion in the next few years.”

As our country goes through this Corona Virus Crisis, we wish to note, Hemp is known to hold properties that help build a stronger Immune system and the demand for such products have spiked per recent reports. In closing, we wish everyone a safe period and we are offering customers a 20% discount for our full spectrum CBD to help deal with the anxiety of this pandemic. We wish everyone well and hope they stay safe.

About HempAmericana, Inc.:
HempAmericana is an emerging leader in the CBD products market. The Company owns and operates a
high-capacity, state-of-the-art CBD extraction and processing facility located in Augusta, Maine. This facility is armed with a supersized supercritical CO2 extraction system, centrifugal partition chromatography refinement technology, and a mechanized fully-automated CBD bottling system. The Company’s CBD oil business uses the brand designation, CBD Oleum. HempAmericana also researches, develops, and sells products made of industrial hemp, including a popular brand of hemp rolling papers marketed under the brand name, “Rolling Thunders”.

Safe Harbor Provision: Cautionary statement for purposes of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995: Information in this news release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of the Company and its consolidated subsidiaries could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks, uncertainties and assumptions include the execution and performance of contracts by the Company and its customers, suppliers and partners. Please also review Hemp Americana annual and quarterly financials for a more complete discussion of risk factors. The Company disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise. This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities nor shall there be any sale of these securities in any state in which such solicitation or sale would be unlawful prior to registration or qualification of these securities under the laws of any such state.

Corporate Contact:
HempAmericana.com
Salvador Rosillo
HempAmericana, Inc.
Phone: (888) 977-7985

CBDEcommerceHempHempAmericanaHMPQNewYork,

OTCOTCMarketsOTCPRWIREOTCStocksPressRelease,

PressReleaseDistribution

 

RELEASE Number

8143-20

https://www.cftc.gov/PressRoom/PressReleases/8143-20?utm_source=govdelivery

April 2, 2020

Joint Release

Board of Governors of the Federal Reserve System
Commodity Futures Trading Commission
Federal Deposit Insurance Corporation
Office of Comptroller of the Currency
Securities and Exchange Commission

Agencies Will Consider Comments on Volcker Rule Modifications Following Expiration of Comment Period

Washington, D.C. — Five federal financial regulatory agencies on Thursday announced that they will consider comments submitted before May 1, 2020, on their proposal to modify the Volcker rule’s general prohibition on banking entities investing in or sponsoring hedge funds or private equity funds—known as “covered funds.”

The agencies will continue to consider comments to provide interested persons more time to analyze the issues and prepare their comments in light of potential disruptions resulting from the coronavirus.  The proposal asked for comments to be submitted by April 1, 2020.

The agencies will continue to work together on policy issues as the coronavirus pandemic unfolds.

*         *         *

Media Contacts:

Federal Reserve Board      Eric Kollig                       (202) 452-2955

CFTC                                 Office of Public Affairs     (202) 418-5080

FDIC                                  David Barr                          (202) 898-6992

OCC                                   Bryan Hubbard                  (202) 649-6870

SEC                                    Office of Public Affairs     (202) 551-4120

-CFTC-

 

FERNHILL IS SET TO SANITIZE WITH ALCOHOL, ALOE AND CBD!

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/04/01/fernhill-is-set-to-sanitize-with-alcohol-aloe-and-cbd/

Posted: April 1, 2020

In: Newsroom

0

Carlsbad, Ca.- April 1, 2020- Fernhill Beverage, Inc., (OTC PINK: FHBC) is pleased to announce that the Company has begun the process of converting a portion of a production facility, normally intended to fill beverage bottles, into one that is capable of producing sanitizer.

Fernhill has collaborated with experts to develop an alcohol-based sanitizer. This sanitizer is ideal for use on hands, services and other objects. To alleviate a major side effect of frequently adding alcohol-based sanitizer to skin, such as dry and cracked skin, Fernhill has developed a product that contains Aloe for soothing and CBD for healing. The product is also infused with Natural Lemon for a pleasant scent.

The product is packaged in a sleek for ounce plastic bottle with a spray-pump cap. Fernhill will be producing the product for partner outlets to retail. This in the industry is referred to as “White Labeling”. Fernhill already has agreements with 2 companies to apply their label to the product immediately. Fernhill is currently engaged in negotiations with many more companies that are anxious and excited for the opportunity to add the enhanced sanitizer to their portfolio of products.
Fernhill will be ready for production of this new and exciting product in 2 weeks. Preparations for the equipment conversion are currently in progress and ahead of schedule.

“These are not typical times. There is a need for products that protect and bring comfort to people. Even though this has not been our standard business, Fernhill has the expertise and ability to help in the production of essential merchandise. It is the Company’s desire to aid as much as possible in these uncommon times.” States Larry Twombly; Fernhill Beverage CEO. Mr. Twombly adds: “In the temperament of helping, Fernhill Beverage has donated a sizeable amount of the Company’s RK Super Vitamin Packed Kid’s Drink to food banks in California dedicated to heling children that are reliant on school lunch programs for their daily nutrition. Fernhill Beverage holds the belief that if we can help, we must help.”

Please follow the Company on Twitter @fernhillbev .The Company will be releasing updates. Many exciting things are happening.

Safe Harbor:
Statements in this press release may constitute forward-looking statements and are subject to numerous risks and uncertainties, including the failure to complete successfully the development of new or enhanced products, the Company’s future capital needs, the lack of market demand for any new or enhanced products the Company may develop, any actions by the Company’s affiliates that may be adverse to the Company, the success of competitive products, other economic factors affecting the Company and its markets, seasonal changes, and other risks detailed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission. The actual results may differ materially from those contained in this press release. The Company disclaims any obligation to update any statements in this press release.

Fernhill Beverage, Inc.
Contact: info@fernhillbev.com
Web Site: www.fernhillbev.com
Twitter: @fernhillbev
Phone: (760) 613-8828

BeverageBottlingCaliforniaCarlsbadCovid19,

FernhillBeverageFHBCOTCOTCMarketsOTCPRWIRE,

OTCStocksPressReleaseSanitizer

 

RELEASE Number

8142-20

https://www.cftc.gov/PressRoom/PressReleases/8142-20

March 31, 2020

CFTC Provides Further Relief to Market Participants in Response to COVID-19

Washington, D.C. — The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) today announced that it has issued additional targeted, temporary no-action relief to foreign affiliates of certain futures commission merchants (FCMs) in response to the COVID-19 (coronavirus) pandemic. The relief expires on September 30, 2020.

“The CFTC will continue to provide targeted, temporary relief to market participants where appropriate,” said DSIO Director Joshua Sterling. “This action bolsters our efforts to facilitate orderly trading and liquidity in our derivatives markets during this volatile period. We encourage market participants to engage with the CFTC early and often as market developments continue to unfold.”

The pandemic has caused compliance with certain CFTC requirements to be particularly challenging or impossible because of displacement of personnel from normal business sites due to social distancing and other measures.  Subject to the conditions stated in the letter, the relief provided is as follows:

  • DSIO has granted temporary, targeted no-action relief to permit certain foreign affiliates of FCMs that are exempt from registration with the Commission by CFTC Regulation 30.5 to accept orders from U.S. persons for execution on U.S. contract markets in the event an affiliated FCM’s U.S. personnel are unable to handle the order flow of U.S. customers due to their absence from normal business sites. [See CFTC Staff Letter No. 20-12]

-CFTC-

 

THE 4LESS GROUP COVID-19 UPDATE

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/03/26/the-4less-group-covid-19-update/

Posted: March 26, 2020

In: AUTOMOTIVENewsroom

0

Las Vegas, NV, March 26, 2020– With the spread of COVID-19 across the U.S., Auto Parts 4Less, Inc., the wholly owned subsidiary of the 4Less Group (OTC PINK: FLES), announced their ecommerce sites are still taking orders and shipping auto parts across the country direct from their warehouse in North Las Vegas.

“Additionally, as of today, all of the manufacturers we have been representing on our ecommerce platforms are making all their parts available as well.” stated Christopher Davenport, President of Auto Parts 4Less. “We continue our daily operations of receiving, processing and shipping orders. To this end we continue to see significant sales growth on our primary website www.liftkits4less.com.

With the integration of AutoParts4Less.com to our overall operations strategy we have begun to migrate our data bases to the Google Cloud. The Google Cloud will allow us to seamlessly scale up our operations, while increasing cyber security, redundancy and overall performance and speed of our sites. We expect this project to be completed over the next week.

About The 4Less Group, Inc.:

The 4Less Group (OTC PINK: FLES) is focusing efforts and resources on building out AutoParts4Less.com in an effort to one day offer the total spectrum of auto parts including used and original equipment manufacturer (OEM) parts as well as specialty after-market parts.

Also visit: www.autoparts4Less.com as well as www.LiftKits4Less.com

CAUTIONARY DISCLOSURE ABOUT FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements, including information about management’s view of the Company’s future expectations, plans and prospects. In particular, when used in the preceding discussion, the words “believes,” “expects,” “intends,” “plans,” “anticipates,” or “may,” and similar conditional expressions are intended to identify forward-looking statements. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. Such statements are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it can give no assurance that its forward-looking statements will prove to be correct. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. Factors that could cause results to differ include but are not limited to, successful performance of internal plans, product or services development and acceptance, the impact of competitive services and pricing, or general economic risks and uncertainties. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected. The forward-looking statements in this press release are made as of the date hereof. The Company takes no obligation to update or correct (i) its own forward-looking statements, except as required by law, or (ii) those prepared by third parties that are not paid for by the Company.

For more information, contact:
Phone: 702-488-9281
Email: PR@The4LessCorp.com4

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SUCCESS ENTERTAINMENT GROUP INTERNATIONAL, INC. (SEGN) ENTERS INTO ACQUISITION LETTER OF INTENT

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/03/27/success-entertainment-group-international-inc-segn-enters-into-acquisition-letter-of-intent/

PostedMarch 27, 2020

In: NewsroomRenovable Energy

0

TAIPEI, Taiwan, March 27, 2020-The management team of Success Entertainment Group International, Inc. (OTCQB: SEGN), led by Mr. Steve Chen, is pleased to announce that SEGN has entered into a CONFIDENTIAL LETTER OF INTENT TERM SHEET for the Acquisition of Common Stock of RENAVOTIO INFRATECH, INC. (RII).

RII is a holding company focused on infrastructure opportunities including 5G, utilities, IoT, water and waste management technology and related industries. Their focus is acquiring entities providing services to commercial, industrial and municipal based clients.

The Global Infrastructure Movement is a $93 Trillion dollar industry and RII targeted acquisitions are well positioned in the Fiber Optic installation, 5G, Waste and Water sectors.

RII Senior Management Team is led by William (Billy) C. Robinson. In his 35-year career he’s served as Chairman, CEO and CFO of several public companies. Additionally he has an extensive executive level operational background in both manufacturing and technology. Mr. Robinson has initiated and completed multiple public and private transactions assisted with the sale, merger, funding and IPOs. Prior, Mr. Robinson hold management positions at Paine Webber, initiating two IPOs and served as a vice president of Prudential Securities, Inc. (NYSE:PRU)
RII’s is bringing two infrastructure companies to SEGN that had combined revenue in 2019 of nearly $5 million with an EBITDA of and anticipates 2020 gross revenues to exceed 2019 numbers with consulting/operational agreements with small towns or county COOPS that operate their own water and sewer systems, providing long term savings utilizing smart utility monitoring and dedicated engineering and service personnel. These platforms capture utility data from handheld GPS devices or in place sensors, with planned testing using drones for leak detection and topographic underground utility installation planning.

The terms of the acquisition have not been finalized, however the engagement of PCAOB auditors has been initiated and plans to up list to the NASDAQ are in place just as soon as possible. More details will be announced in the very near future all focused on bringing shareholder value.

IR Contact:
Success Entertainment Group International Inc.
www.segnusa.com
Email Contact:
info@segnusa.com
Telephone: +1(260) 490-9990

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GENTECH LAUNCHES WIDESPREAD MULTIDIMENSIONAL MARKETING CAMPAIGN FOR “SECRET JAVAS” PREMIUM SUBSCRIPTION COFFEE PRODUCT

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/03/26/gentech-launches-widespread-multidimensional-marketing-campaign-for-secret-javas-premium-subscription-coffee-product/

Posted March 26, 2020 

In CBDManufacturingNewsroom

0

NEW YORK, March 26, 2020 — GenTech Holdings, Inc. (OTC PINK: GTEH) (“GenTech” or the “Company”), an emerging leader in the high-end CBD food and drinks marketplace, is excited to announce the launch of the Company’s vast multidimensional marketing campaign, which employs lead generation, a new splash site, social media, Google AdWords, affiliate marketing, direct marketing, and the upcoming establishment of a presence on Amazon.com as an additional distribution channel for sales, all centered around the Company’s recently launched “Secret Javas” specialty subscription coffee product.

“The launch has outperformed our initial expectations, possibly in part because of an increased desire by consumers to continue to consume gourmet coffees, but to avoid gourmet coffee houses due to the coronavirus outbreak,” commented David Lovatt, CEO of GenTech. “But our strategy is built around an aggressive marketing process to build our brand and drive sales. That is starting now, with a diversified approach employing a range of coordinated processes designed to engage our target market and build a strong relationship with it.”

The Company is employing a three-pronged strategy:

  1. Using Facebook and Google AdWords to promote a new “Free Gourmet Coffee Samples” website (Wheresmyfreecoffee.com) as a lead generation device to engage consumers interested in gourmet coffee samples. This will help to build a highly relevant list of leads for the Company’s sales team to engage, providing sales and further intel about the target market and those on the list, including pricing potential, budgetary assumptions, and other vital data. This website is live now and has begun collecting user information and building a pipeline of interested customers.
  2. Working with Amazon.com to establish ecommerce and distribution through its global market-leading platform.
  3. Employing affiliate and direct marketing through its own SecretJavas.com website, which is live and servicing current customer orders around the clock.

According to a consumer survey conducted by National Coffee Association of America, the total retail value of the U.S. coffee market is estimated to be $48 billion dollars with specialty comprising approximately 55% value share. In other words, the “Specialty” category in coffee is becoming dominant in both volume and sales. Coffee is also becoming increasingly popular with younger consumers, who are more likely to adopt an online subscription consumer pattern, with the number of 18-24 year-olds who drink specialty coffee rising from 28% to 35% since 2013.

In addition, revenue in food and beverages ecommerce in the US is expected to reach $15bn by 2021, rising from $9bn in 2016. But, inside of that, Payments News reports that the approximate revenue from those who subscribe to products using the Amazon platform, rose from $2.9 billion to $11 billion from 2014 to 2018, with a significant proportion of these purchases in the grocery and gourmet food section. That’s a 260% increase over this period, which gives a strong indication of the growth wave in this segment as more and more consumers transition to ecommerce for perishable goods.

Lovatt continued, “We continue to see evidence that this premium coffee subscription market is moving into a period of accelerating boom conditions. Our initial month following launch has been a learning experience, as we knew it would. But we have now fully ironed out any remaining wrinkles in processing and shipping orders. Now is the time to stomp down on the gas pedal!”

About GenTech Holdings, Inc.:
GenTech Holdings, Inc. is a publicly traded company under the symbol GTEH. The company is creating a national chain of Hemp Centric Coffee Shop Retail Spaces where patrons can relax, drink CBD infused Teas and Coffees, try various own-brand products and experience holistic education and classes. The company is also building an extensive outreach program working with medical practitioners across the country in their own locations to educate their patients and increase awareness of the benefits of THC free CBD Products. All of this is offered under the brand ‘The Healthy Leaf’.

Forward-Looking Statements
This press release may contain forward-looking statements, including information about management’s view of GenTech, Inc.’s future expectations, plans and prospects. In particular, when used in the preceding discussion, the words “believes,” “expects,” “intends,” “plans,” “anticipates,” or “may,” and similar conditional expressions are intended to identify forward-looking statements. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of GenTech, its subsidiaries and concepts to be materially different than those expressed or implied in such statements. Unknown or unpredictable factors also could have material adverse effects on GenTech’s future results. The forward-looking statements included in this press release are made only as of the date hereof. GenTech cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, GenTech undertakes no obligation to update these statements after the date of this release, except as required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for by GenTech.

Corporate Contact:
invest@gentech.group
www.gentechholdings.com

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RELEASE Number

8141-20

https://www.cftc.gov/PressRoom/PressReleases/8141-20

March 27, 2020

CFTC Postpones March 31 Open Meeting   

Washington, D.C. — Commodity Futures Trading Commission Chairman Heath P. Tarbert today announced the open meeting scheduled for March 31 has been postponed due to the impact of COVID-19 (coronavirus).

“While the coronavirus has forced the CFTC to postpone some of its public events, the agency continues to do its work and advance policy for the benefit of all Americans,” said Chairman Tarbert. “In the last two weeks, the Commission has approved three waves of targeted relief for market participants, finalized interpretive guidance on ‘actual delivery’ of digital assets, and extended relief for initial margin requirements for uncleared swaps—all on a unanimous, bipartisan basis. We will reschedule this open meeting as soon as possible and I look forward to having—for the first time in the agency’s 45-year history—a meeting to vote on rulemakings outside of Washington later this year.”

-CFTC-

 

HOME / NEWSROOM / RESGREEN GROUP INTERNATIONAL (RGGI) ANNOUNCES NEW AUTONOMOUS MOBILE ROBOT (AMR) AND LAUNCHES NEW WEBSITE

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/03/24/resgreen-group-international-rggi-announces-new-autonomous-mobile-robot-amr-and-launches-new-website/

Posted: March 24, 2020

In: NewsroomTech

0

Elkhart, Indiana, March 24, 2020-ResGreen Group (OTC PINK: RGGI) CEO Parashar (Parsh) Patel announced today that the RGGI new and improved website has been activated for RGGI shareholders and investing public to view and stay updated with the Company’s progress.

Patel stated, “I am extremely pleased with the format and new look of our website. We will continue to add content concerning our corporate progress and advancements. I also would like to clarify that we have talked about bringing out an Automated Guided Vehicles (AGV) however, to be more precise, our first robotic vehicle is better classified as an Autonomous Mobile Robot (AMR).”

Patel continued, “The fundamental difference between AGVs and AMRs can be summed up by the difference noted between a guided vehicle and a robot. A guided vehicle follows fixed routes, usually along wires or magnets embedded in the ground — not unlike the difference between a train and an automobile. An AGV robot is probably clever enough to use simple sensors in order to avoid hitting obstacles that pop up in its way, but it’s not clever enough to go around them. In fact, AGVs aren’t clever at all — without much on-board intelligence, they can only obey simple orders. This means that AGV robots tend to get into trouble when anything isn’t exactly the way they like it. This is in addition to their notorious reputation when it comes to adapting to change. If you want them to expand their work area, for example, it’s an expensive and time-consuming hassle.

A robotic AMR is much more sophisticated. It’s packed with sensors and powerful on-board computers that help it to understand its operating environment.

An AMR is much more sophisticated. It’s packed with sensors and powerful on-board computers that help it to understand its operating environment. Rather than being restricted to fixed routes, an AMR can instead navigate dynamically using a map, allowing it to plan its own paths and travel quickly and efficiently. AMRs are smart enough to recognize and react to people, cars, forklifts, and more. They safely perform their jobs no matter how busy the surrounding environment and can even do futuristic things like following a specific person wherever they need to go, mother duck-like.”

“We have made great strides over the last couple of weeks and are on track for the launch of our first AMR, (on the concrete) by early to mid-summer. Please visit our new and exciting website at http://resgreenint.com/ to stay informed of our progress and industry updates”, Patel concluded.
The overall robotic industry is expected to grow from USD 2.0 billion in 2019 to USD 2.9 billion by 2024 at a CAGR of 7.8%. More information can be found at:

https://www.marketsandmarkets.com/Market-Reports/automated-guided-vehicle-market-27462395.html?gclid=CjwKCAiA3uDwBRBFEiwA1VsajA37Sm51oAOKal2ptATWn0Dvzzpqmw0VloUrbN1BiKihtFADkrwxxBoCVuIQAvD_BwE

ABOUT RESGREEN GROUP INTERNATIONAL, INC.:
RGGI is using certain Know-how and Intellectual Property (IP) that it possesses and looks to acquire and develop components for material handling logistics and certain Automatic Guided Vehicles (AGV) and mobile technologies.

RGGI’s highly skilled engineers have years of professional engineering experience in this space and plans to remain focused and highly motivated to execute on its business strategy to develop certain Autonomous Mobile Robots (AMR).

Safe Harbor:
This press release contains statements, which may constitute “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of ResGreen Group International Inc. with members of its management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully and the ability to complete before-mentioned transactions. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

Contact:
ResGreen Group International, Inc.
Parashar (Parsh) Patel, President and CEO
Email: info@resgreenint.com

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HOME / NEWSROOM / GREENE CONCEPTS FINALIZES FIRST PURCHASE ORDER FOR THE BE WATER BRAND WITH THE SANTA ROSA BAND OF CAHUILLA INDIANS

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/03/25/greene-concepts-finalizes-first-purchase-order-for-the-be-water-brand-with-the-santa-rosa-band-of-cahuilla-indians/

Posted: March 25, 2020

In: Newsroom

0

Marion, NC – March 25, 2020 — Greene Concepts Inc. (OTC PINK: INKW) is pleased to announce it has recently signed a purchase order agreement with the Santa Rosa Band of Cahuilla Indians’ Pit Stop gas station and convenience store. This purchase order agreement serves as the first sales purchase order for Greene Concepts’ BE WATERTM bottled water brand.

In collaboration with Sunflower Consulting Group (SCG), Greene Concepts recently reached an agreement with the Santa Rosa Band of Cahuilla Indians, out of Mountain Center, California, to offer its’ BE WATERTM within the soon-to-open Santa Rosa Pit Stop gas station and convenience store. The station, set to open late-April of 2020, will be located 1 ½ miles east of Bull Canyon Road on the south side of the highway 74. The convenient store offers shoppers a fresh experience along with modern amenities and room for future expansion. According to the National Association of Convenience Stores, an industry advocacy group, over the past decade convenience chains have increased sales inside their stores around 30%.

The convenient store will serve as a modern travel station with plenty of amenities to benefit the local community. The convenient store will also serve the numerous commuters passing along the Santa Rosa reservation on highway SR 1-74. According to the California Department of Transportation’s 2017 traffic volumes (see here), the area near SR I-74 and SR 371 receives an average daily traffic count of 3,450 vehicles with SR I-74 and SR 111 at Palm Desert reporting an average daily traffic count of 19,300 vehicles. Multiple visitors will have the opportunity to frequent the Santa Rosa Pit Stop and receive goods and services. According to a local newspaper (Idyllwild Town Crier) in its October 22, 2019 edition, a recent feasibility study reported positive outcomes for commuters to and from the desert area along with the surrounding community.

The new Santa Rosa Pit Stop gas station embodies one of the local area expansion projects which also includes a 28,000 square foot local park, a first of its kind, on the reservation. Sales of the BE WATERTM brand along with other convenient store items assists the Santa Rosa Band of Cahuilla Indian tribe with an additional revenue stream to allow the tribe to expand its assistance to tribal members to include infrastructure expenses, basic housing and educational needs for tribal members on and off the reservation.

The Santa Rosa Pit Stop manager Ray Suarez notes, “Ours is the first store in the country to carry the BE WATERTM brand. We are proud to ‘Be First’ in this operational venture and look forward to sharing a wonderful product with not only the citizens of the Santa Rosa Band of Cahuilla Indians but also to all of the visitors who frequent our convenience store to enjoy a refreshing product that is both unique and of great quality.

A collective quote from the tribal board conveys, “We have deep roots in our environment and great respect for the forces of nature that surround us. Water is one of the world’s greatest forces and we are proud to see that Greene Concepts has not only turned this great force into an essence of purity but that they have offered a name to the product that enhances man’s inner soul, “BE WATERTM”. Be Generous, Be Kind, Be Strong, Be Courageous, Be Caring, Be Yourself….those traits described on the BE WATERTM label are a strong reminder to find that inner joy toward spiritual transformation. We are proud to take this next step with a company that cares so much about our way of life and intent on capturing a piece of our native spirit within its daily operations and strategic plans morally, ethically and operationally.”

Lenny Greene, CEO of Greene Concepts Inc. states, “We are extremely happy to announce that the first sales of our BE WATERTM brand is with the Santa Rosa Cahuilla Indian tribe. They embody the traits of our BE WATERTM product, Be Strong, Be Generous, Be Caring, Be Courageous. The tribal board leaders of the Santa Rosa Band of Cahuilla Indians embody these traits through the work of successful alliances, a focus on sustainable housing and infrastructure for tribal members, economic development, charitable works, the support of its youth, tribal health, tribal longevity and tribal wellness.”

Mr. Greene continues, “The strength of the Santa Rosa Band of Cahuilla Indians is second-to-none and an inspiration for us all. It is truly an honor to have our BE WATERTM brand associated within a community of such positive influence politically, economically and environmentally. I am particularly glad to see the community focused on environmental health to include the preservation of natural resources and the local support of Earth Day. My hope is to continue to expand the partnership between Greene Concepts and the Santa Rosa Band of Cahuilla Indians in support of sustainable positive change, increased recognition of the wonderful people of the Santa Rosa Band of Cahuilla Indians to include the tribe’s customs and traditions, and also the continued recognition and growth of our BE WATERTM brand across the southwest United States.”

About Santa Rosa Band of Cahuilla Indians

The Santa Rosa Indian Reservation is in Riverside County, between Palm Springs and Anza, and occupies 11,021 acres of land. The Reservation is composed of four non-contiguous parcels; the largest being in the area of Sew’ia, or New Santa Rosa (Vandeventer Flat) where residents of the Reservation reside. The three remaining parcels, which include Toro Peak where the Tribe operates a telecommunications relay station, are located east of the main parcel. Elevation ranges from 4,200’ elevation at Sew’ia (Cahuilla name for “New” Santa Rosa) to 8,700’ elevation at Toro Peak. Currently, there are 139 recognized Tribal Members (18 and over). Approximately 70 individuals live on the Reservation. The General Council (which consists of adult members 18 years of age and older) elects a Tribal Council for two-year terms. The Tribal Council consists of a Chair, Vice-Chair, Secretary, Treasurer and three Council members. The people of Sew’ia are one of eight Cahuilla Bands which include Cahuilla, Ramona, Los Coyotes, Torres-Martinez, Augustine, Cabazon, Agua Caliente, and Morongo. The Santa Rosa Reservation was established on February 2, 1907, under authority of the Act of 1891 as amended. The Act of April 17, 1937 authorized the Secretary of Interior to purchase 640 acres to be held in trust for the Tribe. All reservation land is tribally owned and un-allotted, though some of the land is under assignment and has been passed from generation to generation.
https://santarosacahuilla-nsn.gov/

About Sunflower Consulting Group

Sunflower Consulting Group (SCG), founded by Harold Wingert, specializes in all aspects of convenience store operations: consulting, store design, operational set up and ramp up, controls, inventory, and vendor contracts. Since 1985, when Mr. Wingert bought his first store, he has been engaged in the industry in some fashion, including operations, consulting, construction, and design. Over the last 34 years he has owned and operated 8 stores, successfully sold them, and has been consulting for the past decade. SCG has the team in place to provide the level of support you desire, from concept design, through opening the store, and establishing policy and procedures. SCG will work with vendors to achieve optimal sales and manage vendor contracts to take advantage of rebates or other incentives, which will result in more profits for ownership. SCG will assist ownership in hiring and training employees, continuing education, benefits package for management, and will assist in developing an employee manual. Sunflower Consulting Group looks forward to working with you to bring your concept to reality.

https://sunflowerconsultinggroup.com/

About Greene Concepts, Inc. and Mammoth Ventures Inc.

