The Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission issued an interpretive letter regarding cleared swaps customer collateral requirements under Part 22 of the CFTC’s rules. The DCR interpretation addresses a number of issues with respect to which derivatives clearing organizations (DCOs) and clearing member futures commission merchants (FCMs) requested clarification, including: (1) limitations on the use of cleared swaps customer collateral; (2) the use of variation margin, in particular if a DCO elects to net variation margin across an FCM’s cleared swaps customers; (3) comingling of cleared swaps customer collateral; (4) the processes by which an FCM may report to a DCO its customers’ portfolio of rights and obligations; (5) the circumstances in which a DCO may accept cleared swaps customer collateral in excess of the DCO’s initial margin requirements; and (vi) the determination of the value of cleared swaps customer collateral in the event of an FCM default.

The DCR interpretive letter is available here.

©2012 Katten Muchin Rosenman LLP

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The Coast Guard is proposing to replace its interim rule with a new rule to regulate the operation of U.S. and foreign vessels carrying bulk dry cargo (e.g., limestone, iron ore, coal) on U.S. waters of the Great Lakes, and the operation of U.S. bulk dry cargo vessels anywhere on the Great Lakes. The new requirements address the discharge of bulk dry cargo residue (“DCR”). The proposed rule would continue to allow non-hazardous and non-toxic discharges of bulk DCR in limited areas of the Great Lakes. However, vessel owners and operators would need to minimize DCR discharges and document their methods for doing so in DCR management plans. Certain additional DCR discharges currently allowed would be restricted.

The potential for DCR discharges to encourage non-native species, the interaction of this regulation with EPA’s Vessel General Permit and the states’ coastal zone management plans as well as various other laws and treaties, and a variety of other topics are covered in the Federal Register Notice. Comments on the proposed rule can be submitted to the online docket on or before October 29, 2012.

© 2012 Varnum LLP

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