Greene Concepts, Inc. (http://www.greeneconcepts.com) is a publicly traded company. Through its recently acquired wholly owned subsidiary, Mammoth Ventures Inc., the Company has entered the specialty beverage and bottling business and is an emerging leader in the global scientifically formulated beverage industry.

Safe Harbor: This Press Release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of uncertainties and risks that could significantly affect the company’s current plans and expectations, as well as future results of operations and financial condition. A more extensive listing of risks and factors that may affect the company’s business prospects and cause actual results to differ materially from those described in the forward-looking statements can be found in the reports and other documents filed by the company with the Securities and Exchange Commission and OTC Markets, Inc. OTC Disclosure and News Service. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT:
Greene Concepts, Inc.
Investor Relations
info@inkwayusa.com

Lenny Greene
lenny@greeneconcepts.com
559-434-1000

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HOME / MANUFACTURING / GREENE CONCEPTS ANNOUNCES STRATEGIC PARTNERSHIP WITH SUNFLOWER CONSULTING GROUP TO EXPAND SALES INTO MULTIPLE MARKET OUTLETS FOR THE BE WATER BRAND

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/03/24/greene-concepts-announces-strategic-partnership-with-sunflower-consulting-group-to-expand-sales-into-multiple-market-outlets-for-the-be-water-brand/

Posted: March 24, 2020

InManufacturingNewsroom

0

Marion, NC – March 24, 2020- Greene Concepts Inc. (OTC PINK: INKW) is pleased to announce it has recently signed an agreement with Sunflower Consulting Group (SCG) to further position itself to be a leading bottled water and beverage provider. SCG specializes in all aspects of convenience store operations. This strategic partnership with SCG promotes increased awareness and sales of the company’s initial product release, BE WATERTM, to a nationwide audience.

In the most recent press release (here), two prominent food and beverage sales executives recently toured the Greene Concepts’ bottling plant and conveyed great exuberance with the company’s design, mission, vision, location and future plans. One of those sales executives is the owner and founder of SGC, Mr. Harold Wingert. This strategic partnership aligns the company with one of the nation’s foremost authorities on convenient store operations and opens the door for greater market penetration. SGC brings 34 years of convenient store experience to a strategic partnership.

Harold Wingert, founder and CEO of Sunflower Consulting Group suggests, “We are delighted to partner with Greene Concepts as we help to position them for great success in showcasing their BE WATERTM brand to fill the gap of a wide audience. Our connections into the proper market channels will help Greene Concepts achieve their strategic objectives and positions them in procuring purchase orders to share the BE WATERTM brand across the nation resulting in greater profits and maximized consumer value.”

Lenny Greene, CEO of Greene Concepts Inc. states, “We are thrilled to have finalized an agreement with Sunflower Consulting Group and leveraging their experience and relationships within the food and beverage marketplace. SCG relentlessly pursues the best value for Greene Concepts in all areas and connects us to key industry leaders to establish our newly launched BE WATERTM brand in front of the masses so we can meet the growing need of consumers who desire healthy lifestyle choices. Stay tuned for upcoming sales and purchase order announcements of the BE WATERTM brand.”

About Sunflower Consulting Group

Sunflower Consulting Group (SCG), founded by Harold Wingert, specializes in all aspects of convenience store operations: consulting, store design, operational set up and ramp up, controls, inventory, and vendor contracts. Since 1985, when Mr. Wingert bought his first store, he has been engaged in the industry in some fashion, including operations, consulting, construction, and design. Over the last 34 years he has owned and operated 8 stores, successfully sold them, and has been consulting for the past decade. SCG has the team in place to provide the level of support you desire, from concept design, through opening the store, and establishing policy and procedures. SCG will work with vendors to achieve optimal sales and manage vendor contracts to take advantage of rebates or other incentives, which will result in more profits for ownership. SCG will assist ownership in hiring and training employees, continuing education, benefits package for management, and will assist in developing an employee manual. Sunflower Consulting Group looks forward to working with you to bring your concept to reality.

https://sunflowerconsultinggroup.com/

About Greene Concepts, Inc. and Mammoth Ventures Inc.
Greene Concepts, Inc. (http://www.greeneconcepts.com) is a publicly traded company. Through its recently acquired wholly owned subsidiary, Mammoth Ventures Inc., the Company has entered the specialty beverage and bottling business and is an emerging leader in the global scientifically formulated beverage industry.

Safe Harbor: This Press Release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of uncertainties and risks that could significantly affect the company’s current plans and expectations, as well as future results of operations and financial condition. A more extensive listing of risks and factors that may affect the company’s business prospects and cause actual results to differ materially from those described in the forward-looking statements can be found in the reports and other documents filed by the company with the Securities and Exchange Commission and OTC Markets, Inc. OTC Disclosure and News Service. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT:
Greene Concepts, Inc.
Investor Relations
info@inkwayusa.com

Lenny Greene
lenny@greeneconcepts.com
559-434-1000

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HOME / NEWSROOM / SANWIRE CORPORATION ANNOUNCES ACQUISITION CLOSING OF INTERCEPT MUSIC, INC.

https://otcprwire.com/2020/03/24/sanwire-corporation-announces-acquisition-closing-of-intercept-music-inc/

NEWS VIA: OTC PR Wire

Posted: March 24, 2020

In: Newsroom

0

Los Angeles, CA, March 24, 2020 – Sanwire Corporation (“Sanwire” or the “Company”) (OTC PINK: SNWR), a diversified company with a focus on the entertainment industry, is pleased to announce that it has completed its due diligence process to acquire Intercept Music, Inc. (“Intercept”) and has executed the final acquisition agreement to acquire 100% of Intercept.

Intercept (www.interceptmusic.com) is an online platform that allows any of the 10+ million independent musicians to upload their music, distribute and collect royalties from over 100 retailers such as Spotify, iTunes, Pandora, Amazon, and Google in 165 countries. The software automatically promotes artists’ entire business, including their music, merchandise and performances in social media, playlists and even online radio. Artists can also track sales, monitor their marketing success, get state of the art analytics, and advice from experts. Intercept is a pioneer in online music social media marketing and distribution.

“This acquisition has been in the making for a number of months,” said Tod Turner, CEO of Intercept Music. “During that time, we’ve seen the music business continue to grow while artists become more disenfranchised and the services they need more fragmented. When you add distribution, social media marketing, advertising, playlists, radio, licensing, booking and merchandise, and couple it with managing multiple revenue streams, there simply isn’t enough time to learn this and still make great music. This merger allows us to expand quickly to solve this problem so artists and bands can get back to what they do best – making music.”

“We are very excited that we have closed on our acquisition of Intercept,” Mr. Whitcomb said. “We can now focus our efforts on this exciting industry, bringing in a team of seasoned professionals to greatly expand the business and shareholder value.”

About Intercept Music, Inc.
Intercept Music is a technology company with the soul of an artist. In the crowded music marketplace today, 12 million artists are competing for fans and audiences that have almost unlimited access to music, whether from streaming services or online retailers. Intercept’s software platform delivers an unsurpassed combination of distribution, marketing and expert coaching, empowering artists to connect with new audiences, measure their results and distribute and monetize their music like never before. For more information, please visit us at interceptmusic.com.

About Sanwire Corporation
Sanwire has been involved in aggregating technologies for a number of years. We look for opportunities in fragmented markets, where technology can be applied to consolidate services into a single platform of delivery. Our current focus is advanced entertainment technologies. For more information, please visit us at sanwirecorporation.com.

Safe Harbor Statement: Forward-Looking Statements are included within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Act of 1934, as amended. All statements regarding our expected future financial positions, results of operations, cash flows, financing plans, business strategy, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, listing on the OTC Markets, including words such as “anticipate,” “if,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “will,” and other similar expressions are forward-looking statements and involve risks, uncertainties, and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

For further inquiries, please contact ir@sanwirecorporation.com and tod.turner@interceptmusic.com

CaliforniaEcommerceEntertainmentInterceptMusic,

LosAngelesMusicMusicIndustryOnlineOTCOTCMarkets,

OTCPRWIREOTCStocksPressReleaseSanwireSNWR

 

RELEASE Number

8138-20

https://www.cftc.gov/PressRoom/PressReleases/8138-20?utm_source=govdelivery

March 24, 2020

ICYMI: Chairman Tarbert in WSJ: Volatility Ain’t What It Used to Be

“[F]ar from amplifying risk throughout the financial system, the derivatives markets have so far acted as shock absorbers. Unlike during the 2008 financial crisis, derivatives have internalized the impact of market swings. And while no one can predict the future, derivatives markets have been resilient in part because the Commodity Futures Trading Commission has deployed tools to help prevent financial contagion.

“One important remedy in the CFTC’s medicine cabinet is a post-2008 requirement that derivatives traders post margin for their swap positions … The CFTC’s swap margin rules are important because they remove the guesswork about who is solvent, marking a critical distinction from 2008 … That is a very good thing for financial health and stability, as derivatives markets are much larger now than they were in 2008. Approximately 60 million futures contracts were traded during the past two weeks, compared with fewer than 15 million during the financial crisis.

“The CFTC’s margin rules are aided by real-time monitoring and risk-based trading limits. These requirements, coupled with modern technology, make it easier for market participants to raise collateral quickly to satisfy margin calls before defaults happen. The data bear this out: Between February 24 and March 14, a record $54 billion in margin was posted to derivatives clearinghouses, and the financial system handled these payments without incident.

“And the CFTC is looking to establish even more financial safeguards. Recently proposed amendments to swap data reporting rules would for the first time require the reporting of margin and collateral data for uncleared swaps. If adopted, this proposal will significantly strengthen the CFTC’s ability to monitor for systemic risk in uncleared swaps markets.

“Volatility can be challenging for markets and the Americans who rely upon them. But this isn’t 2008: The CFTC has a robust tool kit to help market participants manage risk and prevent financial contagion.”

Read full op-ed here.

-CFTC-

 

NOVO INTEGRATED SCIENCES PROVIDES BUSINESS IMPACT OF COVID-19 PANDEMIC

https://otcprwire.com/2020/03/20/novo-integrated-sciences-provides-business-impact-of-covid-19-pandemic/

NEWS VIA: OTC PR Wire

Posted: March 20, 2020

In: HealthcareHEMPNewsroom

0

BELLEVUE, Wash., March 20, 2020 — Novo Integrated Sciences, Inc. (OTCQB: NVOS) (“Novo Integrated Sciences” or “the Company”) announces precautionary measures the Company is taking to protect the health and safety of its employees, partners and patients as well as the business impact related to the COVID-19 pandemic.

Because COVID-19 infections have been reported throughout both Canada and the United States, certain national, provincial, state and local governmental authorities have issued proclamations and/or directives aimed at minimizing the spread of COVID-19. Additional, more restrictive proclamations and/or directives may be issued in the future. As a result, Novo Healthnet Limited, a wholly owned Canadian subsidiary of the Company, has closed ALL corporate clinics, effective March 17, 2020. In addition, we are significantly reducing the engagement of our multi-disciplinary primary healthcare services and products with our client patients as provided through contracted services with eldercare centric facilities and our affiliate clinics.

Mr. Robert Mattacchione, Novo Integrated Sciences’ CEO and Board Chairman, stated, “The health and safety of our Company’s employees, partners, patients, and the families of all in our community is of paramount importance to us. We are committed to improving public health, and during extraordinary times like these, we need to take appropriate actions that may help flatten the infection curve and reduce risk in vulnerable populations.”

The ultimate impact of the COVID-19 pandemic on our operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or we, may direct, which may result in an extended period of continued business disruption, reduced patient traffic and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time, but is anticipated to have a material adverse impact on our business, financial condition and results of operations.

About Novo Integrated Sciences, Inc.
Through Novo Healthnet Limited (“NHL”), our wholly owned Canadian subsidiary, we deliver multi-disciplinary primary healthcare to over 400,000 patients annually through our 16 corporate-owned clinics, a contracted network of 103 affiliate clinics and 222 eldercare centric homes located across Canada. Our team of practitioners and staff are trained for assessment, diagnosis, treatment, pain management, rehabilitation and primary prevention. Our specialized services and products include physiotherapy, chiropractic care, occupational therapy, eldercare, laser therapeutics, massage therapy, acupuncture, chiropody, neurological functions, kinesiology, concussion management and baseline testing, women’s pelvic health, sports medicine therapy, assistive devices and private personal training. We do not provide primary care medical services, none of our employees practices primary care medicine, and our services do not require a medical or nursing license.

As we continue to build our health science platform of services and products through the integration of technology and rehabilitative science, one component of our lateral business growth strategy includes developing business units centered on the direct control of the grow, extraction, manufacturing and distribution processes for hemp and medical cannabidiol products. Additionally, we continue to expand on our patient care philosophy of maintaining an on-going continuous connection with our patient community, beyond the traditional confines of a clinic, by extending oversight of patient diagnosis, care and monitoring, directly into the patient’s home, through various mobile telemedicine and diagnostic tools.

For more information concerning Novo Integrated Sciences, please visit www.novointegrated.com. For more information on NHL, please visit www.novohealthnet.com.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by words such as “believe,” “expect,” “anticipate,” “plan,” “potential,” “continue” or similar expressions. Such forward-looking statements include risks and uncertainties, and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties are discussed in Novo Integrated Sciences’ filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond Novo Integrated Sciences’ control which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects Novo Integrated Sciences’ current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. Novo Integrated Sciences assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

The contents of any website referenced in this press release are not incorporated by reference herein.
COVID19
Chris David, President
Novo Integrated Sciences, Inc.
cdavid@novointegrated.com
(206) 617-9797

CanadaCannabidiolCovid19HealthcareHealthClinicsHempNovoHealthnetLimited,

NovoIntegratedSciencesNVOSOTCOTCMarketsOTCPRWIREOTCStocks,

PressReleaseUSWashington

 

IMMUNE THERAPEUTICS, INC. TO COLLABORATE WITH CYTOCOM, INC. TO DEVELOP THERAPIES FOR COVID-19. IMMUNE THERAPEUTICS, INC. SIGNS BINDING LETTER OF INTENT TO COLLABORATE WITH CYTOCOM, INC. TO DEVELOP LODONAL™ AND OTHER DRUGS FOR COVID-19; OTHER DRUG DEVELOPMENT PROGRAMS ALSO MOVING FORWARD

https://otcprwire.com/2020/03/20/immune-therapeutics-inc-to-collaborate-with-cytocom-inc-to-develop-therapies-for-covid-19-immune-therapeutics-inc-signs-binding-letter-of-intent-to-collaborate-with-cytocom-inc-to-develop-lod/

NEWS VIA: OTC PR Wire

Posted: March 20, 2020

In HealthcareNewsroom

0

ORLANDO, Florida, March 20, 2020 – Immune Therapeutics, Inc. (OTC PINK: IMUN) (“Immune” “IMUN” or the “Company”), Immune Therapeutics, Inc., a late-stage clinical biopharmaceutical company focused on the development and commercialization of highly innovative therapies for use in oncology, immunology and anti-inflammatory disease today announced the signing of a binding letter of intent to collaborate with Cytocom, Inc. (“Cytocom” or “CYTO”) for the development of Lodonal™ and IRT-101 for use against COVID-19, the disease caused by the new corona virus originating from Wuhan, China which is also called 2019-nCoV.

Immune Therapeutics and Cytocom are planning to work with federal agencies to seek fast-track approval using Lodonal™ as a way to prevent or treat COVID-19 in high-risk groups who are infected with 2019-nCoV at clinical research centers across the country. IMUN is currently designing studies using Lodonal™ and IRT-101 as a monotherapy or in conjunction with other potential treatments.

According to a press briefing on Thursday, March 19th President Donald Trump along with the FDA Commissioner Dr. Stephen Hahn and the U.S. Corona Virus Task Force Team announced that to help speed up the pace of testing drugs that could help treat the symptoms of COVID-19, they have directed the Food and Drug Administration to “Eliminate outdated rules and bureaucracy so work can proceed rapidly, quickly and fast…we have to remove every barrier.” Immune and Cytocom believes that this will fast track the approval process.

Bob Buckheit, PhD, CEO of ImQuest Life Sciences and a member of the scientific advisory board of IMUN stated “While research on specific direct-acting antiviral drugs to treat 2019-nCoV is accelerating, the need for the evaluation of host-directed therapies are also urgently needed. In several clinical studies, Lodonal™ has been shown to modulate immune system function by decreasing elevated inflammatory responses associated with viral infections like HIV and H1N1 Influenza. Thus, there is a compelling biomedical rationale to test Lodonal™ both as a therapeutic intervention for COVID-19 infection in patients and as a prophylactic agent to attenuate the spread of the disease. ImQuest is uniquely posited to work with Immune and Cytocom on this project. “

“COVID-19 threatens the health and lives of the elderly, immune-compromised and those with underlying health concerns. Immune Therapeutics is initiating a series of studies while seeking regulatory guidance for fast-track designation and approval of Lodonal™ for COVID-19 during this national emergency,” stated Roscoe Moore, Jr., D.V.M, M.P.H, Ph.D., D.Sc., Former U.S. Assistant Surgeon General, who serves on the Board of Advisors for the Institute of Human Virology, University of Maryland Medical School and is the Chairman of Board of Immune Therapeutics, Inc.
Michael K. Handley, CEO of Immune Therapeutics, Inc. said, “We have known that Lodonal™ has demonstrated efficacy in the treatment of a variety of viruses. Specifically, we have seen anti-viral effects from Lodonal™ and IRT-101 in HIV patients. Clinical data has shown that Lodonal™ and IRT-101 decreases the replication of the H1N1 influenza virus. We believe the same mechanism of action of modulating the immune system function, while also decreasing inflammation, will work well to mitigate the spread of COVID-19 in addition to treating those who are already infected. We are excited to partner with Cytocom to help bring this much needed therapy to stem the COVID-19 pandemic.”

Immune Therapeutics is also in the process of finalizing its development program for ITX401 for pancreatic cancer. IMUN anticipates submitting a request in April for a Type C meeting with the FDA to discuss the phase III clinical program for ITX401 treatment of pancreatic cancer. IMUN also expects to initiate testing on the use of Lodonal™ and ITX401 with other approved cancer drugs like Keytruda® and Opvido® in partnership with CYTO to determine the probability of enhancing the safety and efficacy of these already approved cancer drugs.
About Immune Therapeutics, Inc.:

Immune Therapeutics, Inc. is a late-stage clinical biopharmaceutical company focused on the development and commercialization of highly innovative therapies for use in oncology, immunology and anti-inflammatory disease. Immune Therapeutics is actively developing T-cell activation immunotherapies in combination with other drug candidates to achieve immunomodulation in patients with cancer, auto-immune disease and inflammatory diseases.

About Cytocom, Inc.:

Cytocom, Inc is a private late-stage biopharmaceutical company focused on the development of T-cell activation immunotherapy, to treat life-threatening infections, representing a fundamentally new treatment approach in the infectious disease and autoimmune market that are designed to overcome key issues associated with current therapies, including serious adverse events (“SAE”), drug resistance, short duration of response, negative impact on the human microbiome, and lack of differentiation between treatment alternatives.

About ImQuest Life Sciences, Inc.:

ImQuest Life Sciences, Inc. is a leading drug discovery and development company with a highly focused strategy of developing a proprietary portfolio of novel therapeutic agents to target infectious disease and cancer. Our business model is to commercialize exciting new drugs with unique mechanisms of action both independently as well as in partnership with other pharmaceutical companies.

The ImQuest Life Sciences pipeline includes exclusive licenses to highly potent compounds for the treatment of Human Immunodeficiency Virus (HIV), Hepatitis B and Hepatitis C Virus (HBV, HCV), Influenza, including Drug- and Antibiotic-Resistant Microorganisms, and Cancer. They are strategically developing Topical Microbicides to prevent the transmission of HIV and other Sexually Transmitted Infectious (STI) organisms.

About Global Viral Network of the Institute of Human Virology at the University of Maryland School of Medicine:

The Institute of Human Virology (IHV) is the first center in the United States—perhaps the world—to combine the disciplines of basic science, epidemiology and clinical research in a concerted effort to speed the discovery of diagnostics and therapeutics for a wide variety of chronic and deadly viral and immune disorders, most notably HIV, the cause of AIDS.

Formed in 1996 as a partnership between the State of Maryland, the City of Baltimore, the University System of Maryland and the University of Maryland Medical System, IHV is an institute of the University of Maryland School of Medicine and is home to some of the most globally-recognized and world-renowned experts in the field of human virology.

FORWARD LOOKING STATEMENTS
This release may contain forward-looking statements. Actual results may differ from those projected due to a number of risks and uncertainties, including, but not limited to, the possibility that some or all the matters and transactions considered by the Company may not proceed as contemplated, and by all other matters specified in the Company’s filings with the Securities and Exchange Commission. These statements are made based upon current expectations that are subject to risk and uncertainty. The Company does not undertake to update forward-looking statements in this news release to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information. Assumptions and other information that could cause results to differ from those set forth in the forward-looking information can be found in the Company’s filings with the Securities and Exchange Commission (www.sec.gov), including its recent periodic reports.

Contact:
Immune Therapeutics:
Michael K. Handley
(888) 613-8802 Ext. 100
www.immunetherapeutics.com

 

RELEASE Number

8136-20

https://www.cftc.gov/PressRoom/PressReleases/8136-20

March 20, 2020

CFTC Issues Third Wave of Relief to Market Participants in Response to COVID-19

Washington, D.C. — The Commodity Futures Trading Commission today announced that in response to the COVID-19 (coronavirus) pandemic, the Division of Swap Dealer and Intermediary Oversight (DSIO) has issued two additional no-action letters providing temporary, targeted relief to a large U.S. bank that helps finance America’s oil and gas sector and to those who operate commodity-focused investment funds the CFTC regulates.

“End users involved in energy exploration and production are facing unique challenges, and the CFTC is committed to providing targeted relief, where appropriate, that helps these companies weather volatile market conditions,” said CFTC Chairman Heath P. Tarbert. “We are also taking additional steps to provide flexibility for investment funds by granting temporary relief from certain reporting requirements that have become challenging to meet under the present circumstances.”

“During these difficult times, the CFTC remains squarely focused on our mission to promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound regulation,” added Chairman Tarbert. “I want to encourage market participants to engage with the CFTC early and often as market developments continue to unfold.”

Subject to the conditions stated in the letters, the relief provided is as follows:

  • Relief for an Insured Depository Institution Permitting Certain Commodity Swaps to be Excluded in the Major Swap Participant Registration Threshold Calculation. DSIO has granted temporary, targeted no-action relief to a major insured depository institution (IDI) from considering energy-related commodity swaps in determining whether such institution must register with the CFTC as a major swap participant (MSP). The unprecedented drop in global demand for crude oil as a result of the COVID-19 pandemic, followed closely by the OPEC+ supply cut disagreement, has resulted in the price of crude oil decreasing dramatically year to date.  Due to the nature of the IDI’s lending and risk management business with energy exploration and production (E&P) customers, the volatility and low oil prices associated with these events have led to an unprecedented increase in the IDI’s measures relevant to the MSP registration threshold. [See CFTC Staff Letter No. 20-10]
  • Relief for Commodity Pool Operators. DSIO has granted temporary, targeted no-action relief to (Commodity Pool Operators) CPOs from certain reporting requirements. The relief issued by DSIO pertains to the filing deadlines for Form CPO-PQR, Pool Annual Reports, and Pool Periodic Account Statements. [See CFTC Staff Letter No. 20-11]

-CFTC

RELATED LINKS

CFTC Staff Letter 20-10

CFTC Staff Letter 20-11

 

SINGLEPOINT LAUNCHES NEW CORPORATE WEBSITE AND CORPORATE VIDEO – PROVIDES UPDATE ON KLEN HANDS HAND SANITIZER INITIAL ORDERS

https://otcprwire.com/2020/03/19/singlepoint-launches-new-corporate-website-and-corporate-video-provides-update-on-klen-hands-hand-sanitizer-initial-orders/

NEWS VIA: OTC PR Wire

Posted: March 19, 2020

In: BiotechnologyCBDHEMPNewsroom

0

Phoenix, Arizona – SinglePoint Inc. (OTCQB: SING) launches new corporate website highlighting and featuring the company’s core business entities including an updated corporate video.

https://www.singlepoint.com/investing/ – The video provides an overview and outlook for 2020.

Successful Pre-launch generating orders of Klen Hand Sanitizer with Moisturizing Hemp Seed Oil
Klen Hands: Home Page. In the first few days the company has received multiple pre-orders that continue to grow each day and has been contacted by distributors and accounts interested in an additional hand sanitizer line. We are in discussions with buying groups and distributors seeking a hand sanitizer to meet existing consumer demand throughout convenience stores, bodegas and other outlets in need of the product. SinglePoint plans to expand its offering based on initial feedback and orders, including additional sizes of the Klen Hand Sanitizer product. We are also exploring the addition of a liquid handwash to the Klen product line. We believe Klen is uniquely positioned to capture initial shelf space into retail establishments that are carrying CBD/Hemp consumer goods. The company is strategically focusing on leveraging our existing distributors that are already carrying SinglePoint 1606 Hemp Products or other related products.

“It is extremely beneficial that we have a manufacturing facility already making other CBD/Hemp products and it has relationships with multiple suppliers that allow for rapid development and the ability to quickly “go to market” with innovative products that can meet market and consumer demand. The Klen product line of CBD/Hemp infused hand sanitizer has the potential to capture available shelf space in the hand sanitization category and should become a permanent addition for retailers looking to provide additional incremental differentiated consumer products”, states Greg Lambrecht CEO SinglePoint.

Klen is currently being produced in SinglePoints’ Carlsbad facility and will ship directly to your location. Orders will be fulfilled in the order they are received.

About SinglePoint, Inc.:
Founded in 2011 SinglePoint, Inc (OTCQB: SING) invests in and acquires brands and companies that will benefit from injection of growth capital and the sales and marketing expertise of SinglePoint. The company portfolio currently includes solar, hemp and technology applications. SinglePoint is working to grow the company to a multinational brand.

Connect on social media at:
https://www.facebook.com/SinglePointMobile
https://twitter.com/_SinglePoint
https://www.linkedin.com/company/singlepoint
https://www.youtube.com/user/SinglePointMobile
For more information visit: www.SinglePoint.com

Forward-Looking Statements
Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the Company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.

Technical complications, which may arise, could prevent the prompt implementation of any strategically significant plan(s) outlined above. The Company undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.

Corporate Communication
SinglePoint Inc.
888-OTC-SING
investors@singlepoint.com
www.singlepoint.com

 

RELEASE Number

https://www.cftc.gov/PressRoom/PressReleases/8133-20

8133-20

March 17, 2020

CFTC Issues Second Wave of Relief to Market Participants in Response to COVID-19  

Washington, D.C. — The Commodity Futures Trading Commission today announced the Division of Market Oversight (DMO) has issued three no-action letters providing temporary, targeted relief to swap execution facilities (SEFs) and certain designated contract markets (DCMs) in response to the COVID-19 (coronavirus) pandemic.

The spread of coronavirus has caused compliance with certain CFTC requirements to be particularly challenging or impossible because of displacement of personnel from normal business sites due to social distancing and other measures.

“These prudent, targeted, and temporary actions will help facilitate orderly trading and liquidity in our derivatives markets. The CFTC remains squarely focused on promoting their integrity, resilience, and vibrancy through sound regulation,” said CFTC Chairman Heath P. Tarbert. “At my direction, the CFTC has pivoted our approach to take this challenge head on and we have dedicated appropriate resources to adapt to market developments. I thank DMO Director Dorothy DeWitt and her staff for their expeditious development of this relief.”

Subject to the conditions stated in the letters, the relief provided is as follows:

Relief for Swap Execution Facilities. DMO has granted temporary, targeted no-action relief to SEFs from CFTC regulations requiring recording of oral communications related to voice trading and other telephonic communications that will make them unable to comply with certain audit trail requirements, recordkeeping requirements related to maintaining a complete audit trail, and monitoring requirements related to audit trail reconstruction. This relief expires on June 30, 2020. Because SEFs have reprioritized and reallocated personnel that otherwise would have been involved in the preparation and submission of reports such as the annual compliance report, DMO will provide an extension of the time to submit filings in order to allow SEFs to continue to focus on supporting orderly and resilient markets while implementing recommended practices to curtail the spread of COVID-19. [See CFTC Letters No. 20-07 and 20-08]

Relief for Designated Contract Markets. DMO has granted temporary, targeted no-action relief to certain DCMs from audit trail and related requirements. This relief was necessary due to the displacement of market participants, such as floor brokers, from trading floors and other designated premises from which they may enter orders. This relief expires on June 30, 2020.  [See CFTC Letter No. 20-09]

-CFTC-

 

LIFE ON EARTH, INC. ANNOUNCES UPDATE TO SHAREHOLDERS

https://otcprwire.com/2020/03/18/life-on-earth-inc-announces-update-to-shareholders/

NEWS VIA: OTC PR Wire

Posted: March 18, 2020

In: Newsroom

0

New York, New York-March 18, 2020–Life on Earth, Inc. (OTCQB: LFER) CEO Fernando Leonzo issues the following Shareholder Update:

Dear Fellow Shareholders:

We are providing this letter as an update to our shareholders now that we have filed our second quarter 2020 10-Q filing. As we disclosed in our November 6, 2019 Shareholders’ Update Letter, the Company has faced challenges relating to the divestures of its poor performing assets consisting of two of its distribution subsidiaries. Those divestures, as well as the bulk of the charges for the impairments of our assets, is now fully reflected in our SEC filings. Fortunately, the remnants of those charges have been dealt with, so that the Company’s Board of Directors and management can now focus on its plans to bring back value to our shareholders. The Company’s Board, along with some of its largest stakeholders, have been working to refocus its business model towards a higher potential growth opportunity. That refocus is to look for opportunities within the Cannabis space in a direct to consumer (B2C) or acquire other hard assets that could potentially bring significant value. Though it seems that it has taken a considerable amount of time since our November 2019 update, it is important to understand that in divesting from our previous non-performing assets, it has enabled the Company to be relieved of nearly $1 Million Dollars in payables due to vendors from its distribution subsidiaries. This action alone helps the Company to operate in a much leaner fashion, while also seeking out opportunities that potentially will bring immediate revenues to the Company.

In our November Update we also made a clear declaration that “Creditability and legitimacy and improvement in the management team is the number one priority for Life On Earth. The Company’s founders, its board, and its stakeholders all recognize that the Company needs a better team to steer it.” Since then, the Company has brought to its Board, Sonia Luna, a highly regarded executive with extensive experience in accounting, auditing, and compliance, in particular within the cannabis industry in California.

Management and its Board realize and understand that true value must be brought back to our shareholders. We have determined that we would only seek out opportunities that come with real assets. Assets that are secured as well as opportunities that will generate immediate revenues and cash flow. In seeking a Business to Consumer (B2C) business model, the Company hopes to leverage its own brands, such as the Just Chill brand and use a B2C platform in order to focus on specific target audiences that market directly to them. The Company is (and has) looked at other assets that have proven track records of performing and can be securitized by hard assets such as real estate. But in many ways, that’s where we believe the opportunity lies, because there is still an open window of opportunity that would allow a smaller and nimble company to stake a claim to the market and rapidly grow. As we move forward with opportunities and assets that would allow our Company to potentially generate substantial revenues commensurate with our expansion plans, the next question is how does the Company position itself in order to capture such opportunities? How will the Company be able to fund such expansion plans?

The Company has completed the final draft of its Registration A+ circular that will be submitted to the SEC for approval. The Registration will be a Tier 2 Reg. A+, which will allow the Company to register up to $50 Million USD from the offering. The Company’s plans are to offer the largest equity round in its history for its expansion plans and to cure deficiencies from its balance sheets. The Company has identified possible assets that it will potentially be able to obtain with the proceeds from such offering. These assets would bring significant revenues and cash flow to the Company’s balance sheet. These assets are already performing in their markets.

In the coming weeks we will be announcing more details of this plan as we get through the final hurdles.

In the meantime, we welcome inquiries as always and we also welcome our shareholders’ comments directly on our info@lifeonearthinc.com web portal. Once again, thank you kindly for your being a shareholder, and we look forward to the upcoming announcements regarding the future development of our company.

Warmest regards,

Life on Earth, Inc.

By: Fernando O. Leonzo
Name: Fernando Oswaldo Leonzo
Title: Chairman and Chief Executive Officer

 

RELEASE Number

https://www.cftc.gov/PressRoom/PressReleases/8132-20

8132-20

March 17, 2020

CFTC Provides Relief to Market Participants in Response to COVID-19

Washington, D.C. — The Commodity Futures Trading Commission today announced the Division of Swap Dealer and Intermediary Oversight (DSIO) has issued a number of no-action letters providing temporary, targeted relief to futures commission merchants, introducing brokers, swap dealers, retail foreign exchange dealers, floor brokers, and other market participants in response to the COVID-19 (coronavirus) pandemic. The spread of coronavirus has caused compliance with certain CFTC requirements to be particularly challenging or impossible because of displacement of registrant personnel from their normal business sites due to social distancing and other measures.

“These prudent, targeted, and temporary actions will help facilitate orderly trading and liquidity in our derivatives markets. The CFTC remains squarely focused on promoting their integrity, resilience, and vibrancy through sound regulation,” said CFTC Chairman Heath P. Tarbert. “At my direction, the CFTC has pivoted our approach to take this challenge head on and we have dedicated appropriate resources to adapt to market developments. I thank DSIO Director Josh Sterling and his staff for their expeditious development of this relief.”

Subject to the conditions stated in the letters, the relief provided is as follows:

  • Relief for Futures Commission Merchants and Introducing Brokers.  DSIO has granted temporary, targeted no-action relief to futures commission merchants and introducing brokers from CFTC regulations requiring recording of oral communications related to voice trading and other telephonic communications as well as time-stamping requirements when located in remote, socially-distanced locations.  DSIO has also granted 30 days of no-action relief to futures commission merchants from the requirement to furnish annual compliance reports to the CFTC. [See CFTC Letter No. 20-03]
  • Relief for Swap Dealers.  DSIO has granted temporary, targeted no-action relief to swap dealers from CFTC regulations requiring recording of oral communications related to voice trading and other telephonic communications as well as time-stamping requirements when located in remote, socially-distanced locations.  DSIO has also granted 30 days of no-action relief to swap dealers from the requirement to furnish annual compliance reports to the CFTC. [See CFTC Letter No. 20-06]
  • Relief for Retail Foreign Exchange Dealers.  DSIO has granted temporary, targeted no-action relief to retail foreign exchange dealers from CFTC regulations requiring recording of oral communications related to voice trading and other telephonic communications as well as time-stamping requirements when located in remote, socially-distanced locations.  [See CFTC Letter No. 20-05]
  • Relief for Floor Brokers.  DSIO has granted temporary, targeted no-action relief to floor brokers from CFTC regulations requiring recording of oral communications related to voice trading and other telephonic communications as well as time-stamping requirements when located in remote, socially-distanced locations.  DSIO has also granted relief from the requirement to be located on the premises of a designated contract market and to register as introducing brokers, which might otherwise have been triggered in connection with trading activities undertaken at remote, socially-distanced locations. [See CFTC Letter No. 20-04]
  • Relief for Members of Designated Contract Markets and Swap Execution Facilities.  DSIO has granted temporary, targeted no-action relief to members of designated contract markets and swap execution facilities from time-stamping requirements when located in remote, socially-distanced locations. [See CFTC Letter No. 20-02]

-CFTC-

RELATED LINKS

CFTC Staff Letter 20-02

CFTC Staff Letter 20-03

CFTC Staff Letter 20-04

CFTC Staff Letter 20-05

CFTC Staff Letter 20-06

 

MIRAGE ENERGY CORPORATION/NORTHERN HEMISPHERE LOGISTICS, S. A. P. I. DE C. V. SIGNS AGREEMENT TO OBTAIN AND FILE ALL NECESSARY PERMITS/ASSIGNMENTS FOR THE RESPECTIVE PROJECTS FOR EACH COMPANY

https://otcprwire.com/2020/03/18/mirage-energy-corporation-northern-hemisphere-logistics-s-a-p-i-de-c-v-signs-agreement-to-obtain-and-file-all-necessary-permits-assignments-for-the-respective-projects-for-each-company/

NEWS VIA: OTC PR Wire

PostedMarch 18, 2020

InNewsroomOil & Gas

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SAN ANTONIO, TX. – MARCH 18, 2020 — MIRAGE ENERGY CORPORATION (OTC PINK: MRGE) / NORTHERN HEMISPHERE LOGISTICS, INC. announces it has signed an agreement with CONSEJO NACIONAL DE ENERGIA Y PETROQUIMICA HORACIO ZARATE ACEVEDO – PRESIDENT to acquire all permits and necessary documents for the construction and operations for CENOTE ENERGY S. de R. L. de C.V. for storage , WPF MEXICO PIPELINES S. de R. L. de C. V. all pipelines and NORTHERN HEMISPHERE LOGISTICS, INC. in reference to the Isthmus project.

PROJECTS:
CENOTE ENERGY S. de R. L. de C. V. – First under ground natural gas storage facility first phase 52 BCF of working gas storage with the capability of storing up to 786 BCF once full developed as demand by customers dictate.

WPF MEXICO PIPELINES S. de R. L. de C. V. – 42” diameter pipeline interconnected to proposed storage facility with interconnects to Station #19 and Los Ramones all on Mexico’s National Pipeline System. Including interconnecting and rehabilitating a existing 48” pipeline running all the way to the Isthmus Corridor thus bringing abundant supply of natural gas to the southern region of Mexico. Approximately 1000 miles.

NORTHERN HEMISPHERE LOGISTICS, S. A. P. I. de C. V. – Includes rehabilitating dock facilities at Coatzacoalcos Veracruz on the Gulf of Mexico side with new monobouys. Rehabilitating 30” & 48” lines running from Coatzacoalcos to Salina Cruz Oaxaca, dock and monobouys in the Pacific side, this including the pumping stations along the track and tankage on both side of the Isthmus.

FORWARD-LOOKING STATEMENTS:

This press release contains forward-looking statements. These statements relate to future financial performance. We intend that such forward-looking statements be subject to the safe harbors for such statement. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgement as to what may occur in the future. However, forward-looking statements are subject to risk, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected.

SOURCE: Mirage Energy Corporation
http://www.mirageenergycorp.com/
Office: 210-858-3970

 

MOBICARD IS THE ANSWER TO CORONAVIRUS NETWORKING FEARS

NEWS VIA: OTC PR Wire

https://otcprwire.com/2020/03/17/mobicard-is-the-answer-to-coronavirus-networking-fears/

PostedMarch 17, 2020

In: Newsroom

0

Cambridge, MA-March 17, 2020 –MobiCard Inc. aka Peer to Peer Network (OTC Pink: PTOP); As the Coronavirus has spread around the globe, from China to American cities, it has been dominating the news, and affected everything in our lives, from the floors of the stock exchanges, from the hallways of government, to main street restaurants and bars, to the laboratories where companies are racing to develop vaccines. When events threaten to disrupt business, markets, and everyday life, various companies are developing solutions to navigate them. MobiCard has the perfect product as a solution to the new stay at home economy.

MobiCard is a digital business card, not a paper business card. With the virus being spread through physical contact and people gathering at certain places like networking events or conferences, MobiCard is a much safer and healthier way to transact business, all of the time. The best thing about MobiCard is that with the Coronavirus, or any other type of virus in the future, the MobiCard brand should benefit the end users significantly by limiting the unnecessary need to be in the proximity of another person and have to physically interact with them. MobiCard’s technology platform when completed will allow people to share their digital business card via email, text, or social media. If you had a MobCard right now, you could share YOUR card with anyone, and you would never have to shake hands or exchange anything in person. The digital age is fast approaching and as Coronavirus sweeps the nation MobiCard will help the public adapt, and evolve so that business can continue to be conducted. Sharing a digital business card is a lot safer than handing someone a physical card.

MobiCard is a viable solution for business people to stay safe from the virus. Since the CDC notes that 80% of transmission occurs from physical contact and only 20% is air born MobiCard encourages everyone to sign up now for a MobiCard and we will allow them to sign up as a user for free. MobiCard plans to reach out to enterprise companies that have given notice to their employees to stay home and offer them a solution. Any company could sign up for a MobiCard enterprise account and with an employee email list could generate 100’s, 1000’s or even 1 million cards automatically in our enterprise Administrators dash board which would then send emails to everyone of those employees for them to customize their cards so that the employees can continue to be productive from home.
Never has there been a better time for MobiCard to serve the public and help companies and business people to evolve, and adapt to the digital age. Keeping people safe while bringing a new digital solution to business is a fundamental component to the MobiCard core product.

MobiCard has been in contact with our technology partners and has stressed that the Beta test needs to launch ASAP.

MobiCard could start to acquire users from day one of the beta launch and in the next month MobiCard could literally transform an industry from paper into digital business cards and help aid the safety of the global community.

MobiCard’s technology partners have informed us that the Apple audit flagged a payment feature that allowed a premium monthly subscriber to sign up and pay for, a version of the card that would not have any advertisements on the card whatsoever. Apple has made it clear that this feature is only allowed if processed through the Apple payment system, as Apple takes 30% and they do not want any work arounds in the code. The Technology team is implementing Apple Authentication. Before resubmitting the Apple app, it must go through a new round of Quality and Assurance testing of every feature to make sure that the change to the code does not have any ripple effects and effect other parts of the app. The Apple Authentication fix should be done soon, and MobiCard is excited to have this issue addressed, changed, and completed very soon.

There will be a conference call this Thursday March the 19th at 6:30pm Eastern time to address the strategic plan to get the financials completed with cost estimates and time frame discussions. The conference call will also have a question and answer section as well.

Joshua Sodaitis Chairman and CEO concluded “Now more than ever, there is a need for our new MobiCard platform, Coronavirus is scary, but MobiCard should benefit the public tremendously in allowing businesses to continue generating new business prospects and know; who to follow up with, and when. It is in my opinion extremely valuable for shareholders if we have the financials completed by the time we launch the enterprise apps and we are entering the customer acquisition phase. I am committed to that goal and will elaborate on the shareholders call this Thursday.”

If you would like to sign up for the MobiCard Shareholder conference call send an email to info@freemobicard.com and include weather you are an accredited investor, along with your phone number.

If you would like to sign up for our MobiCard platform please subscribe on our website for free right now at www.freemobicards.com.

Safe Harbor Statement:
This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company invokes the protections of the Private Securities Litigation Reform Act of 1995. All statements regarding our expected future financial position, results of operations, cash flows, financing plans, business strategies, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as “anticipate,” “if,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “will,” and other similar expressions are forward-looking statements. All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. Factors that may cause actual results to differ materially from those in the forward-looking statements include those set forth in our prior filings at www.sec.gov. The company is no longer a fully reporting SEC filing company. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

Joshua Sodaitis, Chairman & CEO
MobiCard, Inc.
45 Prospect Street Cambridge, MA 02139
Phone: 1-617-651-2460
Email: info@freemobicard.com

 

HAN TANG TECHNOLOGIES, INC. ANNOUNCES THE ACQUISITION OF R SQUARED TECHNOLOGIES, INC., AND PLANS COMPLETION OF CURRENT STATUS WITH THE OTC

https://otcprwire.com/2020/03/17/han-tang-technologies-inc-announces-the-acquisition-of-r-squared-technologies-inc-and-plans-completion-of-current-status-with-the-otc/

News VIA: OTC PR Wire

Posted: March 17, 2020

In: Newsroom

0

Port St. Joe, Florida, March 17, 2020 — Han Tang Technologies, Inc. (OTC PINK: HTTI) announced today it has closed a stock exchange agreement to buy 100% of the outstanding common shares of R Squared Technologies, Inc., (“R2”), a technology company that has developed the SENTINELTM a man portable communication network between wired and Wi-Fi enabled devices to operate within a secure network. It can be used for both defense and emergency management applications. The SENTINELTM provides an immediate command and control network and provides a communication solution in response to a variety of adverse circumstances, including severe weather, natural disasters, power outages or even a hostile attack.

The SENTINELTM was conceived in the wake of Hurricane Katrina in New Orleans, the earthquakes in Haiti and Northern Italy, as well as the subsequent horrific flooding events in both Louisiana, North Carolina, Texas and Florida, to address the disastrous breakdown in emergency response communications. All these events demonstrated the need for mobile communication systems at the local and the first response levels. The inability to communicate in all these disasters resulted in chaos and the additional loss of life. As a result, the SENTINELTM was designed and is ready for production. SENTINELTM was developed to create a “Communication Network” to immediately establish a command and control network at the epicenter of a disaster or need.

R2’s wholly owned subsidiary Skyborne Technology a designer and developer of manned and unmanned next generation aviation systems has opened its new manufacturing facility in Gulf County, FL. The company chose the area specifically to have access to employ manned and unmanned aircraft pilots, skilled manufacturing labor for composites, aircraft aluminum and high bullet proof fabrics. As part of opening of the new manufacturing facility, Skyborne Technology will unveil their Airship and Drone technology to begin testing their aviation products for target markets such as Agriculture Assessment, Communications, Education, Defense, Border Security, Health, Natural Disasters, Policing and Traffic Control.

The terms of the acquisition are as follows, in exchange for 100% of the R2 Shares and R2 Assumed Notes of $4,813,760, HTTI shall issue to the R2 Shareholders on a pro rata basis the following shares of Preferred Series B and Series C in an aggregate of Nineteen Million Eight Hundred and Sixty Seven Thousand (19,867,000) of Series B Preferred Stock, an aggregate of Fifteen Million Nine Hundred Thousand (15,900,000) Series C Preferred Stock the Issuable Shares shall be convertible in the aggregate into a number of shares of HTTI Common Stock representing approximately 95% of the shares of HTTI Common Stock outstanding on a fully diluted basis immediately prior to conversion, subject to adjustment as described in the Series B and Series C Certificates of Designation. In exchange for the retirement of $2,275,215 in assumed notes will issue an aggregate of Four Million Five Hundred Fifty Thousand and Four Hundred and Thirty (4,550,430) Series D Preferred Stock convertible into HTTI common stock convertible at $.50 a share with a 6% coupon as described in the Series D Certificates of Designation. In addition, HTTI shall issue two classes of warrants, 500,000 of warrants with a cashless exercise and 1,000,000 of cash warrants exercisable into common shares at $1.00 per share.

Michael Lawson has been appointed as CEO and has 32-years serving as Chairman, CEO and President of public /private companies. Additionally, he has an extensive executive level operational background in both international aerospace and advertising industry. He helped film with his aerospace Team the first commercial space ad for Pepsi followed by the Pizza Hut delivery to the International Space station to just name a few global marketing projects. William and Michael have both previously negotiated airship advertising commercial contract(s) and awarded contracts with the US military and Security Agencies for both Drone and Airship. Their combined talents in utilizing Airships and Drones for advertising, military, environmental, communication, agriculture and other applications will open new opportunities for HTTI and our technology partners.

William Robinson, (‘Billy”) has been appointed as Chairman/President/CFO has 33-years serving as Chairman, CEO and CFO of several public/private companies. Additionally, he has an extensive executive level operational background in manufacturing, aerospace and technology. He led the company that received the first approval for a commercial drone to fly in US airspace. He has initiated and completed multiple public and private transactions assisted with the sale, merger, funding and IPOs. Prior, Mr. Robinson held management positions at Paine Webber initiating two IPOs and served as a vice president of Prudential Securities, Inc. (NYSE:PRU) with series 7, 6 and 65 license (inactive). Mr. Robinson studied Business and Finance at Oklahoma University, Northeastern State University and Northeastern A & M University.

“We are excited about the growth for HTTI and our subsidiaries and look forward to expanding the employment opportunities for the Gulf County Region and the State of Florida. Our current business model targets disaster relief, border protection, communication, public safety, environmental research, distance learning, medical and other vertical markets globally,” stated Michael Lawson, CEO.

“Our combination with HTTI gives new financing options and expands the awareness of the company. Further, we are currently completing the financial filings to have HTTI back in good standings with the OTC expeditiously. Our combined technologies fill an immediate need in both the US and abroad,” stated Billy Robinson, President.

About Han Tang Technology, Inc.

Han Tang Technology, Inc., (HTTI) is a Research and Development holding company with a focus on Communication Aerospace and Environmental Solutions. Researchers at HTTI are actively engaged in solving transformative problems for the government and commercial clients. We are working on a wide range of topics including but not limited to advanced communication, Airship and Drone Technology and low altitude analysis of carbon dioxide (CO2) conversion, new energy processes, biomass conversion, energy efficiency crop and mining management.

About R Squared Technologies, Inc.

R Squared Technologies, Inc., (“R2”), a technology company that has developed the SENTINEL a man portable communication network between wired and Wi-Fi enabled devices within a secure network. It can be used for both defense and emergency management applications. The SENTINEL provides an immediate command and control network and provides a communication solution in response to a variety of adverse circumstances, including severe weather, natural disasters, power outages or even a hostile attack.

About Skyborne Technology, Inc.

R Squared’s wholly owned subsidiary Skyborne Airship technology has significant investments in research & development of Intellectual Property and proprietary designs. In areas covering semi-rigid airship design, reverse-ballonet technology, mooring and hybrid propulsion that has competitive advantages for both its Spherical and Cylinder Class airship designs. Skyborne has a manufacturing facility in Wewahitchka, Florida and recently acquired the airport in Port St. Joe, Florida for manned and unmanned operations.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:

This news release includes certain “forward-looking statements” under applicable US securities legislation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals, where applicable and the state of the capital markets. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contact:

OTC: HTTI
Billy Robinson, President
504-722-7402
billy@skybornetechnology.com
www.skybornetechnology.com

Deborah Cheek, Communications Director
850-588-1747
deborah@skybornetechnology.com

 

SOLAR INTEGRATED NAMES BRIAN MILHOLLAND PRESIDENT COMPANY EXPECTS TO EXCEED Q1 REVENUES OF $6 MILLION FINALIZING NEW CFO SEARCH UPDATES CAVEAT EMPTOR REMOVAL

NEWS VIA: OTC PR Wire

Posted: March 17, 2020

In: NewsroomRenovable EnergySolar Energy

0

POWAY, California, March 17, 2020 — Solar Integrated Roofing Corporation (OTC PINK: SIRC), a leading integrated solar and roofing installation company in Southern California, announced today that it has named Brian Milholland President of SIRC. In addition, the Company announced that revenues for the 1st quarter are exceeding internal expectations of $6 million; they are finalizing the naming of a new CFO and are providing an update on the removal of the Caveat Emptor.

David Massey, CEO of SIRC, commented, “We are very pleased to formally announce the naming of Brian Milholland President of SIRC. As previously mentioned, Brian is a “solar Guru” in the industry and brings a wealth of experience and expertise to the company. I could not think of anyone more capable of leading our charge to becoming the major player in the solar/roofing industry in the Southern California markets.”

Commenting further, Massey said, “despite this being the slowest time of the year, we are already approaching $3 million in revenues for our 1st quarter, which began March 1st, and anticipate exceeding our goal of $6 million in revenues for the quarter ending May 31st. We are ahead of last year’s numbers and expect our numbers to grow exponentially over the coming months.”

Finally, Massey said, “we have identified a new CFO candidate who has strong public company and acquisition experience. This person will help us to continue to make acquisitions and integrate them into the SIRC family of companies.

In addition, we have been working with OTC Markets to remove the Caveat Emptor. We have retained a new accounting firm with vast public company experience who is providing the necessary information to the OTC Markets to remove the CVEM listing. We expect resolution to this issue very soon. It is still our objective to move our listing to the QX exchange this year.”

About Solar Integrated Roofing Corporation:
Solar Integrated Roofing Corporation is an integrated solar and roofing installation company specializing in commercial and residential properties with a focus on acquisitions of like companies to build a footprint nationally. For more information, please visit: www.solarintegratedroofingcorp.com

Forward-Looking Statements:
Any statements made in this press release which are not historical facts contain certain forward-looking statements; as such term is defined in the Private Security Litigation Reform Act of 1995, concerning potential developments affecting the business, prospects, financial condition and other aspects of the company to which this release pertains. The actual results of the specific items described in this release, and the company’s operations generally, may differ materially from what is projected in such forward-looking statements. Although such statements are based upon the best judgments of management of the company as of the date of this release, significant deviations in magnitude, timing and other factors may result from business risks and uncertainties including, without limitation, the company’s dependence on third parties, general market and economic conditions, technical factors, the availability of outside capital, receipt of revenues and other factors, many of which are beyond the control of the company. The company disclaims any obligation to update the information contained in any forward-looking statement. This press release shall not be deemed a general solicitation.

Contact:
Marlena LeBrun
+1 760-566-9116
marlenalebrun@gmail.com

 

MIRAGE ENERGY CORPORATION SIGNS AGREEMENT WITH NORTHERN HEMISPHERE LOGISTICS, S. A. P. I. DE C. V. TO PARTICIPATE IN THE DEVELOPMENT OF THE ISTHMUS CORRIDOR PROJECT

NEWS VIA: OTC PR Wire

Posted: March 16, 2020

In: Newsroom

0

SAN ANTONIO, TX.-MARCH 16, 2020 — MIRAGE ENERGY CORPORATION (OTC PINK: MRGE) announces it has signed an agreement with NORTHERN HEMISPHERE LOGISTICS to participate in the development of Northern Hemispheres Isthmus Corridor Project the signing of this agreement gives Mirage the right to participate for 30% of the project. Total estimated cost for the project is $ 6.0 Billion USD.

This project will give a faster more economical way of delivering crude oil and refined products to Asia and Mexico but also the west coast of the US.

FORWARD-LOOKING STATEMENTS:
This press release contains forward-looking statements. These statements relate to future financial performance. We intend that such forward-looking statements be subject to the safe harbors for such statement. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgement as to what may occur in the future. However, forward-looking statements are subject to risk, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected.

SOURCE: Mirage Energy Corporation
http://www.mirageenergycorp.com/
Office: 210-858-3970

 

News Release

March 10, 2020

Ray Pellecchia (212) 858-4387
Andrew DeSouza (202) 728-8832

FINRA Launches New Data on Treasury Securities Trading Volume

Treasury Aggregate Statistics to Provide More Transparency in Marketplace

https://www.finra.org/media-center/newsreleases/2020/finra-launches-new-data-treasury-securities-trading-volume

WASHINGTON — FINRA today for the first time posted weekly, aggregate data on the trading volume of Treasury securities reported to TRACE®, FINRA’s Trade Reporting and Compliance Engine®.

The new Treasury Aggregate Statistics report provides trading volume in U.S. Treasury securities reported to TRACE for the prior week. The information is aggregated by Treasury security subtype: bills, floating rate notes (FRN), nominal coupons, and Treasury inflation-protected securities (TIPS). The data are further grouped into two categories: alternative trading system/interdealer transactions, and dealer-to-customer transactions.

For nominal coupons and TIPS, the report also shows remaining maturity and on-the-run/off-the run buckets.

Securities firms began reporting Treasury transactions to FINRA in July 2017, with the goal of providing regulators and policymakers with additional information to increase understanding and enhance surveillance of this bellwether market.

”Publishing this important data will increase transparency for the benefit of investors and other market participants,” said Thomas Gira, Executive Vice President, Market Regulation and Transparency Services. “We look forward to continue working with the Treasury Department, the SEC and the Federal Reserve Board to advance market transparency and sound oversight and policymaking.”

About FINRA

FINRA is a not-for-profit organization dedicated to investor protection and market integrity. It regulates one critical part of the securities industry – brokerage firms doing business with the public in the United States. FINRA, overseen by the SEC, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. For more information, visit www.finra.org.

 

GENTECH SEES JUMP IN DEMAND FOR SPECIALTY COFFEE HOME DELIVERY AS CORONAVIRUS RISK DRIVES STAY-AT-HOME DYNAMIC

ByOTC PR Wire

PostedMarch 12, 2020

InCBDConsumerNewsroom

0

https://otcprwire.com/2020/03/12/gentech-sees-jump-in-demand-for-specialty-coffee-home-delivery-as-coronavirus-risk-drives-stay-at-home-dynamic/

NEW YORK, March 12, 2020 — GenTech Holdings, Inc. (OTC PINK: GTEH) (“GenTech” or the “Company”), an emerging leader in the high-end CBD food and drinks marketplace, announces that the Company has noticed an uptick in demand for its “Secret Javas” specialty subscription coffee product as fears related to the spread of COVID-19 begin to transform consumer behavior, resulting in a jump in demand for products available for online purchase and home delivery.

According to numerous research pieces, the COVID-19 pandemic is driving a broad “stay-at-home” dynamic that is set to reshape the playing field in many markets over coming months. For the coffee industry, the impact of the spread of novel coronavirus on consumer behavior patterns is widely expected to play out as avoidance of coffee shops in terms of in-store traffic and “hanging out”. But that does not necessarily imply that people will be consuming less total gourmet coffee. The Company believes that the upshot is likely to be excess demand showing up in products like Secret Javas that offer a gourmet specialty coffee experience without exposure to high-traffic public places like coffee shops.

“We see a boost from coronavirus for our model, both now during the primary phase of the scare, and afterwards,” commented David Lovatt, CEO of GenTech. “Once you show people that they can have the gourmet coffee shop experience in the comfort of their own homes, you can’t put the genie back in the bottle. This short-term driver is likely to have long-term consequences because you’re penetrating corners of the market that simply hadn’t been interested in delivery services in the past. It’s a powerful expansion process.”

Management notes that, even without this new driver, the subscription market for household goods has been verging on an all-out boom. According to Forbes, this segment grew by 890% between 2014 and 2018. Other credible analysis suggests that growth accelerated in the past two years and may continue to accelerate in the years to come, marking a clear secular trend that represents an evolution of consumer behavior as the logistical and technological factors involved in coordinating and delivering complex goods matures and consumer behavior evolves in response.

A massive further expansion in these trends is possible from here: Only 7% of US households currently subscribe to a food or beverage product online leaving massive growth according to YouGov. Worldwide, the online foodstuff market, according to Statista, is running at 10% engagement by consumers willing to buy food and beverage products online. Revenue in e-Commerce segment‚ food and beverages alone, in the United States is expected to reach $15bn by 2021, rising from $9bn in 2016.

Lovatt continued, “This is a once-in-a-generation catalyst that will reshape the world in many important ways. Companies built to leverage virtual connectivity, online consumption, and home delivery of goods and services are inevitably going to win out in a world defined by concerns about public places. We are proud to offer some of the best coffee in the world delivered right to your front door to help people weather this process.”

About GenTech Holdings, Inc.:
GenTech Holdings, Inc. is a publicly traded company under the symbol GTEH. The company is creating a national chain of Hemp Centric Coffee Shop Retail Spaces where patrons can relax, drink CBD infused Teas and Coffees, try various own-brand products and experience holistic education and classes. The company is also building an extensive outreach program working with medical practitioners across the country in their own locations to educate their patients and increase awareness of the benefits of THC free CBD Products. All of this is offered under the brand ‘The Healthy Leaf’.

Forward-Looking Statements
This press release may contain forward-looking statements, including information about management’s view of GenTech, Inc.’s future expectations, plans and prospects. In particular, when used in the preceding discussion, the words “believes,” “expects,” “intends,” “plans,” “anticipates,” or “may,” and similar conditional expressions are intended to identify forward-looking statements. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of GenTech, its subsidiaries and concepts to be materially different than those expressed or implied in such statements. Unknown or unpredictable factors also could have material adverse effects on GenTech’s future results. The forward-looking statements included in this press release are made only as of the date hereof. GenTech cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, GenTech undertakes no obligation to update these statements after the date of this release, except as required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for by GenTech.

Corporate Contact:
invest@gentech.group
www.gentechholdings.com

 

FRANKLIN MINING CONTINUES OPERATIONS

By: OTC PR Wire

Posted: March 10, 2020

In: Newsroom

0

Franklin Directors Begin Search for Additions to Management Team

Carson City, NV, March 10, 2020 – Franklin Mining (OTC Pink: FMNJ) Franklin Mining (OTC Pink: FMNJ) is announcing today that the operations in South America is effective January 3, 2020.

Our management in South America has visited our partners and is continuing to move forward with upgrading our equipment In Bolivia and Peru. We are excited about the possibilities of our production.

In making today’s announcement, William Petty, Chairman, said, “I am dedicated to bringing all Disclosure Statements, Financial Reports current as soon as possible. I am working now to assemble a world-class management team to exceed our past accomplishments and continue to succeed even further in the future. We value our shareholders and are certain these changes will bring about much success.”

Safe Harbor Act: This release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may,” “future,” “plan” or “planned,” “will” or “should,” “expected,” “anticipates,” “draft,” “eventually” or “projected.” You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report.

For additional information, visit our website, www.FranklinMining.com, e-mail: FranklinMining.CEO@gmail.com or follow us on Twitter @FMNJ1864

 

SUN KISSED’S HAKUNA LAUNCHES PROVISIONING PARTNERSHIP SEGMENT, BOOKS FIRST CLIENT

News VIA: OTC PR Wire

PostedMarch 9, 2020

InCBDHEMPNewsroom

0

NEW YORK, March 9, 2020 – Sun Kissed Industries Inc. (OTC PINK: SKDI) (“Sun Kissed”, “SKDI”, or the “Company”), an emerging leader in the CBD Food and Beverage marketplace, is excited to announce that the Company’s recent acquisition, Products Group Inc, DBA/ Hakuna (“Hakuna Supply”), is actively engaging in a developing Provisioning Partnership segment, wherein the Company will mobilize and monetize its market-leading capital equipment and expertise, to act as provisioning partner for CBD and non-CBD food and beverage companies ready to begin branded commercialization of product concepts and designs, but who lack the infrastructure, capacity, and expertise to manufacture, package, and ship top-quality branded products in the space.

Hakuna has already earned a signed contract with an exciting new branded partner in the Gourmet Beverage industry. Hakuna will act as manufacturer, packager, and shipper for all products for this new client, charging on a ‘per unit shipped’ pricing plan.

Carl Grant CEO of Sun Kissed, commented, “Through Hakuna, we already have the means to drive significant additional revenues by monetizing prior fixed cost investments, given the flood of new food and beverage start-ups in the specialty marketplace. The Gourmet Beverage company has designed a brand, an offering, a fantastic website and a significant marketing budget. But they don’t have the infrastructure to get product to market. Hakuna is offering them an immediate route to commercialization of the brand and expects immediate revenues from the deal as soon as orders are placed.”

Hakuna already has the means to bring substantial capacity to packaging, labeling, storage, specialty infusion (such as CBD to food and beverages), mixing and sourcing, boxing, and dispatching of final goods direct to consumers.

According to Fuel by McKinsey, the overall subscription ecommerce market is worth $10 billion, not including Amazon Prime “subscribe and save” orders. But the Company believes there is enormous growth ahead in this space, particularly in the subscription coffee market. According to YouGov statistics, only 7% of US households currently subscribe to a food or beverage product. Globally, according to Statista data, the online foodstuff market is running at just 10% engagement in terms of consumers willing to buy food stuffs online. That represents enormous upside potential as delivery and subscription consumption activity moves increasingly mainstream over coming years.

“The investment flowing into this space has been extraordinary,” continued Grant. “There are a lot of people sitting on capital and a vision, but they need a boost to get off the ground. We have the means to offer them that boost and, in the process, tap into a significant new revenue stream as we continue to build our own award-winning brand.”

About Sun Kissed Industries, Inc.
Sun Kissed Industries Inc. (OTC PINK: SKDI) is an emerging leader in the CBD-based products marketplace. The Company is pursuing meaningful acquisitions as part of an aggressive M&A strategy designed to position Sun Kissed as a dominant player in a well-defined, high-growth niche within the rapidly expanding CBD sector.

FORWARD-LOOKING STATEMENTS:

This press release may contain forward-looking statements, including information about management’s view of Sun Kissed Industries Inc.’s future expectations, plans and prospects. In particular, when used in the preceding discussion, the words “believes,” “expects,” “intends,” “plans,” “anticipates,” or “may,” and similar conditional expressions are intended to identify forward-looking statements. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of Sun Kissed, its subsidiaries and concepts to be materially different than those expressed or implied in such statements. Unknown or unpredictable factors also could have material adverse effects on Sun Kissed’s future results. The forward-looking statements included in this press release are made only as of the date hereof. Sun Kissed cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Sun Kissed undertakes no obligation to update these statements after the date of this release, except as required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for by Sun Kissed.

SOURCE: Sun Kissed Industries Inc.

Contact:
Target Marketing Agency
112 E 25th Street
New York, New York 10010
917-983-2268

CBDCBDNews,

 

RESGREEN GROUP INTERNATIONAL, INC. (RGGI) SIGNS AGREEMENT TO BUILD ITS FIRST AUTOMATED GUIDED VEHICLE (AGV)

News VIA: OTC PR Wire

PostedMarch 9, 2020

InNewsroom

0

Elkhart, Indiana, March 9, 2020-ResGreen Group CEO Parashar (Parsh) Patel (OTC PINK: RGGI) announced today that he has engaged AGV Specialists (AGVSP) to build RGGI’s first of several Automated Guided Vehicles. AGVSP has successfully built and deployed several larger AGV units over the recent past and has been very instrumental in the development of robotic units utilizing proprietary Intellectual Property (IP) owned by its customers.

AGVSP will take the IP owned by RGGI and create a unique Tunneling AGV that is being highly sought after but not yet fully developed to address the requirements of AI based flexible manufacturing environment. This tunneling AGV has the capacity to handle up to 2,000Kg with maximum speed of 200 ft/minute. Some of the optional features will include 5G interface, AI based guidance and open architecture traffic management.

Patel stated, “This is the first of many planned AGV units we are going to bring to the market. I have a goal of having a working prototype “on the concrete” to give live demonstrations to several large end users that we have been in substantive discussions with by mid-summer. We have talked with and listened to Acquisition Officers of some very large end users. This AGV is filling a void in the AGV market that promises to be a great success in very short order.”

Patel continued, “We have many things in the process of completion. I am putting together a team of highly competent professionals to advise and assist in telling our story to the automation marketplace. Please watch in the near future for a newly developed website and announcements. This is about shareholder value.”

ABOUT AGV SPECIALISTS, INC.
AGV Specialists is a team of skilled engineers and programmers that design, develop and integrate AGV, Robotic and machine Vision software/hardware solutions. With an average of over 30 years’ experience for each team member, AGV Specialists can provide a custom embedded and or tightly integrated solution for all automation processing applications. More information about AGV Specialists can be found at http://www.agvspecialists.com

ABOUT RESGREEN GROUP INTERNATIONAL, INC.
RGGI is using certain Know-how and Intellectual Property (IP) that it possesses to develop components for material handling logistics, certain Automatic Guided Vehicles (AGV) and mobile technologies. The Company’s team of skilled engineers and programmers has years of successful professional engineering experience in the automation industry. The Company remains focused and highly motivated to execute on its business strategy to develop certain Automatic Guided Transports including AGV / AGC and Mobile COBOT.

Safe Harbor: This press release contains statements, which may constitute “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of ResGreen Group International Inc. with members of its management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully and the ability to complete before-mentioned transactions. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

Contact:
ResGreen Group International, Inc.
Parashar Patel, President and CEO
Tel: 1-586-467-5841
Email: resgreenint@gmail.com

 

PAI-TECH CANCELS CONTRACT WITH ITS PARENT COMPANY HORIZONS HOLDINGS, INC.

By: OTC PR Wire

PostedMarch 6, 2020

In: Newsroom

Tel Aviv, Israel-March 6, 2020–Israeli Technology company, Pai-Tech, has canceled its acquisition with its parent group, Horizons Holdings, Inc. HZHI.

Announced in December 2019, the acquisition agreement with Horizons Holdings had become one of several controversies centering on Horizon Holdings, Inc.’s inability to file financial disclosures, make timely payments and communicate with staff.

In a statement today, Pai-Tech stated its agreement with Horizon Holdings had been terminated following “arm’s length negotiations” between the concerned parties.

In today’s statement, The Horizons Holdings agreement had been terminated “to further minimize the amount of connected transaction” between the two entities.

It went on to say that termination of the deal would allow Pai-Tech to draw on a wider pool of investors and customers to “enhance the flexibility of its core technology business”.

About PAI-TECH ARTIFICIAL INTELLIGENCE LTD.
PAI-TECH makes computers smarter through the power of intelligent bots and is revolutionizing computer software with the development of the world’s first Bot Operating System Standard (B.O.S.S.). PAI-BOSS provides a distributed operating system powered by PAI-BOTS that run advanced AI algorithms and offer real-time, autonomous and distributed solutions. The company has developed a portfolio of Intellectual Property and has filed several patents to the USPTO.

For more information, please visit: https://www.pai-tech.org

 

IMAGE PROTECT RELEASES NEW SLIDE DECK DEFINING THE FOTOFY.COM MODEL AND VALUE PROPOSITION

News Via: OTC PR Wire

PostedMarch 5, 2020

InNewsroomTech

SAN CLEMENTE, CA — (Newsfile Corp. – March 5, 2020) – Image Protect Inc. (OTC Pink: IMTL) (imageprotect.com) (“Image Protect”, “IMTL”, or the “Company”), a global leader in the end-to-end copyright infringement sector, is excited to announce the public release of a Slide Deck resource cultivated to help educate new users, website owners, image creators, current shareholders, and prospective investors about the disruptive and revolutionary value proposition underlying the Fotofy Platform, the Company’s state-of-the-art image sharing and in-image advertising marketplace.

The Slide Deck covers the many solutions offered by Fotofy for advertisers, content owners, and web developers, while addressing how Image Protect will benefit from Fotofy revenues as the platform gains traction. This slide show presentation can be viewed at: http://imageprotect.com/Fotofy_Investor_Deck_2020.pdf

The Fotofy Slide Deck covers how:

  • Photos offered on the Platform are free to use anywhere online
  • Photos are tracked in real-time for impressions and click-throughs
  • Photos are tracked in real-time for impressions and click-throughs
  • Photos are theft-deterrent, but always shareable
  • Photographer credit line is locked and links back to URL of choice

Fotofy enables content owners to completely control all aspects of their imagery as it is shared across the Internet. The Fotofy model is a game changer for celebrities and influencers looking to further monetize and track their content assets. The Fotofy.com website has become highly user-friendly and represents an invaluable resource for image creators to monetize their images.

With over 500k images in the Fotofy Image Library, Image Protect is battling the online elements to provide value to its shareholders, users, clients, and partners with a tool designed to network all parties together into a web of win-win interactions. Fotofy allows the Company to understand exactly where its content is 24/7, and how to drive that traffic back to Fotofy.com.

Image Protect CEO, Lawrence Adams, stated, “With this Slide Deck we wanted to brief our shareholders – and the rest of the world – about the truly amazing value proposition that defines the Fotofy Platform. This has become a tremendously powerful resource, and we leverage that functionality and value in our discussions with current and prospective In-image advertising clients.”

About Image Protect
Image Protect protects and monetizes creative works. By uniting technology with a team of copyright experts, we ensure that content providers preserve the value of their digital assets. Our web application monitors the global Internet to seek and collect evidence for illegally used visual content. Then our legal partners across North America, Europe, and Asia ensure our clients receive appropriate compensation for work used without valid license.

Safe Harbor Provision
Cautionary statement for purposes of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995: Information in this news release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of the Company and its consolidated subsidiaries could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks, uncertainties and assumptions include the execution and performance of contracts by the Company and its customers, suppliers and partners. The Company disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise.

Corporate Contact:
Image Protect
Lawrence Adams
larry.adams@imageprotect.com

 

RELEASE Number

8122-20

https://www.cftc.gov/PressRoom/PressReleases/8122-20?utm_source=govdelivery

February 21, 2020

CFTC Wins Forex Fraud Trial on Damages and Obtains Monetary Judgment of More than $22.6 Million

Court Releases Pallet of Foreign Currency Valued at $2.5M to CFTC

Washington, D.C. — The Commodity Futures Trading Commission today announced that following a bench trial the U.S. District Court for the Middle District of Alabama entered a final judgment against defendants Husam Tayeh of Illinois and his companies, Dinar Corp., Inc. and My Monex, Inc., both Nevada corporations. The court’s ruling orders the defendants to pay more than $22.6 million in disgorgement and civil monetary penalties in connection with Tayeh’s fraudulent foreign currency (forex) scheme. The court previously found the defendants liable for violations of the Commodity Exchange Act, including fraud.

“This ruling reaffirms the CFTC’s commitment to working in parallel with our enforcement counterparts at the federal, state, and local level,” said CFTC Director of Enforcement James McDonald. “The CFTC remains committed to working closely with other regulators and criminal authorities to root out fraud in our markets. I’m grateful to the Alabama Securities Commission, the U.S. Attorney’s Office for the Middle District of Alabama, the Federal Bureau of Investigation, and local law enforcement for their assistance in this matter.”

“We applaud the work of the CFTC in its successful judgment, and we will continue to assist and engage in cooperative enforcement efforts with our federal partners to combat fraudulent practices in currency and commodity trading,” said Alabama Securities Commission Chief Deputy Director Amanda Senn.

The verdict in this case stems from a July 27, 2015 complaint filed by the CFTC. [See CFTC Press Release No. 7206-15] The complaint charged the defendants with fraudulently soliciting customers to engage in financed retail forex transactions, primarily involving Iraqi Dinar and Vietnamese Dong, misappropriating customer funds, and various registration violations. The complaint also charged Theodore S. Hudson, II and his company, My Monex, Inc., an Alabama corporation, as relief defendants for receiving funds that were obtained as a result of the defendants’ fraud and to which they have no legitimate claim. The CFTC’s charges against Hudson and his company were resolved via consent order of statutory and equitable relief entered by the court on February 12, 2018.

On February 6, 2018, the court entered an order finding the defendants liable on each of the four counts alleged in the complaint and imposing a permanent injunction. The defendants consented to liability but left the issues of disgorgement and civil monetary penalties to be determined by the court. The parties proceeded to trial on August 12, 2019. On February 14, 2020, U.S. District Court Judge Andrew L. Brasher resolved those issues by entering a final judgment against the defendants, ordering them to pay disgorgement of $22,559,153 and a civil monetary penalty of $140,000. The court also entered a memorandum opinion with findings of fact and conclusions of law in the matter.

Court Releases a Pallet of Currency to the CFTC as an Offset Against the Final Judgment

In a separate order, the court released to the CFTC a pallet of Iraqi Dinar and Vietnamese Dong that had been seized from the defendants as an offset against the final judgment, which, at the time of seizure, was valued at more than $2.5 million USD.

Related Criminal Action

In a related criminal action, on June 7, 2016, the U.S. Attorney’s Office for the Middle District of Alabama charged Tayeh by criminal information with one count of wire fraud. [See United States v. Tayeh, Case No. 1:16-cr-213 (M.D. Ala.)]. Tayeh pleaded guilty on June 11, 2016. He was sentenced to a term of imprisonment of one year and one day and ordered to both forfeit more than $8 million and pay $151,517 in restitution to identified victims.

The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Middle District of Alabama, the Federal Bureau of Investigation, the Alabama Securities Commission, the Dothan, Alabama Police Department, and the Houston County, Alabama Sheriff’s Office.

The Division of Enforcement staff members responsible for this case are Timothy J. Mulreany, Danielle Karst, Patricia Gomersall, Hillary Van Tassel, and Paul G. Hayeck.

-CFTC-

 

RELEASE Number

8121-20

https://www.cftc.gov/PressRoom/PressReleases/8121-20?utm_source=govdelivery

February 20, 2020

CFTC Unanimously Approves Proposed Rules to Improve Data Quality, Streamline Regulations at February 20 Open Meeting 

Washington, D.C. — The Commodity Futures Trading Commission at its open meeting today unanimously approved two proposed rules to revise CFTC regulations for swap data reporting, dissemination, and public reporting requirements for market participants. The Commission also unanimously approved reopening the comment period of a proposed rule to amend certain agency regulations related to swap data repositories. All three measures are intended to improve data quality and streamline CFTC regulations.

Proposed Rule: Amendments to the Real-Time Public Reporting Requirements (Part 43)

The Commission unanimously approved proposed revisions to its regulations for real-time public reporting and dissemination requirements for swap data repositories (SDRs), derivatives clearing organizations (DCOs), swap execution facilities (SEFs), designated contract markets (DCMs), swap dealers (SDs), major swap participants (MSPs), and swap counterparties that are neither SDs nor MSPs. The Commission also approved proposed revisions that, among other things, will change the “block trade” definition and the block swap categories; update the block thresholds and cap sizes; and adjust the delay for the public dissemination of block transactions.

This proposed rule has a 90-day comment period following approval by the Commission.

Proposed Rule: Amendments to the Swap Data Recordkeeping and Reporting Requirements (Part 45)

The Commission unanimously approved proposed revisions to its regulations that establish swap data recordkeeping and reporting requirements for SDRs, DCOs, SEFs, DCMs, SDs, MSPs, and swap counterparties that are neither SDs nor MSPs. The Commission also approved proposed revisions that, among other things, streamline the requirements for reporting new swaps, define and adopt swap data elements that harmonize with international technical guidance, and reduce reporting burdens for reporting counterparties that are not SDs or MSPs.

This proposed rule has a 90-day comment period following approval by the Commission.

Reopening the Comment Period for the Proposed Rule: Certain Swap Data Repository and Data Reporting Requirements (Part 49 Verification)

The Commission unanimously approved the reopening of the comment period for the proposed rule Certain Swap Data Repository and Data Reporting Requirements that was published in the Federal Register on May 13, 2019. The proposed rule amends certain regulations applicable to swap data repositories, reporting counterparties, and other market participants. The proposed amendments would, among other things, update requirements for SDRs to verify swap data with reporting counterparties, update requirements to correct swap data errors and omissions, and update and clarify certain SDR operational and governance requirements.

The comment period will be reopened for 90 days ending on May 20, 2020. This will allow market participants to comment on this proposed rule in conjunction with the two proposals approved today.

All three measures are part of the Commission’s efforts to improve the quality, accuracy, and completeness of the data reported to the Commission. They are also intended to streamline data reporting, and clarify obligations for market participants.

Additional information on these rulemakings, including statements of the Chairman and the Commissioners, is available here.

-CFTC-

 

PUBLIC STATEMENTS & REMARKS

Statement of Commissioner Brian D. Quintenz before the Open Commission Meeting on February 20, 2020

https://www.cftc.gov/PressRoom/SpeechesTestimony/quintenzstatement022020?utm_source=govdelivery

Open Meeting on Proposed Rule: Amendments to the Real-Time Public Reporting Requirements (Part 43); Proposed Rule: Amendments to the Swap Data Recordkeeping and Reporting Requirements (Part 45); and Reopening of Comment Period: Certain Swap Data Repository and Data Reporting Requirements (Part 49 Verification)

February 20, 2020

Good morning.  I am pleased to support the data proposals before the Commission today.  These proposed amendments to part 45 regulatory reporting and part 43 real-time reporting hopefully represent the beginning of the end of this agency’s longstanding efforts to collect and utilize accurate, reliable swap data to further its regulatory mandates.

There is frequently a trade-off between being first and being right. That is especially true when it comes to regulation and specifically true when it comes to the CFTC’s historical approach to uncleared swap data reporting. Although the CFTC was the first regulator in the world to implement swap data reporting requirements, it did so only in a partial, non-descriptive, and non-technical fashion, which has led to the fact that, even today, the Commission has great difficulty aggregating and analyzing data for uncleared swaps across swap data repositories (SDRs).

However, I’m very pleased that over the past few years, the CFTC continued to lead global efforts to reach international consensus on reporting requirements so that derivatives regulators can finally get a clear picture of the uncleared landscape.

I wish we could have arrived at this stage sooner.  Nevertheless, I would like to recognize the diligent efforts of DMO staff to finally get us over the finish line.  The proposals before us today seek to provide the Commission with the homogeneous data it needs to readily analyze swap data for both cleared and uncleared swaps, across jurisdictions.  The proposals would eliminate unnecessary reporting fields, implement internationally agreed to “critical data elements,” or CDE fields, and revisit aspects of our current reporting regimes that can be further perfected.

It is important to note the differentiation between the poor usability of current uncleared swaps data and the significant usability of swaps data produced by clearinghouses for cleared swaps trades.  In fact, the swap data for cleared swap transactions is regularly used by the Commission to monitor risk in real time at the client portfolio level.

Part 45 Regulatory Reporting

The proposal would provide reporting counterparties with a longer time to report trades accurately to an SDR by moving to a “T+1” reporting timeframe for swap dealer (SD) and derivatives clearing organization (DCO) reporting parties, and a “T+2” reporting timeframe for non-SD/DCO reporting counterparties.  I support providing additional time for market participants to meet their regulatory reporting obligations.  A later regulatory reporting deadline should help counterparties report the trade correctly the first time, instead of reporting an erroneous trade that then needs to be corrected later.  This proposed change would also more closely harmonize the CFTC’s and ESMA’s reporting deadlines.

The proposal would also implement a number of CDE fields consistently with the detailed technical standards put forth by CPMI-IOSCO.[1]  Importantly, the proposal would remove the current “catch-all” reporting requirement to report “any other term(s) of the swap matched or affirmed” by the counterparties.  It would also require, for the first time, certain reporting counterparties to report valuation, margin, and collateral information daily to the Commission.  Significantly, in order to alleviate burdens on small reporting counterparties, non-SD/MSP reporting counterparties would not be subject to these new requirements.  With respect to swaps on physical commodities, the proposal seeks input from market participants about how certain data elements should be reported, including quantity unit of measure and price unit of measure.  The CDE technical guidance did not harmonize many fields that are relevant to the physical commodity asset class.  I know DMO will continue to play an active role through CPMI-IOSCO’s CDE governance process to ensure that additional guidance and specificity are provided regarding the data elements for this asset class.  I hope that commenters use this as an opportunity to help inform the additional steps that must be taken at the international level to ensure the effective reporting of commodity swaps.

The technical specification describing each of these data elements is being put out for public comment and I urge market participants to comment on all of the proposed elements.  To the extent the CFTC can adopt basic data elements that are identical to other jurisdictions’ elements, global aggregation and measurement of risk, including counterparty credit risk, can become a reality.  However, the goal of global data harmonization, in my opinion, should also be balanced against the burdens and practical realities facing reporting counterparties.  This proposal tries to strike an appropriate balance and I look forward to hearing from commenters on this point.

Part 43 Real-Time Reporting

The real-time reporting proposal generally maintains the “as soon as technologically practicable” reporting standard for most trades, but would adjust the delay for public dissemination of block transactions.  The proposal also updates the block size thresholds and cap sizes and makes adjustments to the block swap categories.

With respect to the timing requirement for reporting block trades, the proposal would establish a time delay of 48 hours after execution of the trade.  The Commodity Exchange Act (CEA) specifically directs the Commission to ensure that real-time public reporting requirements for swap transactions (i) do not identify the participants; (ii) specify the criteria for what constitutes a block trade and the appropriate time delay for reporting such block trades, and (iii) take into account whether public disclosure will materially reduce market liquidity.[2]  Several commenters requested that the Commission reconsider the current delays for block trades under CFTC regulations, citing concerns about market liquidity, counterparty confidentiality, or the pricing of block trades.[3]  Taking into account the CEA’s directives and commenters’ concerns, the proposal seeks to recalibrate the balance among price transparency, price discovery, and market liquidity.  I am very interested to hear from commenters about whether or not the Commission struck the right balance in this proposal, and, if another time delay is more appropriate for particular asset classes of trades, I hope commenters will include their suggestions.

Conclusion

In the past, the leadership of the CFTC has likened the construction of a swap data reporting system to the building of a transcontinental railroad—a monumental infrastructure project, requiring considerable time and resources. However, in my opinion the best way to build a functioning intercontinental railroad is not to let every state decide how wide they want to make the tracks—the approach the agency tried when it rushed out its uncleared swap reporting framework almost eight years ago.  Subsequent progress on this issue has always been stymied by transitioning away from that view—away from the lack of specificity and consistency in how reporting counterparties should report basic data elements.  Today, as a result of the decisive leadership and hard work of this agency, I am optimistic that we have finally turned the corner towards complete visibility into the global swaps market landscape.  I look forward to hearing feedback from market participants and SDRs about how our proposals can be further improved.

[1] See CPMI-IOSCO, Technical Guidance, Harmonization of Critical OTC Derivatives Data Elements (other than UTI and UPI) (Apr. 2018), available at https://www.bis.org/cpmi/publ/d175.pdf.

[2]  CEA Section 2(a)(13)(E).

[3]  See, e.g., Comment Letter from SIFMA Asset Management Group (Aug. 18, 2017) and Comment Letter from the ACLI (Aug. 21, 2017).

 

PUBLIC STATEMENTS & REMARKS

Statement of Commissioner Dan M. Berkovitz on Proposed Amendments to Parts 45, 46, and 49: Swap Data Reporting Requirements

https://www.cftc.gov/PressRoom/SpeechesTestimony/berkovitzstatement022020b?utm_source=govdelivery

February 20, 2020

Introduction

Collecting swap data is crucial to fulfilling the purposes of the Commodity Exchange Act (“CEA”), including “insur[ing] the financial integrity of all transactions subject to this Act and the avoidance of systemic risk.”[1]  The 2008 financial crisis showed how a lack of transparency in swap trading, and regulators’ inability to monitor risk, can create fertile ground for the accumulation of excessive risks.

The Commission must collect appropriate swap data to fulfill its statutory mandate.  The data must be accurate and sufficiently standardized so that the Commission can easily aggregate and analyze the data reported to different swap data repositories (“SDRs”).  The Commission must be able to determine how different derivatives categories and products are being traded, as well as the positions and risks that different market participants are taking across the entire swaps market.  I support today’s Proposal to amend the Part 45, 46, and 49[2] reporting requirements because it would improve the standardization and accuracy of swap data reported to SDRs, and would thereby strengthen the Commission’s ability to oversee swap markets.  I commend the many CFTC staff members who have spent years reviewing swap data and helped improve the data reporting framework.

In addition to obtaining accurate data, the Commission must also develop the tools and resources to analyze that data.  The Proposal, which focuses on the quality and reporting of data, does not address in any detail the actual use cases for the data that would be collected or the analytical needs for swap risk management oversight.  Regrettably, the Commission has yet to set forth with any specificity how it intends to use this swap data to evaluate or address systemic risk.  More generally, the Commission has not devoted enough attention to the important task of building a risk monitoring system for swaps.  In my view, this effort should be a high priority.  I encourage market participants and members of the public to comment on the Proposal and on the particular questions noted below.

The Proposal

In 2010, Congress enacted the Dodd-Frank Act and codified swap reporting reforms consistent with international goals of ensuring that swap reporting and review is “sufficient to improve transparency in the derivatives markets, mitigate systemic risk, and protect against market abuse.”[3]  In 2012, the Commission was the first major jurisdiction to adopt swap data reporting rules.[4]

The Proposal would amend those existing rules to simplify reporting obligations, increase data quality, and partially harmonize specific data elements and taxonomies with new international standards.  It would reduce the number of potentially duplicative reports sent to SDRs by condensing basic reporting obligations into “creation” and “continuation” reports for all swaps and eliminate repetitive daily “state” data reporting of the same data for most existing transactions.  SDRs would also be required to validate the data they receive.  I support these efforts to improve swap data reporting.

The Proposal would also extend swap data reporting deadlines to T+1 (reporting required one day after the day the trade is executed) for swap dealers, major swap participants, swap execution facilities, designated contract markets, and derivatives clearing organizations (“DCOs”).  Other reporting counterparties would be required to report no later than T+2.  This change is expected to increase data accuracy, as it would allow time for reporting parties to verify their data before submission to an SDR.  The tradeoff is that the Commission will not receive data nearly instantaneously, which could constrain the Commission’s ability to undertake real time monitoring of risks in times of market stress.  It is my understanding, however, that to date such monitoring has not been possible.  I encourage public comments on these proposed reporting deadlines, including whether the full amount of T+1 or T+2 is necessary to achieve accurate reporting and is compatible with the Commission’s market and systemic risk oversight responsibilities.

The Proposal also would impose a new requirement for swap dealers, major swap participants, and DCOs to report margin and collateral data each business day.[5]  It would specify certain margin and collateral data elements, including the value of initial margin posted and received by the reporting counterparty, the value of variation margin posted and received, and the currency of posted margin.[6]  The uncleared swaps margin rules are one of the most important risk-mitigation requirements added after the 2008 financial crisis and collecting margin data is important for the Commission to monitor risks and check compliance with the rules.

However, it is not clear whether the collateral data to be collected would be sufficient for the Commission’s purposes.  Without exposure data, the Commission may not be able to assess whether the amount of collateral collected offsets the risks posed by swaps or verify compliance with the uncleared swap margin rules.  For these reasons, I ask that commenters address whether reporting of exposures or other data elements related to margin should be included in this rule or in other reporting requirements, or alternatively, whether the CFTC should be able to undertake the appropriate analysis with other data it already collects.

More Focus Needed on Data Analysis

As a CFTC Commissioner, I am often asked how we use SDR data, and whether the Commission has the institutional focus to leverage the unprecedented amounts of information at its disposal.  The Commission requires that every swap subject to its jurisdiction be reported to an SDR, and that the data be updated throughout the entire swap lifecycle.  Tens of millions of swap data records are received by SDRs monthly.  Market participants are justified in asking what the Commission does with so much data.

Systemic risk monitoring, market integrity, and the protection of market participants are fundamental purposes of the CEA.  Comprehensive data sets and sophisticated data analysis are indispensable to the Commission and indeed to any modern financial regulatory agency.  For decades the CFTC has been analyzing futures and options data on a daily basis to monitor risk and margin sufficiency in those markets.

The Commission needs to identify and articulate how it will use swap data to meet its mandates.  While general goals are often stated, the Commission needs to identify the specific risks it is measuring and monitoring and the information that should be made available to the public to improve market transparency.  The Commission should be able to identify which data elements allow the Commission to specifically monitor for market risk, liquidity risk, and credit risk, for example, and how those elements are used for that purpose.  We should describe how specific data elements will improve the accuracy of the weekly swaps report and bring greater transparency for market participants.  The Commission should map the data elements in the Proposal to these uses and others to explain in a comprehensive manner[7] how they will be used and why they are needed.

I urge the Commission to focus more resources on swap data analysis so that we can maximize our use of the reported data to help mitigate risks before they become a full blown crisis.  While data is the necessary foundation of any good risk monitoring program, more must be done.  The Commission must also develop a more comprehensive capacity to measure and monitor risk.  It must identify how it will achieve specific swap analysis objectives, the data needed for such objectives, and the information technology and human resources needed to execute its vision.

Conclusion

Part 45 and the proposal’s swap data elements are generally focused on the reporting of individual swap transactions, as specified in CEA section 2a(13)(G).  I support the Proposal because it will standardize and improve the reporting of quality swap data.  This is both necessary and appropriate; high quality data is the foundation upon which needed data analysis for risk monitoring and greater transparency are built.  I encourage public comment on whether the 116 data elements in the proposal are sufficient to understand the market, counterparty, and systemic risks associated with individual swaps and with each market participant’s swap book and aggregate exposures.

I thank the staff of the Commission, and particularly the Division of Market Oversight, for their work on the Proposal and for their constructive engagement with my office.  I look forward to public comments, and to a more complete articulation by the Commission of how it will use the swap data that would be collected to fulfill its congressionally mandated mission.

[1] CEA Section 3(b).

[2] The Proposal is one of three notices of proposed rulemaking developed from the Commission’s 2017 “Roadmap to Achieve High Quality Swaps Data.”  The Commission previously proposed revisions to its rules for SDRs (part 49) in 2019.  The present proposal addresses regulatory reporting of swaps (part 45), reporting of transition and pre-enactment swaps (part 46), and certain additional amendments to part 49.  Through separate actions today, the Commission is also proposing significant amendments to its real-time public reporting rules (part 43) and reopening the comment period on its 2019 proposal for SDRs.

[3] See G20, Leaders’ Statement: The Pittsburgh Summit (Sept. 24-25, 2009), paragraph 13, available at https://www.treasury.gov/resource-center/international/g7-g20/Documents/pittsburgh_summit_leaders_statement_250909.pdf.

[4] The Commission initially published its part 45 rules in January 2012.  See Swap Data Recordkeeping and Reporting Requirements, 77 FR 2136 (Jan. 13, 2012).

[5] See proposed section 45.4(c)(2).

[6] See proposed Appendix 1 to part 45.

[7] Staff has provided information about a particular use for each data element.  However, we have not seen how the data elements together allow for a more comprehensive entity level or market level analysis of specific risks.

RELATED LINKS

CFTC to Hold an Open Commission Meeting on February 20

 

PUBLIC STATEMENTS & REMARKS

Statement of Commissioner Dan M. Berkovitz on Proposed Amendments to Part 43: Real-Time Public Reporting Requirements

https://www.cftc.gov/PressRoom/SpeechesTestimony/berkovitzstatement022020?utm_source=govdelivery

February 20, 2020

Introduction

I am voting to issue for public comment the proposed rulemaking that would amend certain rules requiring real-time public reporting of swap trades.  The proposal is intended to enhance the existing real-time public reporting framework adopted in 2012.  Although I am voting to issue the proposal for public comment, I do not support the provision in the proposal that would permit a 48-hour delay in the reporting of block trades.  A 48-hour delay for all block trades is too long.

One of the primary goals of the Dodd-Frank Act is to bring transparency to opaque swap markets.  In Commodity Exchange Act section 2(a)(13), Congress required the Commission to adopt real-time public reporting regulations.  Congress stated that ‘‘[t]he purpose of this section is to authorize the Commission to make swap transaction and pricing data available to the public in such form and at such times as the Commission determines appropriate to enhance price discovery.’’[1]  Many of the provisions in the proposal will further that statutory purpose by improving the usability of the real-time public reporting occurring under the 2012 regulations.

The provisions permitting a delay of 48 hours in the reporting of block trades, however, could impede rather than foster price discovery.  It also could undermine market integrity by providing counterparties to large swaps with an unfair information advantage.  While an appropriate block trade reporting delay is mandated by statute to allow effective hedging of the position, the delay should be appropriately limited.  I address this concern in greater detail below.

Intended Benefits of the Proposal

To effectively use real-time data for price discovery, market participants need to be able to compare data reported by the different swap data repositories and assess the validity of the data.  Significantly, the proposal would require standardized data reporting using technical specifications and instructions that establish the form and manner in which the data must be reported.  This approach promotes uniformity in the data across swap data repositories and reporting parties and thereby facilitates aggregation and validation.

Similarly, the proposal addresses several technical questions that arose during implementation of the 2012 rules that obscured effective price discovery.  The issue of whether to report so-called “mirror swaps” executed under prime broker arrangements is addressed by eliminating duplicate reporting of the mirror swap after the “trigger” swap is reported.  Duplicate reporting can create a false signal of swap trading volume and potentially obscure price discovery by giving the price reported for a single prime brokerage swap twice as much weight relative to other non-prime brokerage swaps.  Similarly, issues involving pricing of certain types of swaps which, by their terms, are priced at a time after the swaps are executed would allow for more accurate price discovery—i.e. the price that is based on market conditions at the time the price is set.

Block Trade Reporting

The proposal also addresses the issue of block trade reporting.  In this area, while the proposal would make a number of improvements, it also raises issues for which public input would be helpful.  Congress directed the Commission to establish “the appropriate time delay for reporting large notional swap transactions (block trades) to the public.”[2]  The proposal maintains the current framework for block trade reporting, but proposes a number of substantive changes to how the block size is set and when the trades must be reported.

Some of these changes are practical, data driven modifications.  The proposal would change the categories of swaps for which different block trade sizes are established so that the block sizing applies to swap products that are comparable in how notional amounts and prices are set.  This change was based on both comments received during implementation and on swap data analysis.  This change would, if effective, enhance price discovery by eliminating the underreporting of categories of swap products that typically trade at notional levels in excess of the block size simply because they are, for example, in a different currency or trade in different quantities than is typical for the rest of the category to which they are compared.  As I have said before, when available, data should be used by the Commission to establish regulations that serve the public policy goals set by Congress.

The proposal also would eliminate several block trade delay periods in the existing rule as short as 15 minutes and replace them with a single 48-hour delay period.  This simplified approach to block trade reporting delays could harm price discovery and do so in a manner that is not supported by the need for a delay in block trade reporting.  Under the proposal, fully one-third of all trades within a category could be block trades subject to reporting delays.  Such a large carve-out from real-time reporting would harm price discovery and provide an unfair information advantage to swap dealers and other large counterparties.

The need for a 48-hour delay is not apparent.  It is my understanding that for many block trades, the dealer seeking to hedge the block position will do so as soon as possible after the trade (if not before) and in most cases within the same trading session.  The logic of this is obvious—waiting overnight to establish a hedge could destroy the profit and loss calculated when the block was executed as market prices move further away from the prices at the time the trade was executed.  On the other hand, some small number of block trades, those of very large size or with complex features, may take 48 hours or more to hedge.  The Commission should calibrate the delay periods accordingly.

I thank the CFTC staff for working with my office to add questions addressing this issue.  The questions relating to proposed section 43.5 ask commenters to address whether these issues are of concern and whether the rule would benefit from having two delay periods, one shorter for “smaller” block trades and another for the largest block trades.  I look forward to reviewing comments on this and other issues.

Conclusion

I commend all of the staff at the CFTC who worked on the reporting rules over the years.  Getting swap reporting right is a difficult, but important function for the Commission.  Improving price discovery through real-time public reporting serves a core CFTC mission.  This proposal offers a number of pragmatic solutions to known issues with the current rule.   These improvements, however, should not— and need not—come at the expense of market transparency and a level playing field.

[1] CEA section 2(13)(B) (emphasis added).

[2] CEA section 2(13)(E)(iii).

RELATED LINKS

CFTC to Hold an Open Commission Meeting on February 20

 

PUBLIC STATEMENTS & REMARKS

Statement of Commissioner Dawn D. Stump Regarding Proposed Rules: Swap Data Reporting

https://www.cftc.gov/PressRoom/SpeechesTestimony/stumpstatement022020?utm_source=govdelivery

February 20, 2020

I am very pleased to be here today addressing updates to the Commission’s swap data reporting rules (which I will refer to collectively as the “proposal”). I would like to thank the staff of the Division of Market Oversight (DMO) for their efforts over the past several years to advance what I consider foundational to effectuating reforms in the over-the-counter (OTC) swaps market.  I applaud their commitment to adapting these rules, and I am grateful for their attention to incorporating suggestions from my Office. I also would like to thank the Office of the Chief Economist and the Office of General Counsel for their many contributions to ready this rule for consideration today.

At the onset of the financial crisis, the most obvious regulatory predicament for OTC swaps was the lack of information.  The Pittsburgh accords were predicated upon the global regulatory community needing to procure data to inform decision makers about these opaque markets.  I have long believed that lacking information, especially concerning swaps markets, was among the most fundamental issues to be addressed post-crisis.

In 2012, the Commission was the first mover in establishing reporting requirements for swaps markets, and other regulatory bodies followed with their own reporting regimes.  Despite the substantial efforts and costs to implement these rules, the different data elements, formatting, and technical specifications utilized by individual jurisdictions make it extremely difficult to aggregate data across global markets – and thus limit the data’s utility.  The G-20 Leaders’ Statement from the Pittsburgh Summit in 2009 included an expectation that members would “assess regularly implementation and whether it is sufficient to improve transparency in the derivatives markets, mitigate systemic risk, and protect against market abuse.”[1]  Today, the CFTC is heeding that direction.

With the benefit of time and experience, we now are able to better harmonize with other regulators around the world, reasonably refine reporting obligations to a common set of reportable elements, improve the accuracy of regulatory reporting, and reduce the burden placed on end-users.

I would also note that last year, the CFTC published a rule proposal outlining ideas on how to confirm the accuracy of swap data reported to swap data repositories (SDRs).[2]  I think it is prudent to also re-open the comment period for that proposed rulemaking today.  I have always felt that the entire suite of swap data reporting rules must be considered together for the public to be able to comment in an informed manner and help ensure that the CFTC delivers the best regulations possible.[3]

Positive Improvements Proposed Today

DMO staff previously shared what it hoped to accomplish with the Roadmap to Achieve High Quality Swaps Data,[4] and today your work and the Commission’s vote will move us one step closer to achieving the goals laid out a decade ago in Pittsburgh.  The takeaways from today’s Open Meeting might focus on a limited number of policy choices, but I feel it is important to highlight the multitude of positive improvements included within the breadth of changes to these regulations.

For example, previous iterations of swap data reporting rules lacked specificity and did not include clear definitions, allowable values, or form and manner for all reportable data elements.  By more clearly defining what is expected, the proposal also appropriately removes what has become known as the ‘catch-all bucket’ to report “any other term(s) of the swap matched or affirmed by the counterparties in verifying the swap,” including instructions to “use as many fields as required to report each such term.”[5]  This ambiguity created compliance risk for both SDRs and reporting counterparties and led to the proliferation of swap data reporting elements included in the data.  As a result, in some circumstances the menu of options on what and how to report swap data expanded from several hundred to over 1,000 swap data elements.  Today, we present a more tailored and finite list of required swap data elements that have been identified by staff as possessing tangible and repeatable use cases.

The proposal also improves the efficacy of the public swaps reporting by focusing on price forming events and minimizing the dissemination of extraneous information that does not foster price discovery.  The proposal removes the requirement to report the “mirror swap” component of the prime brokerage process that has limited price discovery value.  It also clarifies how and when to report post-priced swaps and risk compression exercises, and highlights these unique transaction types on the public tape.

The proposal reasonably extends the deadline for reporting regulatory data for swaps to T+1 for large, sophisticated reporting counterparties such as swap dealers, and T+2 for smaller, less frequent reporting counterparties such as end-users.  This not only harmonizes with other regulators, but correctly puts the emphasis on swaps data being complete and in the appropriate format instead of focusing on speed.  The proposal further reduces burdens on end-users by removing the requirement for those counterparties to submit valuations of uncleared swaps on a quarterly basis.

Today’s proposal creates a mechanism for achieving better quality swaps data.  It standardizes validations across the different SDRs, empowers SDRs to apply validations and reject swaps, and clarifies that reporting counterparties have the onus to address errors causing any rejection in order to come into compliance.  This represents a robust attempt to ensure that reported swap data is complete, formatted in a standardized and harmonized manner, and accurate.

As envisioned by the original rules, the proposal utilizes current data to re-set block and cap sizes to more appropriately delineate the profiles of various products.  By applying the information we now have at our disposal, it was determined that additional categories for block transactions are necessary such that we might move away from the one-size-fits-all approach currently in place by differentiating between overall trading activity and transaction size of distinct products.   In general, the block size would increase, meaning that fewer transactions are eligible for block treatment.  This attempt to ensure that only the most appropriately sized transactions are publicly disseminated with a greater time delay also warrants consideration as to the suitable length of such delays to allow market participants to effectively transact in large size and hedge their position appropriately.  The Commission and staff have received divergent views on this topic since the inception of swaps data reporting.  The guiding statute requires consideration of “whether the public disclosure will materially reduce market liquidity.”[6]  Frankly, I do not know the right answer.  Today’s proposal represents an opportunity to further comment as the Commission attempts to address this difficult question.

Global Harmonization Efforts

Of particular importance to me is the attention that has been applied to advancing the pragmatic objective of global data harmonization in which regulators can effectively utilize the data for coordinated supervision efforts.  Otherwise, disjointed swap data may serve to hinder, rather than assist, implementation of post-crisis reforms.  International bodies, such as the Committee on Payments and Market Infrastructures (CPMI), the International Organization of Securities Commissions (IOSCO), and the Financial Stability Board (FSB) have achieved considerable progress with the development of technical guidance and standards for various identifiers and Critical Data Elements.[7]  This proposal wholeheartedly attempts to implement the Technical Guidance for Critical Data Elements and align CFTC policies as much as possible and where relevant with other regulators, such as the Securities and Exchange Commission (SEC) and the European Securities and Markets Authority (ESMA).  That being said, I am open to learning of other areas that could benefit from further harmonization while not hindering the agency from performing its regulatory duties.  I hope that our progress might encourage fellow international regulators also striving to implement these standards in a synchronized and expeditious manner.

Next Steps

The next crisis will not be the same as the last, nor will it be resolved any better or faster without harmonized data sets.  I ask market participants to view the proposal in that spirit and please provide constructive input on how we can make a good proposal even better.

Furthermore, the future finalization of these rules is not the last step in swap data reporting, as three other key components remain and require our attention.  First, the Commission, reporting counterparties, and SDRs will need to work together to prepare for an efficient implementation.  Second, attention should turn to the principles-based analysis and eventual granting of substituted compliance determinations with respect to swap data reporting regimes in other jurisdictions.  Third, the sharing of harmonized, high-quality swaps data with other domestic and international regulators to facilitate aggregation and oversight of global swaps markets should progress in earnest.

Thank you again to the staff for their hard work on the complex and technical challenge of swap data reporting.

[1] See Leaders’ Statement from the 2009 G-20 Summit in Pittsburgh, Pa. at 9 (Sept. 24-25, 2009), available at https://www.treasury.gov/resource-center/international/g7-g20/Documents/pittsburgh_summit_leaders_statement_250909.pdf.

[2] Certain Swap Data Repository and Data Reporting Requirements, 84 Fed. Reg. 21044 (proposed May 13, 2019).

[3] Id. at 21120-21 (Statement of Concurrence of Commissioner Dawn D. Stump).

[4] See Roadmap to Achieve High Quality Swaps Data (DMO July 10, 2017), available at https://www.cftc.gov/sites/default/files/idc/groups/public/@newsroom/documents/file/dmo_swapdataplan071017.pdf, published with CFTC Letter 17-33, Division of Market Oversight Announces Review of Swap Reporting Rules in Parts 43, 45, and 49 of Commission Regulations (DMO July 10, 2017), available at https://www.cftc.gov/sites/default/files/idc/groups/public/@lrlettergeneral/documents/letter/17-33.pdf.

[5] 17 CFR Part 45, Appendix 1.

[6] Section 2(a)(13)(E)(iv) of the Commodity Exchange Act, 7 U.S.C. § 2(a)(13)(E)(iv).

[7] See Harmonisation of the Unique Product Identifier – Technical Guidance, CPMI Papers No. 169 (Sept. 28, 2017), available at https://www.bis.org/cpmi/publ/d169.htm; Harmonisation of Critical OTC Derivatives Data Elements (Other than UTI and UPI) – Technical Guidance, CPMI Papers No. 175 (April 9, 2018), available at https://www.bis.org/cpmi/publ/d175.htm; Governance Arrangements for the Unique Transaction Identifier (UTI): Conclusions and Implementation Plan, Financial Stability Board (Dec. 29, 2017), available at https://www.fsb.org/wp-content/uploads/P291217.pdf.

 

PUBLIC STATEMENTS & REMARKS

Statements of Concurrence by Commissioner Rostin Behnam Regarding Proposed Rules on Real-Time Public Reporting and Swap Data Recordkeeping

https://www.cftc.gov/PressRoom/SpeechesTestimony/behnamstatement022020?utm_source=govdelivery

February 20, 2020

Real-Time Public Reporting Requirements (Part 43)

I respectfully concur in the Commission’s proposal to amend certain real-time public reporting requirements.  I support the Commission’s ongoing review of its swap reporting rules; however, I think it is very important that we not lose sight of why we have these rules in the first place.  Prior to the 2008 financial crisis, swaps were largely exempt from regulation and traded exclusively over-the-counter.[1]  Lack of transparency in the over-the-counter swaps market contributed to the financial crisis because both regulators and market participants lacked the visibility necessary to identify and assess swaps market exposures and counterparty relationships and counterparty credit risk.[2]  In the aftermath of the financial crisis, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 (Dodd-Frank Act).[3]  The Dodd-Frank Act largely incorporated the international financial reform initiatives for over-the-counter derivatives laid out at the 2009 G20 Pittsburgh Summit, which sought to improve transparency, mitigate systemic risk, and protect against market abuse.[4]  With respect to data reporting, the policy initiative developed by the G20 focused on establishing a consistent and standardized global data set across jurisdictions in order to support regulatory efforts to timely identify systemic risk.  The critical need and importance of this policy goal given the consequences of the financial crisis cannot be understated.

Among many critically important statutory changes, which have shed light on the over-the-counter derivatives markets, Title VII of the Dodd-Frank Act amended the Commodity Exchange Act and added a new term to the Act:  “real-time public reporting.”[5]  The Act defines that term to mean reporting “data relating to swap transaction, including price and volume, as soon as technologically practicable after the time at which the swap transaction has been executed.”[6]

As we consider amending these rules, I think it is important that we keep in mind the Dodd-Frank Act’s emphasis on transparency, and what transpired to necessitate that emphasis.  While most of today’s proposal encourages and supports the transparency required by the Act, I am concerned about the proposed amendments that would significantly extend the time delays for public dissemination of block trades.  Currently, the time delay for public dissemination of block trades executed pursuant to the rules of a SEF or DCM is 15 minutes.[7]  Today’s proposal would extend the time delay to 48 hours for all block trades.  I look forward to hearing from commenters as to whether this significant reduction in real-time transparency is justified, and whether there are potential risks to market structure efficiency that may reward some participants at the expense of others.

Amendments to the Swap Data Recordkeeping and Reporting Requirements (Parts 45, 46, and 49)

I respectfully concur in the Commission’s proposal to amend certain swap data and recordkeeping and reporting requirements.  The proposed amendments reflect a multi-year effort to streamline, simplify, and internationally harmonize the requirements associated with reporting swaps.  As a whole, the proposed amendments should improve data quality by eliminating duplication, removing alternative or adjunct reporting options, and utilizing universal data elements and identifiers.  Along those lines, I am especially pleased that the Commission is proposing to require consistent application of rules across SDRs for the validation of both part 43 and part 45 data submitted by reporting counterparties.  I believe the proposed amendments to part 49 set forth a practical approach to ensuring SDRs can meet the statutory requirement to confirm the accuracy of swap data set forth in CEA section 21(c)[8] without incurring unreasonable burdens.

I am also pleased that the Commission is considering requiring reporting counterparties to indicate whether a specific swap:  (1) was entered into for dealing purposes (as opposed to hedging, investing, or proprietary trading); and/or (2) needs not be considered in determining whether a person is a swap dealer or need not be counted towards a person’s de minimis threshold as described in paragraph (4) of the “swap dealer” definition in regulation 1.3 pursuant to one of the exclusions or exceptions in the swap dealer definition.  In the past, the Commission staff has identified the lack of these fields as limiting constraints on the usefulness of SDR data to identify which swaps should be counted towards a person’s de minimis threshold, and the ability to precisely assess the current de minimis threshold or the impact of potential changes to current exclusions.[9]  As I have noted, where Congress has dictated that the Commission be the primary regulator for certain swap dealing activities, it should utilize resources efficiently to accomplish its duties.[10]  It seems that the Commission’s ongoing surveillance for compliance with the swap dealer registration requirements would be greatly enhanced by data fields identifying the relationship of a particular swap to its participant’s business or purpose—even where the data might only be reasonably available via the reporting counterparty.  Moreover, it would afford the Commission greater insight into the use and usefulness of current exclusions and exceptions, as well as provide important data to support further consideration of relief.  I look forward to hearing from commenters on this question.

[1] See Commodity Futures Modernization Act of 2000, Public Law 106-554, 114 Stat. 2763 (2000).

[2] See The Financial Crisis Inquiry Commission, The Financial Crisis Inquiry Report:  Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States (Official Government Edition), at 299, 352, 363-364, 386, 621 n. 56 (2011), available at https://www.gpo.gov/fdsys/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf.

[3] See Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010).

[4] G20, Leaders’ Statement, The Pittsburgh Summit (Sept. 24-25, 2009) at 9, available at https://www.treasury.gov/resource-center/international/g7-g20/Documents/pittsburgh_summit_leaders_statement_250909.pdf.

[5] 7 U.S.C. 2(a)(13)(A).

[6] Id.

[7] 17 CFR 43.5(d)(2).

[8] 7 U.S.C. 24a(c)(2).

[9] See De Minimis Exception to the Swap Dealer Definition, 83 FR 27444, 27449 (proposed June 12, 2018); Swap Dealer De Minimis Exception Final Staff Report at 19 (Aug. 15, 2016); (Nov. 18, 2015), available at https://www.cftc.gov/sites/default/files/idc/groups/public/@swaps/documents/file/dfreport_sddeminis081516.pdf; Swap Dealer De Minimis Exception Preliminary Report at 15 (Nov. 18, 2015), available at https://www.cftc.gov/sites/default/files/idc/groups/public/@swaps/documents/file/dfreport_sddeminis_1115.pdf.

[10] See De Minimis Exception to the Swap Dealer Definition—Swaps Entered Into by Insured Depository Institutions in Connection with Loans to Customers, 84 FR 12450, 12470-71 (Apr. 1, 2019).

RELATED LINKS

EVENT:CFTC to Hold an Open Commission Meeting on February 20

 

PUBLIC STATEMENTS & REMARKS

Statement of Chairman Heath P. Tarbert in Support of Proposed Rules on Swap Data Reporting

https://www.cftc.gov/PressRoom/SpeechesTestimony/tabertstatement022020?utm_source=govdelivery

February 20, 2020

Data is the lifeblood of our markets.  Yet for too long, market participants have been burdened with confusing and costly swap data reporting rules that do little to advance the Commission’s regulatory functions.  In the decade-long effort to refine our swap data rules, we have at times lost sight of Sir Isaac Newton’s wisdom: “Truth is ever to be found in simplicity, and not in the multiplicity and confusion of things.”

Overview

Simplicity should be a central goal of our swap data reporting rules.  After all, making rules simple and clear facilitates compliance, price discovery, and risk monitoring.  While principles-based regulation can offer numerous advantages, there are areas where a rules-based approach is preferable because of the level of clarity, standardization, and harmonization it provides.  Swap data reporting is one such area.[1]

As it stands, swap data repositories (SDRs) and market participants have been left to wade through Parts 43 and 45 of our rules on their own.  We have essentially asked them to decide what to report to the CFTC, instead of being clear about what we want.  The result is a proliferation of reportable data fields designed to ensure compliance with our rules—but which exceed what market participants can readily provide and what the agency can realistically use.  These fields can run hundreds deep, imposing costly burdens on market participants.  Yet for all its sprawling complexity, the current data reporting system omits, of all things, uncleared margin information—thereby creating a black box of potential systemic risk.[2]

And that just describes CFTC reporting.  As it stands today, a market participant with a swap reportable to the CFTC might also have to report the same swap to the SEC, the European Securities and Markets Authority (ESMA), and perhaps other regulators as well.  The global nature of our derivatives markets has led to the preparation and submission of multiple swap data reports, creating a byzantine maze of disparate data fields and reporting timetables.  Market participants should not incur the costs and burdens of reporting a grab-bag of dissimilar data for the very same swap.  That approach helps neither the market nor the CFTC: conflicting data reporting requirements make regulatory coordination more difficult, preventing a panoramic view of risk.

Today we take the first step toward changing this.  I am pleased to support the proposed amendments to Parts 43 and 45 of the CFTC’s rules governing swap data reporting.[3]  The proposals simplify the swap data reporting process to ensure that market participants are not burdened with unclear or duplicative reporting obligations that do little to reduce market risk or facilitate price discovery.  If the amendments are adopted, we will no longer collect data that does not advance our oversight of the swaps markets.

In fact, the Part 45 proposal includes a technical specification that identifies 116 standardized data fields that will help replace the many hundreds of fields now in use by SDRs.  We are also proposing to harmonize our swap data reporting requirements with those of the SEC and ESMA.  Harmonization would remove the burdens of duplicative reporting while painting a more complete picture of market risk.  At the same time, the proposed changes to Part 43 would enhance public transparency as well as provide relief for end users who rely on our markets to hedge their risks.  Our swaps markets are integrated and global; it is time for our reporting regime to catch up.

Simplified Reporting

Today’s proposals advance my first strategic goal for our agency: strengthening the resilience and integrity of our derivatives markets while fostering their vibrancy.[4]  Simplified reporting is critical to the CFTC’s ability to monitor systemic risk.  While SDRs now require hundreds of data fields in an effort to comply with Parts 43 and 45 of our rules, uncleared margin has been noticeably absent.  If finalized, Part 45 will require the reporting of uncleared margin data for the first time.  This will significantly expand our visibility into potential systemic risk in the swaps markets.

A related problem we address today involves inconsistent data.  SDRs currently validate swap transaction data in conflicting ways, causing market participants to report disparate data elements to different SDRs.  Today’s proposals include guidance to help SDRs standardize their validation of swap data reports, shoring up the resilience and integrity of our markets.

Simplifying the reporting process will also enhance the regulatory experience for market participants at home and abroad, which is another strategic goal for the agency.[5]  We have heard from those who use our markets that the complexity of our existing reporting rules creates confusion, leading to reporting errors.[6]  This situation neither serves the markets nor advances the agency’s regulatory purpose.  Indeed, data errors can frustrate transparency and price discovery.

Our proposals today reflect a hard look at the data we are requesting and the data we really need.  The proposals provide the guidance needed to collapse hundreds of reportable data fields into a standardized set of 116 that truly advance our regulatory objectives.  If adopted, this would reduce burdens on market participants and provide technical guidance to ensure they are no longer guessing at what we require.  Clear rules are easier to follow, and market participants will no longer be subject to reporting obligations that raise the costs of compliance without improving the resilience and integrity of our derivatives markets. Just as we are reducing requirements where they are not needed, we are also enhancing them where they are.  This is the balanced approach sound regulation demands.

Regulatory Harmonization

Today’s proposals also improve the regulatory experience by harmonizing swap data reporting where it is sensible to do so.[7]  There is no good reason for a swap dealer or other market participant to report hundreds of differing data fields to multiple jurisdictions for the very same swap transaction.  This situation imposes high costs with very little benefit.

While we should not harmonize for the sake of harmonizing,[8] we can reap real efficiencies by carefully building consistent data reporting frameworks.  The proposals would harmonize our swap data reporting timelines with the SEC by moving to a “T+1” system for swap dealers, major swap participants, and derivatives clearing organizations.  We would also remove duplicative confirmation data and lift the requirement that end users provide valuation data.

Harmonization also helps the CFTC realize our vision of being the global standard for sound derivatives regulation.[9]  We have long been a leader in international swap data harmonization efforts, including by co-chairing the Committee on Payments and Infrastructures and the International Organization of Securities Commissioners (CPMI-IOSCO) working group on critical data elements (CDE) in swap reporting.[10]  The purpose of the working group is to standardize CDE fields to facilitate consistent data reporting across borders.  Our proposals today would bring this and related harmonization efforts to fruition by incorporating many of the CDE fields and a limited number of CFTC-specific fields into new Part 45 technical specifications.  Incorporating the CDE fields would sensibly harmonize our reporting system with that of ESMA.  As a result, the proposals would advance the CFTC’s important role in bringing global regulators together to form a better data reporting system.

The proposals also would harmonize swap data reporting in several other important respects.  First, we propose adopting a Unique Transaction Identifier (UTI) requirement in place of the existing Unique Swap Identifier (USI) system, as provided for in the CPMI-IOSCO Technical Guidance.[11]  Adopting a UTI system would provide for consistent monitoring of swaps across borders, improving data sharing and risk surveillance.  The proposals would also remove the requirement that market participants report duplicative creation and confirmation data, and would adopt reporting timetables that are consistent with those of ESMA and other regulators.[12]  These are reasonable efforts that will improve the reporting process, while shoring up the CFTC’s position as a leader on harmonization.

Enhanced Public Transparency

I am also pleased to support our proposals today because they enhance clarity, one of the four core values of our agency.[13]  Streamlining the Part 45 technical specification is intended, in part, to reduce unclear and confusing data reporting fields that do not advance our regulatory objectives.  But clarity demands more: we must also ensure we are providing transparent, high-quality data to the public.[14]

Part 43 embodies our public reporting system for swap data, which provides high-quality information in real time.  Providing transparent, timely swap data to the public is critically important to the price discovery process necessary for our markets to thrive and grow.  Enhanced public transparency also ensures that market participants and end users can make informed trading and hedging decisions.

The CFTC’s current system for public reporting is considered the global standard.  Even so, it can be improved.  Although post-priced swaps are subject to unique pricing factors that affect the “public tape,”[15] they are nonetheless reported after execution just like any other swap.  It is of little value for the public to see swaps reported without an accurate price, or any price at all.  To remedy this data quality issue and improve price discovery, we are proposing that post-priced swaps now be reported to the public tape after pricing occurs.

The current reporting system for prime broker swaps has led to data that distorts the picture of what is actually happening in the market.  Currently, Part 43 requires that offsetting swaps executed with prime brokers—in addition to the initial swap reflecting the actual terms of the trade between counterparties—be reported on the public tape.  Reporting these duplicative swaps can hinder price discovery by displaying pricing data that includes fees and other costs unrelated to the actual terms of the parties’ swap.  Cluttering the public tape with duplicative swaps is at best unhelpful, and at worst confusing.  To the public, it could appear as though there are twice as many negotiated, arms-length swaps as there actually are.  Today’s proposals would solve this problem by requiring that only the initial “trigger” swaps be publicly reported.

Relief for End Users

Finally, the proposals would help make our derivatives markets work for all Americans, another of the CFTC’s strategic goals.[16]  While swaps are viewed by many Americans as esoteric products, they can nonetheless fulfill an important risk-management function for end users like farmers, ranchers, and manufacturers.  End users often lack the reporting infrastructure of big banks, and may be unable to report data as quickly as swap dealers and financial institutions.  Indeed, demanding that they do so can impair data quality, frustrating our regulatory objectives.

If finalized, today’s proposals will no longer require end users to report swap valuation data.  It would also give them a “T+2” timeframe for reporting the data we do require.  The proposals would therefore remove unnecessary reporting burdens from end users relying on our swaps markets to hedge their risks.  In addition, by providing sufficient time for end users to ensure their reporting is accurate, the proposals would also improve the quality of data we receive.

Conclusion

It is time for the Commission to reform our swap data reporting rules.  Sir Isaac Newton realized long ago that simplicity can often lead to truth.  It does not take an apple striking us on the head to realize that simplifying our swap data reporting rules to achieve clarity, standardization, and harmonization will inevitably make for sounder regulation.

[1] See Heath P. Tarbert, Rules for Principles and Principles for Rules: Tools for Crafting Sound Financial Regulation, Harv. Bus. L. Rev. (forthcoming 2020) (“A principles-based regime is often a poor choice where standard forms and disclosures are heavily used, as principles do not offer the needed precision.”).

[2] Requiring margin in the uncleared swaps markets ensures that counterparties have the necessary collateral to offset losses, preventing financial contagion.  With respect to non-cleared, bilateral swaps, in which there is no central clearinghouse, parties bear the risk of counterparty default.  In turn, the CFTC must have visibility into uncleared margin data to monitor systemic risk accurately and to act quickly if cracks begin appear in the system.

[3] We are also re-opening the comment period for Part 49, which relates to SDR registration and governance.

[4] See Remarks of CFTC Chairman Heath P. Tarbert to the 35th Annual FIA Expo 2019 (Oct. 30, 2019), available at https://www.cftc.gov/PressRoom/SpeechesTestimony/opatarbert2 (announcing the core value of “clarity” and defining it as “providing transparency to market participants about our rules and processes”).

[5] See id. (identifying the CFTC’s strategic goals).

[6] The problem is compounded by the allowance for “catch-all” voluntary reporting, which creates incentives for market participants to flood the CFTC with any data that might possibly be required.  Paradoxically, this kitchen-sink approach can so muddy the water as to undermine a fundamental purpose of data reporting: to create a transparent picture of market risk.

[7] Harmonizing regulation is an important consideration in addressing our increasingly global markets.  See Opening Statement of Chairman Heath P. Tarbert Before the Open Commission Meeting on October 16, 2019, available at https://www.cftc.gov/PressRoom/SpeechesTestimony/heathstatement101619 (“The global nature of today’s derivatives markets requires that regulators work cooperatively to ensure the success of the G20 reforms, foster economic growth, and promote financial stability.”).

[8] Id. (“To be sure, as my colleagues have said on several occasions, we should not harmonize with the SEC merely for the sake of harmonization.  I agree that we should harmonize only if it is sensible.”).

[9] See CFTC Vision Statement, available at https://www.cftc.gov/About/Mission/index.htm.

[10] The CFTC also co-chaired the Financial Stability Board’s working group on UTI and UPI governance.

[11] The CPMI-IOSCO harmonization group has requested that regulators implement UTI by December 31, 2020.  I believe it is important for the CFTC to meet this deadline, which has long been public and reflects input from our staff.  The remainder of our proposals today are subject to a 1-year implementation period.

[12] Today’s proposals move to a “T+1” reporting deadline for swap dealers, major swap participants, and derivatives clearing organizations and to a “T+2” system for other market participants.

[13] See CFTC Core Values, available at https://www.cftc.gov/About/Mission/index.htm.

[14] One of the issues we are looking at closely is whether a 48-hour delay for block trade reporting is appropriate.  We are hopeful that market participants will provide comment letters and feedback concerning the treatment of block trade delays.

[15] Many post-priced swaps are priced based on the equity markets, and do not have a known price until the equity markets close.

[16] See FIA Expo Remarks, supra note 5.

RELEASE Number

8120-20

https://www.cftc.gov/PressRoom/PressReleases/8120-20?utm_source=govdelivery

February 20, 2020

CFTC Charges Investment Firm and VP with Commodity Pool Fraud

Washington, D.C. — The Commodity Futures Trading Commission today announced the filing of a civil enforcement action in the U.S. District Court for the Western District of North Carolina charging Winston Reed Investments LLC (WRI) and its vice president and investment consultant, Mark N. Pyatt a/k/a Daniel Randolph, a former North Carolina resident, with misappropriation of customer funds and fraudulent solicitation in connection with a commodity pool.

The complaint alleges that from April 2017 through February 2019, WRI and Pyatt fraudulently solicited and received approximately $200,000 from at least 19 pool participants in connection with pooled trades in commodity futures contracts and retail foreign exchange transactions, among other things.

As further alleged, WRI and Pyatt misappropriated most of pool participants’ funds for business expenses, personal use, and to make Ponzi-like payments to other pool participants.  In addition, despite incurring overall net trading losses, WRI and Pyatt sent reports to investors falsely claiming large profits of between approximately 19 and 86% per month.

In its continuing civil litigation, the CFTC seeks restitution to defrauded pool participants, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act, as charged.

Related Criminal Action

On February 20, 2020, the U.S. Attorney’s Office for the Western District of North Carolina announced a separate criminal action against Pyatt. See United States v. Pyatt, W.D.N.C. Case No. 1:20-CR-16, charging Pyatt with wire fraud, securities fraud, investment adviser fraud, and money laundering offenses.

The CFTC thanks the Denver Regional Office of the Securities and Exchange Commission and the Office of the United States Attorney for the Western District of North Carolina for their assistance in this matter.

The Division of Enforcement staff members responsible for this action are James Garcia, Michael Loconte, and Rick Glaser.

-CFTC-

RELATED LINKS

Complaint: Winston Reed Investments LLC

 

RELEASE Number

8119-20

https://www.cftc.gov/PressRoom/PressReleases/8119-20?utm_source=govdelivery

February 14, 2020

CFTC Charges Unregistered Commodity Pool Operator and Its Principal with Fraud and Misappropriation

Washington, D.C. — The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the Eastern District of Missouri against Joshua Christian McDonald and his company, Perfection PR Firm LLC (PPR), which operated out of California and Tennessee. The complaint charges McDonald and PPR with fraud and misappropriation related to an off-exchange foreign currency (forex) trading scheme in which they solicited funds totaling at least $440,000 from at least 12 investors, including multiple residents of Missouri.

According to the complaint, the defendants pooled investors’ funds in bank and trading accounts in their own names. In soliciting funds for and operating the pooled investment vehicle, PPR acted as an unregistered commodity pool operator and McDonald acted as an unregistered associated person of PPR.

The complaint further alleges that beginning in at least August 2017, the defendants falsely represented to prospective investors that McDonald was profitably trading forex and promised investors their accounts would grow between 10% and 50% in value per month, among other claims. As alleged in the complaint, however, McDonald did not in fact trade forex as successfully as he claimed and actually lost money. Moreover, the complaint alleges the defendants misappropriated investors’ funds and transferred them into digital asset accounts in McDonald’s name, or used them to pay McDonald’s personal expenses. According to the complaint, investors have lost most or all of their invested funds as a result of the defendants’ fraud and misappropriation.

In its continuing litigation, the CFTC seeks full restitution to defrauded clients, disgorgement of any ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act, as charged.

Related Criminal Indictment

On January 29, 2020, the United States Attorney for the Eastern District of Missouri indicted McDonald on four counts of wire fraud. [See U.S. v. McDonald, 4:20-CR-70 SRC SPM]

The CFTC appreciates the assistance of the United States Attorney’s Office for the Eastern District of Missouri, the Federal Bureau of Investigation, the Securities Division of the Office of the Missouri Secretary of State, and the Securities Division of the Office of the Mississippi Secretary of State.

The Division of Enforcement staff members responsible for this action are Dmitriy Vilenskiy, Christine Ryall, Paul Hayeck, and former staff member Greta Gao.

* * * * * * *

CFTC’s Commodity Pool Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud involving individuals and firms, often unregistered, offering investments in commodity pools.

The CFTC also strongly urges the public to verify a company’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.

-CFTC-

 

RELEASE Number

8118-20

https://www.cftc.gov/PressRoom/PressReleases/8118-20?utm_source=govdelivery

February 14, 2020

CFTC Charges Colorado Resident with Fraud in Digital Asset-Linked Ponzi Scheme

Washington, D.C. — The Commodity Futures Trading Commission today announced the filing of a civil enforcement action in the U.S. District Court for the District of Colorado against Breonna Clark, of Denver, Colorado, and Venture Capital Investments Ltd., a Colorado limited liability company, charging them with fraud and failing to register with the CFTC.

The complaint charges that the defendants solicited U.S. residents to trade foreign currency (forex) contracts as well as Bitcoin and other digital assets through a commodity pool operated by the defendants. In connection with these solicitations, the defendants collected $534,829 from approximately seventy-two individuals. Rather than trade, the defendants used at least $418,000 of the funds for personal expenses—including acquiring a BMW automobile—and to make Ponzi-type payments to other pool participants.

The complaint also alleges that the defendants fraudulently solicited prospective pool participants by misleading customers about their experience, expertise, and investment track record while promising future profitability trading forex and digital assets. The complaint further alleges that to conceal their misappropriation, the defendants sent pool participants false account statements, which purported to show trading gains.  In addition, the defendants were charged with failing to appropriately register with the Commission pursuant to the Commodity Exchange Act and regulations.

In its litigation against the defendants, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act, as charged.

The CFTC thanks and acknowledges the assistance of the Financial Supervision Commission of Bulgaria, Financial Markets Authority of New Zealand, Seychelles Financial Services Authority, St. Vincent and the Grenadines Financial Services Authority, and the United Kingdom Financial Conduct Authority.

The Division of Enforcement staff members responsible for this case are Kevin Samuel, Erica Bodin, Kim Bruno, Michael Solinsky, and Rick Glaser.

* * * * * * *

CFTC’s Foreign Currency (Forex) Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency (Forex) Trading Fraud Advisory, to help customers identify these scams.

The CFTC also strongly urges the public to verify a company’s registration with the Commission before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.

-CFTC-

 

PUBLIC STATEMENTS & REMARKS

Remarks of CFTC Commissioner Rostin Behnam at the 56th Crop Insurance and Reinsurance Bureau Annual Meeting, Bonita Springs, Florida

https://www.cftc.gov/PressRoom/SpeechesTestimony/opabehnam15?utm_source=govdelivery

Changing Weather Patterns: Risk Management for Certain Uncertain Change

February 14, 2020

Introduction

Good morning.  I would like to thank the Crop Insurance & Reinsurance Bureau for the invitation to be here with you in Florida to discuss some issues and initiatives I am working on related to the impact of climate change on financial markets and the challenges we are collectively facing.  I will begin with a brief overview of the Commodity Futures Trading Commission (the “CFTC” or “Commission”), then I will provide a little personal history of how I developed an interest in the impact of weather and climate change on risk management, and finally I will discuss a current initiative I am spearheading at the Commission.  Before I begin, please allow me to remind you that the views I express today are my own and do not represent the views of the CFTC or my fellow Commissioners.

The Commission

As a quick level set, the CFTC is a bipartisan, five-member federal regulatory agency that serves as the U.S. derivatives market regulator.  For decades, the CFTC has established and enforced market-based rules under the Commodity Exchange Act, which is also the enabling statute that created the Commission.  Our mission is to foster open, transparent, competitive and financially sound markets; prevent and deter price manipulation and other disruptions to market integrity; and to protect all market participants and the public from fraud, manipulation, and abusive practices.[1]  The CFTC accomplishes its mission through a system of effective self-regulation, direct oversight, and a strong enforcement program.

In 2010, Congress greatly expanded the CFTC’s regulatory responsibility with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act.[2]  In addition to the futures and options markets, the CFTC now oversees the swaps market and various swap market participants.  The vast majority of the derivatives contracts the CFTC oversees are based on underlying financial commodities, including global currencies and interest rates.  However, the Commission has a deep history and commitment to supporting the entire American agricultural value chain through the oversight of futures, options, and swaps in agricultural commodities, ensuring a safe, transparent, and liquid marketplace for agricultural stakeholders to manage risk.[3]

The Committee

More personally, sandwiched between a number of professional years focused in finance and the law in the New York metropolitan area, and my current position at the CFTC, I was fortunate to serve as Senior Counsel on the Senate Committee on Agriculture, Nutrition, & Forestry for Michigan Democrat, Senator Debbie Stabenow.  Those more than six years of education and experience shaped my understanding and views regarding the multitude of risks farmers and ranchers face.  I was fortunate to be a part of then Chairwoman Stabenow’s successful effort to lead passage of the bipartisan 2014 Farm Bill.[4]  Like today, the few years leading up to the 2014 Farm Bill presented many new and evolving risks for the agricultural economy, which demanded fresh thinking of how to appropriately update and strengthen legacy risk management programs.

What was particularly unique leading up to 2014 was Senator Stabenow’s focus on risks related to climate change.  Weather and climate present the greatest, consistent—yet uncertain— risks to the agricultural economy and rural communities.  More frequent and more severe extreme weather events, from flooding, hurricanes, and tornadoes, to wildfires have presented a growing set of longer term challenges that require a different way of assessing long-term risk management and the policies to support it.  To give you some perspective, according to one report, the average number of extreme weather events per year has more than tripled since the 1980s.[5]  Further, according to the National Oceanic and Atmospheric Administration (NOAA), the number of events resulting in losses exceeding $1 billion (USD) each since 1980 has more than doubled in the most recent five years (2015-2019) from an annual average of 6.5 to 13.8 events.[6]

In part, many of the climate-related disasters agricultural producers and rural communities faced leading up to 2014 helped garner support for the inclusion of a wide range of Farm Bill programs in the final law.  Everything from more robust crop insurance and disaster safety net programs, to the most significant investment in working lands conservation programs that can help sequester carbon through things like cover crops, to programs that support healthy forests, renewable energy, and agricultural research—these all help farmers and rural communities become more resilient and a part of the solution.  Many of these same programs were strengthened and included in the 2018 Farm Bill.[7]  These policies and programs are not what most people think of as traditional climate mitigation policies; but they each are targeted, effective programs meant to support and incentivize better long term agricultural and forestry practices that tackle climate change head on.

The Cause

Pivoting to the autumn 2017, I joined the CFTC and had a new mission that was laser-focused on the derivatives markets.  As I mentioned, we are a Commission of five.  While the Chairman oversees the administrative functions of the Commission—such as supervising Commission personnel and directing their work agenda to fulfil the Commission’s larger policy agenda[8]—each commissioner sponsors an advisory committee.  The CFTC’s advisory committees were created to provide input and make recommendations to the Commission on regulatory and market issues.  The committees are tremendous Commission assets in that they convene the exchanges, market participants, market service providers, end users, academia, and public interest groups, and provide policy recommendations to the full Commission for consideration.  Since 2017, I have sponsored the Market Risk Advisory Committee or “MRAC.”

The MRAC advises the Commission on matters relating to evolving market structures and movement of risk across the derivatives markets.  It examines systemic issues that threaten the stability of the derivatives and other financial markets.  The MRAC is comprised of 37 member-representatives from clearinghouses, exchanges, intermediaries, market participants, academia, and regulators.

The MRAC and its objectives—set out in a charter[9]—helped focus me as I considered what I wanted to achieve during my term.  During those first few months, I took a step back from speechmaking, and focused on partaking in dozens of meetings and conversations all across the country in an effort to formulate the goals and ideals that would guide and anchor me for the next few years.  I wanted to make sure my goals and ideals were grounded in the real-world concerns and challenges facing market participants.  It was during these months that I started to connect the dots between climate change and financial market risk, and what role policy makers should and could play to mitigate these more extreme, emerging risks, specifically with respect to financial market participants.

While my lens is naturally focused on U.S. markets, at the same time I was threading the needle on why climate change ought to be brought to the forefront of our policy agenda, by mid-2017, the Bank of England (BOE), under Governor Mark Carney’s leadership, had successfully pushed this issue to the front of its agenda.[10]  By the end of 2017, eight central banks and supervisors convened the Network for Greening the Financial System (NGFS).[11]  Even earlier, in December of 2015, the Financial Stability Board (FSB) established the Task Force on Climate-related Financial Disclosures (TCFD) to focus on the development of voluntary, consistent company disclosures to help financial market participants understand their climate-related risks.[12]  Private financial institutions were beginning to publicize what they perceived as climate related financial market risk and how to address it.[13]  Additionally, I was certainly cognizant of the critical role climate has naturally (and obviously) played within insurance and reinsurance markets for decades, and appreciate much of the work that has been done recently to support more open dialogues about the risks climate change poses to the insurance industry and its users.

The Current Initiative

It took a few years to get those dots aligned enough to bring them to the attention of the MRAC.  As sponsor, I develop the MRAC’s agenda through collaboration with the MRAC members as well as input from the public.  I am proud to say that since 2017, the MRAC has convened to address a variety of matters, including the impending transition away from the London Interbank Offered Rate, more commonly known as Libor.[14]  Also, the MRAC has held discussions on market structure issues, clearinghouse risk issues, and even crypto asset markets — I am talking about Bitcoin.

But, last June, I got to combine my experience in the Senate—specifically those early deliberations regarding climate change—with my professional experience in financial markets, and my current role as a financial market regulator.  The MRAC held a public meeting on the relationship between climate change and financial market risk.[15]  In my biased view, the meeting was a great success.  However, it was always my intention that the public meeting would be the first step in building a more comprehensive, longer term initiative that is now well under way.

In November 2019, following full Commission approval, I formed a subcommittee within the MRAC, the Climate Related Financial Market Risk Subcommittee (the “Subcommittee”).  Chaired by Bob Litterman,[16] founding partner and Risk Committee Chairman of Kepos Capital, the Subcommittee includes 35 experts from financial markets, the banking and insurance sectors, as well as the agricultural and energy markets, data and intelligence service providers, the environmental and sustainability public interest sector, and academic disciplines singularly focused on climate change, adaptation, public policy, and finance. [17]  Each member has demonstrated expertise in one or more disciplines in which they have devoted significant time and consideration to the challenges presented by the risks of climate change.  Again, in my biased view, the Subcommittee includes some of the sharpest minds on climate related financial market risk and represents a first-of-a kind U.S.-based comprehensive, inclusive effort to study and address the issues.  The Subcommittee Chairman has committed to providing a report containing policy recommendations by June of this year.

The Certain Uncertainty

As I crafted the charge and mandate of the Subcommittee last summer, I thought about economic and financial market climate risks very basically, and subsequently stacked hypotheticals and different scenarios on top of each other.  Unfortunately, the planet has experienced more severe and frequent extreme weather events which have affected our communities and their economies.  In 2019, there were 820 global natural disaster events causing overall losses of $150 billion (USD).[18]  Of those events, 38% were storms; 45% were floods, flash floods and landslides; and 10% were heatwaves, cold spells, and wildfires.[19]  According to NOAA, 2019 was the fifth consecutive year (2015-2019) in which 10 or more billion-dollar weather and climate disaster events impacted the United States.[20]  In fact, we broke another record last year:  July 2018-June 2019 marked the wettest 12 months this country experienced since records began 125 years ago.  I’ll repeat that:  July 2018-June 2019 marked the wettest 12 months in this country’s recorded history.[21]

The International Monetary Fund (IMF) is adding climate-related factors into its existing stress-testing methodology to help government and private-sector leaders prepare for potential financial shocks triggered by climate change.  According to a paper it released last week, global weather-related insured losses increased to $138 billion (USD) in 2017.[22]  To provide some perspective, such losses had increased from about $10 billion (USD) in the 1980s to about $50 billion (USD) in the last decade.

Focusing on U.S. agricultural commodities, according to a USDA report, agricultural producers reported they were not able to plant crops on more than 19.4 million acres in 2019.[23]  This marked the most prevented plant acres reported since USDA’s Farm Service Agency (FSA) began releasing the report in 2007, and 17.49 million acres more than reported at that time in the previous year.  Of those acres, more than 73% were in 12 Midwestern states, where the heavy rainfall and flooding prevented many producers from planting core commodities like corn, soybeans and wheat.[24]  Flood-related federal crop insurance payouts for the 2019 growing season were reported as totaling more than $6.4 billion (USD) so far—the costliest on record.[25]

Grain storage, livestock, ethanol, processing plants, and rail were all negatively affected by what the New York Times has called “The Great Flood of 2019.”[26]  Cash markets were impacted because there were fewer bids from grain elevators and processors.  In May, the CME Group, our market’s largest agricultural commodity exchange, declared a Force Majeure with respect to corn and soybean shipping stations due to flooding on the Illinois and Mississippi Rivers.[27]  While the market resolves itself over time, the fabric of the market changes.  American farmers are under more stress than during the 1980s farm crisis, going out of business with farm debt rising about 4% in 2019 to $427 million (USD) and with farm debt-to-income at the highest level since 1984.[28]  U.S. farm bankruptcies were up 20% in 2019—an eight-year high.[29]

The devastating wildfires in California, which among other things, resulted in PG&E, California’s largest utility, becoming the first “corporate casualty of climate change” when it filed for bankruptcy, citing an estimated $30 billion in liabilities and 750 lawsuits from the wildfires.[30]  This is just one example of a new reality that needs to be addressed.  And this is not to discount the devastation from the wildfires in Australia more recently.  These are all manifestations of the physical risks associated with changing climate and extreme weather events.  Damage to property, infrastructure, and land makes it unusable for a period of time — if not permanently—and these are only the more direct effects.  Secondary, indirect, and risk feedback loops further manifest through lower or lost asset value and increased default risk on mortgages and loans due to a number of factors, including some very harsh realities in terms of job loss and forced migration.

From a financial markets perspective, how do these physical risks manifest in credit markets and lending relationships between counterparties on a local, regional, or even national level?  We are facing increasing financial risks as a result of potential bank loan losses due to business interruptions and bankruptcies caused by extreme weather events.  These losses have a compounding effect as extreme weather events—especially for the uninsured—can impact both the creditworthiness of the borrowers and the value of the loan collateral, translating to higher probability of default and higher losses in the event of a default.[31]  As noted by Lael Brainard, Member of the Board of Governors of the Federal Reserve System, feedback loops could also develop between the effects on the real economy and those on the financial markets.[32]  If property prices fail to reflect climate related risks, a sudden correction could result in losses to financial institutions, which could in turn reduce lending in the economy, leading to further knock-on effects.

And there are the transition risks associated with adjustments to a low-carbon economy, such as losses in the value of assets or corporations that depend on fossil fuels.  And given the lessons from the 2008 financial crisis, specifically the interconnectedness of global financial markets, this begs the question of how, if at all, do local and regional market disruptions resulting from extreme climate events affect market resiliency and stability in an increasingly concentrated banking system?

Climate change is a risk management challenge that presents uncertain and potentially severe consequences over time.  It manifests as multiple intersecting and uncertain future hazards, acting as a risk multiplier with other stressors that create new risks and alter existing ones.[33]  According to the Fourth National Climate Assessment, global average temperature increased by about 1.8°F from 1901 to 2016, and the evidence does not support any credible natural explanations for this amount of warming; rather the evidence points to human activities in the form of emissions of greenhouse gases, as the dominant cause.[34]  According to NOAA, 2019 was the second-hottest year in its 140-year climate record, just behind 2016.[35]  Indeed, the world’s five warmest years have all occurred since 2015, with nine of the 10 warmest years occurring since 2005.[36]  Sea level rise threatens significant damage to property, not only homes and businesses, but public assets and infrastructure, adding significant contingent liabilities to taxpayers.  In the U.S., a study found that between 2005 and 2017, sea level rise wiped $14.1 billion (USD) off of home values in coastal states from Connecticut to Florida.[37]  NOAA’s Office for Coastal Management predicts that if we continue on the current path, by 2050, up to $106 billion worth of coastal property will likely be below sea level.[38]

Beyond reducing or erasing home values, sea level rise displaces people and can lead to increased salinization of soil and water resources used for irrigation, especially in delta regions.  Low income and marginalized communities, both in urban and rural areas, already suffer from food security issues and have lower levels of liquid saving to meet emergency expenditures.  These communities will be less resilient when faced with the impacts and ripple effects of extreme weather and climate change on income, property value, and health[39]

The data suggest a likely pattern of more extreme, frequent weather, and we must prepare now by, among other things, beginning the transition to a low-carbon economy.  However, we must consider the risks associated with the transition toward carbon-neutral energy sources.  More specifically, as technology, policy, and consumer preferences change, how will these migrations affect asset prices of businesses not prepared for the transition?  This could leave assets stranded. Wholesale portfolios such as coal mining, power generation, and oil and gas are especially exposed to transition risks.  There are larger economic repercussions that could occur if the transition is not executed in a thoughtful manner, and the costs associated with both transition and physical risks depend on the trajectory chosen for reducing carbon emissions.

Insurers need to increase their focus on climate risk to investments, and they will need access to reliable data to accurately measure and manage that risk.  For example, a 2016 survey of California-licensed insurers indicated that survey participants had $528 billion (USD) in fossil fuel related investments.  These include investments in coal, oil and gas utilities that rely on fossil fuels to generate electricity.[40]  The TCFD recommends that insurers undertake climate risk scenario analysis of investment portfolios and in November of last year, formed an advisory group to assist it in developing practical guidance on climate-related scenario analysis.[41]  The BOE’s April 2019 Supervisory Statement set out expectations for UK banks and insurers to develop and embed risk management practices, including conducting scenario analyses to inform strategy setting, and risk assessment, and risk identification. [42]  In December, the BOE published a discussion paper setting out its proposed framework for the 2021 Biennial Exploratory Scenario (“BES”) Exercise.  The objective of this Exercise is to test the resilience of the largest banks and insurers against the physical and transition risks associated with different possible climate scenarios, as well as the financial system’s broader exposure to climate risk.[43]

Critical Movement

As I mentioned early on, core policy responses to climate risk are gaining traction with many different regulatory actors—including from the BOE, the TCFD, the NGFS, as well as the UK’s Financial Conduct Authority, and more recently the Federal Reserve.[44]  I am further heartened that awareness, analysis and action appear to be snowballing in the private sector.  In the past few months alone, we have witnessed industry leaders taking meaningful steps to begin to meet this challenge.  A shared focus has been the development of a standardized taxonomy; a common language for defining activities and financial instruments so that we can measure, evaluate, and respond to risk on a level playing field.  As investors, market actors, and policymakers increasingly focus allocation of capital in facilitating transition to a low-carbon economy, disclosures and reporting become a key charge.  The TCFD has been very successful in moving the conversation forward regarding standardized disclosures and reporting.[45]  Additionally climate risk related best practices and governance measures are critical to changing habits to better align incentives for a transitioning economy, and the BOE and European Central Bank have been key proponents.  Finally, as I mentioned, scenario analysis and stress testing are critical tools to evaluating resiliency.  Concerning climate, both scenario analysis and stress testing become increasingly difficult exercises because of the uncertainty of climate outcomes.  How wide a lens or improbable a scenario should we consider?

Conclusion

Many critical issues remain to be tackled, and each seems to be as mired in complexity as they can be.  Given the certainty that we need a plan—as of yesterday—to deal with the uncertain but real impacts of climate change on the natural, human, and financial systems, I am confident that  convening the Subcommittee will lead to thoughtful, actionable and data-driven recommendations to move Commission—and perhaps larger U.S. and global financial—policy in the right direction.  The Subcommittee is just one part of what needs to be a collective action.  In my view, it’s critical to have private sector and public sector participants, a public-private partnership, contributing to this evolving, but critical conversation.  Further, we cannot rest while waiting for the perfect.  Action is required now, and every step – however big or small – is a positive step towards addressing these risks.

Thank you again for allowing me to share my views.

[1] Commodity Exchange Act § 3, 7 U.S.C. § 5 (2012).

[2] Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010).

[3] CFTC, What is the CFTC’s Role in the Agricultural Economy?, https://www.cftc.gov/sites/default/files/2019-12/oceo_cftcrolebrochure032117.pdf.

[4] Agricultural Act of 2014, Pub. L. No. 113-79, 128 Stat. 649 (2014).

[5] Willem Buiter & Benjamin Nabarro, Managing the Financial Risks of Climate Change, Citi GPS 11 (Oct. 2019), https://www.citivelocity.com/citigps/managing-financial-risks-climate-change/.

[6] U.S. Billion-Dollar Weather and Climate Disasters, NOAA National Centers for Environmental Information (2020), https://www.ncdc.noaa.gov/billions/.

[7] Agricultural Improvement Act of 2018, Pub. L. No. 115-334, 132 Stat. 4491 (2018).

[8] Commodity Exchange Act § 2(a)(2)(A), 2(a)(6), 7 U.S.C. § 2(a)(2)(A), 2(a)(6) (2012).

[9] See, U.S. Commodity Futures Trading Comm’n, Renewal Charter of the Market Risk Advisory Committee (May 9, 2018), https://www.cftc.gov/About/CFTCCommittees/MarketRiskAdvisoryCommittee/index.htm.

[10] See, Matthew Scott, Julia van Huizan, and Carsten Jung, The Bank of England’s response to climate change, Quarterly Bulletin, 2017 Q2, Bank of England 98 (June 16, 2017), https://www.bankofengland.co.uk/quarterly-bulletin/2017/q2/the-banks-response-to-climate-change.

[11] Origin and Purpose, Network for Greening Fin. Sys. (last updated Sep. 13, 2019, 2:47 PM), https://www.ngfs.net/en/about-us/governance/origin-and-purpose.

[12] Press Release, Financial Stability Board, FSB to establish Task Force on Climate-related Financial Disclosures (Dec. 4, 2015), https://www.fsb-tcfd.org/wp-content/uploads/2016/01/12-4-2015-Climate-change-task-force-press-release.pdf.

[13] See, e.g., The Investor’s Guide to Climate Change, Morgan Stanley (Dec. 2015), https://www.theatlantic.com/sponsored/morgan-stanley/the-investors-guide-to-climate-chante/696/.

[14] See Rostin Behnam, Commissioner, CFTC, Remarks of Commissioner Rostin Behnam at the ISDA/SIFMA AMG Benchmark Strategies Forum, New York, New York (Feb. 12, 2020), https://www.cftc.gov/PressRoom/SpeechesTestimony/opabehnam14.

[15] Information on all of the MRAC meetings, including press releases, archived webcasts, and presentation materials are available at https://www.cftc.gov/About/CFTCCommittees/MarketRiskAdvisoryCommittee/mrac_meetings.html.

[16] e.g., Bob Litterman, The Very High Costs of Climate Risk, N.Y. Times (Dec. 11, 2019), https://www.cftc.gov/media/3181/MRAC_Litterman121119/download.

[17] See Press Release Number 8079-19, CFTC, CFTC Commissioner Rostin Behnam Announces Members of the Market Risk Advisory Committee’s New Climate-Related Market Risk Subcommittee (Nov. 14, 2019), https://www.cftc.gov/PressRoom/PressReleases/8079-19.

[18] Petra Löw, Natural Catastrophes in 2019, Munich Re: NatCatSERVICE (Jan. 2020), https://www.munichre.com/content/dam/munichre/global/content-pieces/documents/media-relations/Factsheet-natural-disasters-2019.pdf/_jcr_content/renditions/original./Factsheet-natural-disasters-2019.pdf.

[19] Petra Löw, Ernst Rauch, and Mark Bove, Tropical Cyclones Cause Highest Losses: Natural Disasters of 2019 in Figures, Munich Reinsurance Company (Jan. 9, 2020), https://www.munichre.com/topics-online/en/climate-change-and-natural-disasters/natural-disasters/natural-disasters-of-2019-in-figures-tropical-cyclones-cause-highest-losses.html.

[20] See NOAA, supra note 6.

[21] U.S. has its wettest 12 months on record – again, NOAA (July 9, 2019), https://www.noaa.gov/news/us-has-its-wettest-12-months-on-record-again.

[22] Tobias Adrian, James Morsink, and Liliana B. Schumacher, Stress Testing at the IMF, Department Paper No. 20/04, IMF: Monetary and Capital Mkts. 45 (2020), https://www.imf.org/en/Publications/Departmental-Papers-Policy-Papers/Issues/2020/01/31/Stress-Testing-at-the-IMF-48825.

[23] Press Release, United States Department of Agriculture, Farm Service Agency, Report: Farmers Prevented from Planting Crops on More than 19 Million Acres (Aug. 12, 2019), https://www.fsa.usda.gov/news-room/news-releases/2019/report-farmers-prevented-from-planting-crops-on-more-than-19-million-acres.

[24] Id.

[25] Ryan McCrimmon, Crop insurance payouts hit record $6.4B in 2019, Politico: Morning Agriculture (Feb. 4, 2020 10:00 AM), https://www.politico.com/newsletters/morning-agriculture/2020/02/04/the-trade-aid-train-keeps-chugging-785021.

[26] Sarah Almukhtar, Blacki Migliozzi, John Schwartz and Josh Williams, The Great Flood of 2019: A Complete Picture of a Slow-Motion Disaster, N.Y. Times (Sept. 11, 2019), https://www.nytimes.com/interactive/2019/09/11/us/midwest-flooding.html.

[27] See SER-8380, CME Group, Declaration of Condition of Force Majeure at Corn and Soybean Shipping Stations Due to Flooding on the Illinois and Mississippi Rivers and Load-Out Impossibility (May 2, 2019), https://www.cmegroup.com/notices/market-regulation/2019/05/SER-8380.html#pageNumber=1.

[28] Isis Almeida, Crazy Midwest Weather Spurs Hardest Year Ever for U.S. Farms, Bloomberg (Aug. 28, 2019), https://www.bloomberg.com/news/articles/2019-08-28/crazy-midwest-weather-spurs-hardest-year-ever-for-u-s-farmers.

[29] John Newton, The Verdict Is In: Farm Bankruptcies Up in 2019, Am. Farm Bureau Fed’n (Jan. 29, 2020), https://www.fb.org/market-intel/the-verdict-is-in-farm-bankruptcies-up-in-2019; see also, P.J. Huffstutter, U.S. farm bankruptcies hit an eight-year high: court data, Reuters (Jan. 30, 2020), https://www.reuters.com/article/us-usa-farms-bankruptcy/us-farm-bankruptcies-hit-an-eight-year-high-court-data-idUSKBN1ZT2YE.

[30] Russell Gold, PG&E: The First Climate-Change Bankruptcy, Probably Not the Last, Wall St. J. (Jan. 18, 2019), https://www.wsj.com/articles/pg-e-wildfires-and-the-first-climate-change-bankruptcy-11547820006.

[31] See Transition in thinking: The impact of climate change on the UK banking sector, Bank of England, Prudential Regulation Authority 7-8 (Sept. 2018), https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/report/transition-in-thinking-the-impact-of-climate-change-on-the-uk-banking-sector.pdf.

[32] Lael Brainard, Member, Board of Governors of the Federal Reserve Board, Why Climate Change Matters for Monetary Policy and Financial Stability (Nov. 8, 2019), https://www.federalreserve.gov/newsevents/speech/files/brainard20191108a.pdf.

[33] C.P. Weaver, et al., Reframing climate change assessments around risk: recommendations for the National Climate Assessment, 2017 Envtl. Res. Letter 12 080201 (2017), https://iopscience.iop.org/article/10.1088/1748-9326/aa7494/pdf.

[34] Sarah Doherty et. al, Our Changing Climate, in Fourth National Climate Assessment, Volume II 74, 76 (Linda O. Mearns ed., 2019), https://nca2018.globalchange.gov/chapter/2/.

[35] 2019 was 2nd Hottest Year on Record for Earth Say NOAA, NASA, NOAA (Jan. 15, 2020), https://www.noaa.gov/news/2019-was-2nd-hottest-year-on-record-for-earth-say-noaa-nasa.

[36] Id.

[37] World Econ. Forum, The Global Risks Report 2019 57 (14th ed. 2019), http://www3.weforum.org/docs/WEF_Global_Risks_Report_2019.pdf.

[38] Fast Facts Climate Change Predictions, NOAA Office for Coastal Management, https://coast.noaa.gov/states/fast-facts/climate-change.html (last visited Feb. 7, 2020).

[39] See Brainard, supra note 32; see also Christopher W. Avery, et.al, OverviewI, in Fourth National Climate Assessment, Volume II 33, 36 (Linda O. Mearns ed., 2019), https://nca2018.globalchange.gov/chapter/1/https://nca2018.globalchange.gov/chapter/1/.

[40] Int’l Ass’n of Ins. Supervisors, Issues Paper on Climate Change Risks to the Insurance Sector 65-66 (July 2018), https://www.unepfi.org/psi/wp-content/uploads/2018/08/IAIS_SIF_-Issues-Paper-on-Climate-Change-Risks-to-the-Insurance-Sector.pdf.

[41] Press Release, TCFD, The Task Force on Climate-related Financial Disclosures Forms Advisory Group on Climate-related Scenario Guidance (Nov. 14, 2019), https://www.fsb-tcfd.org/wp-content/uploads/2019/11/Announcement-Formation-of-TCFD-Advisory-Group-on-Scenario-Guidance-FINAL-1.pdf.

[42] Supervisory Statement SS3/19, Bank of England, Enhancing banks’ and insurers’ approaches to managing the financial risks from climate change (Apr. 2019), https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/supervisory-statement/2019/ss319.

[43] News Release, Bank of England, Bank of England consults on its proposals for stress testing the financial stability implications of climate change (Dec. 18, 2019), https://www.bankofengland.co.uk/-/media/boe/files/news/2019/december/boe-consults-on-proposals-for-stress-testing-the-financial-stability-implications-of-climate-change.pdf?la=en&hash=F5793F43311398FA061D5FD41A2E668A0E9252F9.

[44] See, e.g., Brainard, supra note 32; Glenn D. Rudebusch, FRBSF Economic Letter 2019-09, Climate Change and the Federal Reserve (Mar. 25, 2019), https://www.frbsf.org/economic-research/publications/economic-letter/2019/march/climate-change-and-federal-reserve/; News Release, FRBSF, San Francisco Fed Hosting Economics of Climate Change Research Conference (Nov. 7, 2019), https://www.frbsf.org/our-district/press/news-releases/2019/san-francisco-fed-hosting-economics-of-climate-change-research-conference/.

[45] Press Release, TCFD, Second TCFD Status Report Shows Steady Increase in TCFD Adoption (June. 5, 2019), https://www.fsb-tcfd.org/wp-content/uploads/2019/06/Press-Release-2019-TCFD-Status-Report_FINAL.pdf.

 

PUBLIC STATEMENTS & REMARKS

Remarks of Commissioner Rostin Behnam at the ISDA/SIFMA AMG Benchmark Strategies Forum 2020, New York, New York

https://www.cftc.gov/PressRoom/SpeechesTestimony/opabehnam14?utm_source=govdelivery

February 12, 2020

Introduction

Good morning.  I want to thank Scott O’Malia and his staff at the International Swaps and Derivatives Association (ISDA) and SIFMA AMG for holding this important event and giving me an opportunity to participate.  Before I begin, please allow me to remind you that the views I express today are my own and do not represent the views of the Commodity Futures Trading Commission (“CFTC” or “the Commission”) or my fellow Commissioners.

While I would like to believe that my sharp delivery and silver tongue are the reasons why Scott and ISDA keep bringing me back for events like this, I know the truth is that I have more than likely simply earned the spot for being persistently engaged and dogged in my message.  I arrived at the Commission just a few months after Andrew Bailey, Chief Executive of the UK Financial Conduct Authority (FCA) and soon-to-be Governor of the Bank of England, acknowledged that despite significant improvements to LIBOR in the wake of scandal, the goal of anchoring LIBOR (the London Inter-Bank Offered Rate) submissions and rates to the greatest extent possible to actual transactions could not be achieved.[1]  The systemically important benchmark was in a critical, terminal condition, and through negotiation, will remain live until the end of 2021.  Even then it was clear we were potentially facing a future of a non-representative LIBOR when the panel banks’ palliative submissions would no longer support LIBOR’s function as a representative benchmark.  A global cooperative effort led by regulatory authorities working closely with the public and private sectors was the only path to make it to the LIBOR “end game” as Edwin Schooling Latter, Director of Markets and Wholesale Policy at the FCA, has dubbed it.[2]  As a newly sworn-in market regulator, I knew I had to take action immediately and commit myself and my resources to ensuring that LIBOR would pass smoothly to a new alternative set of risk-free reference rates (“RFRs”).

My first commitment was to take over sponsorship of the CFTC’s Market Risk Advisory Committee (MRAC).  The MRAC advises the Commission on matters relating to evolving market structures and the movement of risk across clearinghouses, exchanges, intermediaries, market makers and end users.  It examines systemic issues that threaten the stability of derivatives and other financial markets, and makes recommendations on how to improve market structure and mitigate risk.  MRAC members include representatives from clearinghouses, exchanges, intermediaries, academia, and market participants.  In July of 2018, I convened MRAC to focus on benchmark reform in an effort to unpack the myriad impending issues specifically related to the derivatives market.[3]

Soon thereafter, the Commission voted to establish the Interest Rate Benchmark Reform Subcommittee (“Subcommittee”) to provide reports and recommendations to the MRAC regarding efforts to transition U.S. dollar derivatives and related contracts to SOFR (the Secured Overnight Financing Rate), the RFR for the US dollar, selected through a public-private committee convened and sponsored by the Federal Reserve to facilitate the transition in the U.S. known as the Alternative Reference Rates Committee or ARRC, and the impact of such transition on the derivatives markets.[4]  Tom Wipf chairs the Subcommittee.  Tom also serves as the chair of the ARRC and is on ISDA’s Board, so I am pretty confident we found the right person for the job.

My goal at the time was to use the subcommittee to complement the work of the ARRC by raising awareness and shedding light on the potential challenges as we head towards 2021, identifying the risks for financial markets and individual consumers, and, above all else providing solutions within the derivatives space.

Today, I would like to provide you an overview of our current efforts here in the U.S., with a focus on recent progress of the ARRC and the Subcommittee, and some initiatives that are kicking off shortly.  I’m cognizant that you have a full day ahead of you, and will hear from many distinguished guests.  Therefore, I will keep these remarks brief so that we have some time for questions at the end.

The Word of the Day is “Progress”

American architect, inventor, systems theorist, author, designer, futurist and environmental activist Richard Buckminster Fuller is quoted as saying, “You never change things by fighting existing reality.  To change something, build a new model that makes the existing model obsolete.”  Bucky, and, yes, he did go by that, passed away in 1983, but being a futurist, his words on progress are apt for today.

We have all agreed that to avoid LIBOR risks, we must move away from it altogether; we must find a new model that makes LIBOR obsolete.  Across the globe, our various jurisdictions have chosen new RFRs, and liquid markets for swaps and futures are building around them.  ISDA has led the charge on an initiative—at the request of the Financial Stability Board’s Official Sector Steering Group (FSB OSSG)—to identify fallbacks for derivatives contracts referencing certain key IBORs(Inter-Bank Offered Rates).  These contractual fallback provisions will provide for adjusted versions of RFRs as replacement rates upon the discontinuation of the relevant IBOR and will be incorporated into ISDA’s Definitions via a protocol for derivative contracts as amendments.

In the U.S., to support the transition to SOFR, the ARRC developed the Paced Transition Plan, which specifies steps and provides timelines designed to support and encourage SOFR adoption.  A 2019 set of Incremental Objectives complements the Transition Plan by outlining key priorities and milestones to support and prepare market participants for the transition.  To build liquidity, the ARRC has focused on supporting the launch and usage of SOFR-based financial products in the market.  As of the end of January, notional amount outstanding in SOFR swaps was $2.1 trillion (USD), and in SOFR futures, $1.6 trillion (USD).  We are seeing a regular increase in traded volumes and notional outstanding for both futures and swaps.

As a complement to ISDA’s work on benchmark fallbacks in the derivatives space, the ARRC has released final recommended language on USD LIBOR fallback contract language for syndicated loans, bilateral loans, floating rate notes and securitizations.  These provisions may be used by market participants in both legacy and new contracts that reference LIBOR and are intended to reduce the risk of serious market disruption upon a determination that LIBOR is no longer viable.[5]  I just want to take a moment to acknowledge the great care that has been taken by the different ARRC working groups to achieve consistent outcomes across the various cash and loan markets, in addition to ISDA’s work on derivatives.

In response to ARRC requests, last December the, three divisions of the CFTC issued staff no-action letters providing relief to market participants relating to the transition of swaps referencing IBORs.  More specifically, the Division of Swap Dealer and Intermediary Oversight issued CFTC Letter 19-26 providing relief to swap dealers from registration de minimis requirements, uncleared swap margin rules, business conduct requirements confirmation, documentation, and reconciliation requirements, and certain other eligibility requirements.  The Division of Market Oversight issued CFTC Letter 19-27 providing time-limited no-action relief from the trade execution requirement, while the Division of Clearing and Risk issued CFTC Letter 19-28 providing time limited relief from the swap clearing requirement and related exceptions and exemptions.[6]

Also in December, the five agencies generally referred to as the U.S. prudential regulators reopened the comment period on a proposed rule to change swap margin rules to facilitate the implementation of prudent risk management strategies at certain banks and swap entities to allow commenters additional time to analyze the proposed rulemaking.  In part, to aid in the transition away from LIBOR the proposed rulemaking would allow certain technical amendments to legacy swaps without altering their status under the swap margin rules.[7]

Last week, the Federal Housing Finance Agency (FHFA) announced that the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac will stop accepting adjustable-rate mortgages (ARMs) based on LIBOR by the end of 2020.  The GSE’s announced that they plan to begin accepting ARMs based on SOFR later in 2020.  FHFA has worked with Fannie Mae and Freddie Mac to develop a model for a SOFR-based ARM.  Both Fannie Mae and Freddie Mac also announced they would adopt the fallback language the ARRC recommended to ensure contracts would continue to be effective in the event that LIBOR is no longer usable.  FHFA’s regulated entities are now regular issuers of SOFR-indexed debt.  FHFA has instructed the Federal Home Loan Banks (FHLBs) to stop purchasing LIBOR-based investments with maturities that extend past December 31, 2021.  It has also instructed the FHLBs to no longer enter into other LIBOR-based transactions involving advances, debt, derivatives, or other products with maturities beyond December 31, 2021 as of March 31, 2020, with only limited exceptions granted by FHFA.[8]

While I could keep going, I will pause here to simply state that while we have made tremendous progress to date from a regulatory and market perspective, time is running short to make our transition complete.  There are still too many firms fighting the existing reality by failing to ensure that contracts that do rely on LIBOR have clear, effective fallbacks to address the prospective end of LIBOR.  While some participants might prefer that regulators force the change through rule making, this is not the approach global authorities have taken.  Authorities have stood ready to facilitate, but our policies, mandates, and missions do not always support requiring compulsory industry standard setting or change through regulation.  Nevertheless, as we move further into 2020, and the FCA has made it even more clear that to the extent a non-representative LIBOR could exist, its lifetime would amount to a relatively brief period of unpredictability and likely, volatility.[9]  It remains critically important that we have broad participation in the consultative efforts led by the ARRC and ISDA, as well as those raised in the MRAC.

Getting back to MRAC, I am proud of the accomplishments and progress made by the MRAC and the Subcommittee’s work and contributions to the larger efforts by our domestic and international counterparts.  As an important first deliverable in September, the MRAC approved plain English disclosures for new derivatives referencing LIBOR and other IBORS.[10]

This standard set of disclosures, prepared by the Interest Rate Benchmark Reform Subcommittee, is intended as a helpful example of “plain English” disclosures that market participants could use, as they deem appropriate, with all clients and counterparties with whom they continue to transact derivatives referencing LIBOR and other IBORs.  The disclosures inform clients and counterparties about the implications of using such products and provide additional transparency to the market.  That said, the “plain English” disclosures are not meant and should not undermine efforts to complete the transition in an orderly and timely manner.  More generally, the disclosures provide a tool as we collectively work towards completing the transition away from LIBOR.

During our last meeting on December 11, 2019,[11] the Interest Rate Benchmark Reform Subcommittee provided a status report covering its three work streams:  (1) the Initial Margin Working Group (2) the Clearing Working Group; and (3) the Disclosure Working Group.  We also heard from the CFTC’s Office of the Chief Economist (OCE) and the Initial Margin Working Group on the impact of transitioning certain legacy IBOR-linked derivatives to risk free rates.  Specifically, Richard Haynes, a CFTC Supervisory Research Analyst, discussed an OCE-published CFTC research paper, “Legacy Swaps under the CFTC’s Uncleared Margin and Clearing Rules.”[12]  The paper provides important data about the landscape for legacy swaps, which are swaps executed prior to the implementation of the CFTC’s Title VII margin and clearing mandate.  I believe the paper’s conclusions cement the important role the CFTC and other regulators should play in providing critical market data and regulatory relief for market participants, where needed and when appropriate, as we collectively stride towards benchmark transition.

The penultimate discussion centered on ISDA’s fallback consultations, including pre-cessation triggers and the parameters for benchmark fallback adjustments.  These are critically important issues, and as I will discuss shortly, are going to take center stage in the next months.  Among many other efforts since 2016, ISDA has spearheaded this critical work as part of the larger global benchmark transition effort, and the entire organization deserves recognition for excellent and timely work.

The final discussion featured proposals from the CME and LCH for transitioning price alignment interest (PAI) and discounting for U.S. dollar over-the-counter cleared swaps to SOFR.  This discussion was a continuation from the September 2019 meeting.  Differences between the respective proposals were recognized as potentially economically and operationally challenging, but the message from the Subcommittee was clear:  consistency across clearinghouses is key. CME and LCH have coalesced around a single transition date in mid-October 2020, “the Single Step” event.  Given the operational challenges and hugely critical importance of this event, and to improve market transparency into the economic and operational dynamics of a single-step transition, the Subcommittee recommended that the MRAC sponsor a “table-top” exercise involving both clearinghouses, clearing members, dealers, clients and end-users, well in advance of the October 2020 switch date.  The Subcommittee is currently considering the parameters and timing of a table-top exercise and I hope to announce the specifics in the near future.

Addressing the Challenges Ahead Head-On

Many challenges remain that demand thoughtful consideration and eventual execution in order to globally harmonize transition away from LIBOR.  Most recently, the focus has been on consideration of a pre-cessation trigger as a step towards greater market certainty.[13]  Another concern involves how non-EU jurisdictions, including the U.S., should respond if there is a determination under the European Benchmark Regulation that LIBOR, although still published, is non-representative of the underlying market.[14]

We can all rest assured that ISDA has taken the reins again and last week announced that it will re-consult on how to implement pre-cessation fallbacks.  The decision followed the release of new information by the FCA and ICE Benchmark Administration on the limited lifespan of non-representative LIBOR and the issuance of a consultation by LCH to proposals by LCH to build pre-cessation triggers into its rulebook.[15]  The new consultation is anticipated to be issued later this month and will ask whether the 2006 ISDA definitions should be amended to include fallbacks that would apply to all covered derivatives following the permanent cessation of an IBOR or a “non-representative” pre-cessation event—whichever were to come first.  A single protocol would be launched to allow participants to include both pre- and permanent cessation fallbacks within their legacy derivatives.

I am very pleased that ISDA is re-consulting on pre-cessation fallbacks.  Given the risks associated with a non-representative or Zombie LIBOR, it is not only critical to provide for a pre-cessation trigger, but it is important to have a single protocol in place well in advance of 2021.  I encourage market participants to focus on the benefits of pre-cessation triggers in terms of clarity, certainty, and avoidance of risk.  As my colleagues at the FCA have pointed out, including an additional pre-cessation trigger into standard swaps fallback language will ensure a level playing field and avoid the pricing mismatches between triggered and non-triggered contracts—which is what could occur were pre-cessation triggers be offered as an option.[16]  ISDA is providing this second opportunity to build consensus.  While we regulators are here to assist, an industry-led solution remains the preference.

Conclusion

As we continue full force in 2020, much work remains to be done in less than two short years.  The ARRC’s paced transition plan assumes significant transition to SOFR in 2020.  Operational readiness becomes crucial to ensure organizations have set a solid foundation internally to begin transition in earnest.  I remain committed to supporting this entire effort, working with market participants and my official sector colleagues to ensure the MRAC continues to play an additive role in addressing challenges in a thoughtful, measured way to ensure market continuity and stability.

I began these remarks with some thoughts on progress from the ultimate Renaissance man, Bucky Fuller. Bucky was a huge proponent of the world view known as Spaceship Earth which encourages everyone on earth to act harmoniously—like the crew of a ship—toward the greater good.[17]  It is a bit of a heavy concept for this hour of the morning, but it is the right idea as we think about how our collaboration, coordination, and communication have already brought us this far in the last few years in terms of progress.  To make that final pass, we just need to continue our efforts and make some hard decisions for the greater good of our markets.

Thank you.

[1] Andrew Bailey, Chief Executive, Financial Conduct Authority, Speech at Bloomberg London: The Future of LIBOR (July 27, 2017), https://www.fca.org.uk/news/speeches/the-future-of-libor.

[2] Edwin Schooling Latter, Director of Markets and Wholesale Policy, Financial Conduct Authority, Speech at the Risk.net LIBOR Summit, 2019 (Nov. 21, 2019), https://www.fca.org.uk/news/speeches/next-steps-transition-lib.

[3] Press Release Number 7752-18, CFTC, CFTC’s Market Risk Advisory Committee Announces Agenda for July 12 Public Meeting (July 10, 2018), https://www.cftc.gov/PressRoom/PressReleases/7752-18.

[4] Press Release Number 7819-18, CFTC, CFTC Commissioner Behnam Announces the Establishment of New Subcommittee of the Market Risk Advisory Committee and Seeks Nominations for Membership (Oct. 3, 2018), https://www.cftc.gov/PressRoom/PressReleases/7819-18.

[5] ARRC, Transition from LIBOR, https://www.newyorkfed.org/arrc/sofr-transition.

[6] Press Release Number 8096-19, CFTC, CFTC Provides Relief to Market Participants Transitioning Away from LIBOR (Dec 18, 2019), https://www.cftc.gov/PressRoom/PressReleases/8096-19.

[7] News Release Number 2019-152, Office of the Comptroller of the Currency, Agencies Extend Comment Period for Proposed Rule to Amend Swap Margin Rules (Dec. 20, 2019), https://occ.gov/news-issuances/news-releases/2019/nr-ia-2019-152.html.

[8] See FHFA, Libor Transition, https://www.fhfa.gov/SupervisionRegulation/LIBORTransition.

[9] See Letter from Richard Fox, Head of Markets Policy, The Financial Conduct Authority to Scott O’Malia and Katherine Darras, ISDA (Jan. 20, 2020), https://www.isda.org/a/E1LTE/FCA-letter-to-ISDA-on-Non-representative-LIBOR-January-2020.pdf.

[10]Press Release Number 8011-19, CFTC, Market Risk Advisory Committee Approves Plain English Disclosures at Public Meeting (Sep. 13, 2019), https://www.cftc.gov/PressRoom/PressReleases/8011-19.

[11] Information on all of the MRAC meetings, including press releases, archived webcasts, and presentation materials are available at https://www.cftc.gov/About/CFTCCommittees/MarketRiskAdvisoryCommittee/mrac_meetings.html.

[12] John Coughlan, Richard Haynes, Madison Lau, and Bruce Tuckman, Office of Chief Economist, CFTC, Legacy Swaps Under the CFTC’s Uncleared Margin and Clearing Rules (November 2019), https://www.cftc.gov/sites/default/files/2019-11/CFTC%20Legacy%20Swaps%20Analysis%202019.11.19.pdf.

[13] Letter from Co-Chairs of the Financial Stability Board’s Official Sector Steering Group to ISDA (Mar. 12, 2019), https://www.fsb.org/wp-content/uploads/P150319.pdf.

[14]Edwin Schooling Latter, Director of Markets and Wholesale Policy, Financial Conduct Authority, Next Steps in Transition from LIBOR, (Nov.11, 2019), https://www.fca.org.uk/news/speeches/next-steps-transition-libor.

[15] Press Release, ISDA, ISDA to Re-consult on Pre-cessation Fallbacks (Feb. 5, 2020), https://www.isda.org/2020/02/05/isda-to-re-consult-on-pre-cessation-fallbacks/.

[16] See Edwin Schooling Latter, supra note 2.

[17] Wikipedia, the Free Encyclopedia, Spaceship Earth, at https://en.wikipedia.org/wiki/Spaceship_Earth.

 

RELEASE Number

8115-20

https://www.cftc.gov/PressRoom/PressReleases/8115-20?utm_source=govdelivery

February 11, 2020

CFTC Charges Company and its Principal in $33 Million Fraudulent Digital Asset Scheme

Washington, D.C. — The Commodity Futures Trading Commission announced the filing of a civil enforcement action in the U.S. District Court for the Southern District of New York against defendants Q3 Holdings, LLC and Q3 I, LP and their principal, Michael Ackerman. The complaint charges the defendants with fraudulently soliciting over $33 million to purportedly trade digital assets and misappropriating a substantial portion of that total.

“This case underscores, once again, that the Commission will continue working with our regulatory partners to ensure the integrity of our markets, including those involving digital assets,” said CFTC Director of Enforcement James McDonald. “Rooting out misconduct is essential to furthering the responsible development of these innovative financial products.”

The complaint specifically alleges that from at least August 2017 through December 2019 defendants operated a fraudulent scheme in which they solicited funds to purportedly trade digital assets and then misappropriated those funds. The defendants engaged in numerous misrepresentations that included making claims of (i) earning customers .5% in daily trading profits and roughly 15% per month, (ii) using algorithms that generated winning trades 75% of the time, and (iii) utilizing security measures that made it impossible for any principal to transfer or withdraw customer funds.

In reality, the defendants sent only a small portion of the customers’ funds to digital asset trading accounts, did not earn the trading profits they claimed, and misappropriated funds. To conceal the fraud, the defendants provided customers with false accounting statements, newsletters containing false trading returns, and fictitious screenshots reflecting the amount of money under Q3’s management.

Related Criminal and Civil Actions

Today, in separate actions, the U.S. Attorney’s Office for the Southern District of New York announced the arrest of Ackerman on one count of wire fraud and the Securities and Exchange Commission announced the filing of a multi-count complaint against Ackerman and Q3 alleging securities fraud and misappropriation.

The Division of Enforcement acknowledges and thanks the staff of the U.S. Attorney’s Office for the Southern District of New York, Homeland Security Investigations’ El Dorado Task Force, the Federal Bureau of Investigation, and the Securities and Exchange Commission for their assistance.

The Division of Enforcement staff members responsible for this case are Dmitriy Vilenskiy, Luke Marsh, Jason Gizzarelli, and Paul Hayeck.

-CFTC-

 RELATED LINKS

Complaint: Michael Ackerman Q3 Holdings

 

PUBLIC STATEMENTS & REMARKS

Statement of DSIO Director Joshua B. Sterling on Supporting Innovation in Digital Asset Products, including Pooled Investment Vehicles

https://www.cftc.gov/PressRoom/SpeechesTestimony/sterlingstatement021020?utm_source=govdelivery

February 10, 2020

The Division of Swap Dealer and Intermediary Oversight (Division) recognizes that CFTC-registered firms are often at the forefront in product innovation.  This has been the case throughout the CFTC’s history, and it remains true today with the advent of myriad products in the digital asset space.

The Division actively supports the CFTC’s core objective of fostering responsible innovation and enhancing the regulatory experience of market participants, including for our registrants.  We work closely with our colleagues throughout the agency, including the LabCFTC team, to remain well-informed about product innovations and how they intersect with our rule sets for swap dealers, futures commission merchants, commodity pool operators (CPOs), and other registrant categories.  We welcome all opportunities to meet with registrants and other market participants to discuss their product ideas, so that we can serve as a ready guide on key issues and considerations, well-informed by our lengthy experience with innovators and pioneers in various product fields.

The Division can be particularly helpful to CPOs and other asset managers that are exploring whether and how best to offer pooled investment vehicles that trade futures, swaps, and other commodity interests that reference digital assets like Bitcoin and stablecoins.  Vehicles that will do so are considered commodity pools under the Commodity Exchange Act and CFTC regulations.[1]  As such, the operators of those vehicles are considered CPOs and must generally register with the CFTC and comply with certain disclosure, recordkeeping, and reporting requirements in the CFTC’s Part 4 regulations.[2]  Certain exemptions and exclusions from those requirements are available, in whole and in part, depending upon the composition of a given commodity pool’s portfolio, its investor base, and the manner in which the pool markets itself.[3]

A firm that is considering whether to launch a commodity pool should assess whether it needs to register as a CPO to do so and, if so, what requirements will apply with respect to that pool.  In addition, a CPO that is considering whether to launch a commodity pool that trades a mix of commodity interests and securities may have to consider whether that pool is also an “investment company” required to register as such with the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940 (1940 Act) absent an available exemption or exclusion.[4]  This type of determination is highly fact-specific, and it will inform a variety of considerations for how the CPO proceeds with an offering of the pool’s interests. Among those considerations is determining whether the commodity pool must submit its disclosure document for review and approval by the National Futures Association (NFA) before it can be used to solicit investments.

Commodity pools that have registered as investment companies under the 1940 Act do not have to submit their offering documents for review by NFA.  At the same time, registered CPOs that operate pools registered as investment companies remain subject the antifraud provision of the Commodity Exchange Act when they market and offer those pools to investors.[5]  No matter whether a commodity pool is also an investment company, the Commodity Exchange Act makes clear that the offer and sale of the pool’s interests will be subject to the federal securities laws.[6]

The CFTC’s regulations governing commodity pool disclosures contain many important provisions that focus on risks, return characteristics, and associated expenses that are unique to commodity interest trading strategies.  This is true regardless of the asset referenced by a futures contract, swap, or other commodity interest – including Bitcoin and other digital assets.  Disclosures subject to these requirements highlight several important points that may be material to commodity pool investors, including the following:

  • Strategy Disclosure.  A futures contract has no intrinsic worth and will expire after a set time. A futures contract does not pay current income or a dividend; nor does it provide any other basis of return.  For this reason, it may mischaracterize a pool’s investment strategy to state, without sufficient explanatory context, that the pool “invests” in futures contracts.
  • Risk Disclosure.  A futures contract transfers the risk of future price movements from one party to another.  For every gain in futures trading, there is an equal and offsetting loss.  Accordingly, whether a futures trade is profitable for one party depends on whether the price paid, value received, or cost of delivery under the related futures contract is favorable to that party.  This is true regardless of the underlying asset, whether tangible or intangible in nature.  It is important for a fund that trades futures or other commodity interests to describe carefully, in connection with the presentation of its strategy, precisely how those instruments present opportunities for gain or loss.
  • Expense Disclosure.  Commodity pool disclosure documents are also required to include line-item disclosures about fees and expenses associated with commodity interest trading.
  • Principal Disclosures.  Because trading futures and other commodity interests is highly specialized, a commodity pool must present background on the business and educational experience of key personnel who are considered “principals” of the pool’s CPO (or commodity trading advisor).[7]This information helps investors assess the qualification of the personnel involved to direct or oversee the implementation of the pool’s primary trading strategy.
  • Discussion of Commodity Brokers and Trading Counterparties.  Since commodity interest transactions tend to be highly leveraged, a commodity pool must disclose material information about its commodity brokers and trading counterparties.

These types of disclosures are subject to review by NFA, although not for commodity pools registered as investment companies under the 1940 Act.

The Division has long been, and remains, highly supportive of responsible innovation in our markets, especially when it is driven by our registrants.  The Division staff stands ready to assist innovators and pioneers with new products, including pooled investment vehicles that seek exposure to digital assets.  We want to do our part to help market participants ensure that these innovations can develop in a practical way that is consistent with the law.  This offer of assistance extends to products – like whether publicly- or privately-offered – that may not be subject to specific CFTC disclosure requirements and disclosure document review by NFA.

* * * * *

Should market participants have any questions concerning these matters, please contact Division Director Joshua B. Sterling (202.418.6056; jsterling@cftc.gov), Deputy Director Amanda Olear (202.418.5283; aolear@cftc.gov), or Christopher W. Cummings, Special Counsel (202.418.5445; ccummings@cftc.gov).

[1] See Section 1a(10) of the Commodity Exchange Act, 7 U.S.C. § 1a(10); 17 C.F.R. § 4.10(d)(1).

[2] See 17 C.F.R. §§ 4.21-4.26.

[3] See, e.g., 17 C.F.R. §§ 4.5, 4.7, 4.12, 4.13.

[4] CPOs considering investment company status questions regarding a commodity pool are encouraged to contact the staff of the SEC’s Division of Investment Management at IMOCC@sec.gov or 202.551.6825.

[5] See Section 4o of the Commodity Exchange Act, 7 U.S.C. § 6o; see also 17 C.F.R. § 4.16 (prohibited representations).

[6] Section 4m(2) of the Commodity Exchange Act, 7 U.S.C. § 6m(2); see also 17 C.F.R. § 4.12(c)(3)(i)(B) (permitting, for CPOs of pools registered as investment companies, substituted compliance for specific Part 4 disclosure requirements with specific requirements applicable under the federal securities laws).

[7] See 17 C.F.R. § 3.1(a) (defining “principal” for these and other purposes).

 

 

 

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  1. Спасибо за информацию!!!!!

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