Stephen M. Humenik

Stephen M. Humenik

Stephen Humenik leads the firm’s futures and derivatives practice.  He has extensive experience on regulatory and enforcement matters involving the U.S. Commodity Futures Trading Commission (CFTC) and the derivatives and commodities markets.  Specifically, Mr. Humenik advises clients on regulatory and policy matters relating to the registration and compliance obligations of the Dodd-Frank Act and represents clients in CFTC enforcement investigations and proceedings.

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The Long Wait Is Not Over, but the SEC Advances its Security-Based Swap Dealer Rules and Reopens the Comment Period for Capital and Margin Requirements for Security-Based Swap Dealers

For several years Swap Dealers registered with the Commodity Futures Trading Commission (“CFTC”) have been awaiting action by the Securities and Exchange Commission (“SEC”) related to security-based swap dealers.  While the wait is by no means over, on October 11, 2018 the SEC voted 4 to 1 to reopen the comment period for proposed rules … Continue Reading

CFTC Amends Requirements for Chief Compliance Officers

On August 21, 2018, the Commodity Futures Trading Commission (“CFTC”) adopted rule amendments that modify the requirements for Chief Compliance Officers (“CCO”) of swap dealers (“SD”), major swap participants (“MSP”) and futures commission merchants (“FCM”).  SDs and FCMs should review these rules in detail in order to assess the changes they will have to make … Continue Reading

The CFTC’s Active Week: Virtual Currencies in Focus

This past week has been an especially active one for the U.S. Commodity Futures Trading Commission (CFTC). On Monday, in a speech to the North American Securities Administrators Association (NASAA), CFTC Chairman Giancarlo announced a Memorandum of Understanding (MOU) to increase cooperation between state securities regulators and the CFTC — particularly with respect to prosecuting … Continue Reading

CFTC Enforcement and Regulatory Report: 2017 Activity and Outlook

The U.S. Commodity Futures Trading Commission (the “CFTC” or the “Commission”) has been very active since the beginning of this year, despite the change in Presidential Administration, the lack (until recently) of appointed Commissioners, and the turnover of leadership at both the Commission and Division level.  Notably, the Commission has announced over 20 enforcement actions, … Continue Reading

Trump Administration to nominate J. Christopher Giancarlo to serve as CFTC Chairman

On March 14, 2017, the White House announced that President Donald Trump intends to nominate J. Christopher Giancarlo, currently Acting Chairman of the Commodity Futures Trading Commission (“CFTC”), to serve as the CFTC’s permanent Chairman, subject to confirmation by the Senate. Acting Chairman Giancarlo joined the CFTC as a commissioner in 2014, and was named … Continue Reading

CFTC Issues No-Action Position on Variation Margin Rules that Provides Swap Dealers with a Grace Period for the Completion of Documentation and the Implementation of Operational Processes

On February 13, 2017, the staff of the Division of Swap Dealer and Intermediary Oversight (“DSIO”) of the CFTC issued CFTC Letter No. 17-11 (the “Letter”) providing a time-limited no-action position with respect to swap dealers (“SDs”) who fail to collect and/or post variation margin in connection with uncleared swaps. Acting Chair Christopher Giancarlo commented … Continue Reading

CME Adopts Rule Changes Regarding Offenses

CME has issued a Special Executive Report listing out amendments to Rule 432 (General Offenses) of the CME, CBOT, NYMEX, COMEX, and CME SEF rulebooks. These amendments are aimed at specifically prohibiting: attempted fraudulent or bad faith actions; the intentional or reckless use or attempted use of a manipulative device, scheme or artifice to defraud; … Continue Reading

CFTC Issues No-Action Relief for Swap Dealers who Comply with EU Uncleared Swap Requirements

On February 1, 2017, the Division of Swap Dealer and Intermediary Oversight (“DSIO”) of the Commodity Futures Trading Commission (“CFTC”) issued a no-action letter granting relief from compliance with certain provisions of the CFTC’s margin requirements for uncleared swaps.  This relief applies to swap dealers entering into swaps with counterparties subject to the non-centrally cleared … Continue Reading

CFTC Acting Chairman Giancarlo Appoints Amir Zaidi as Director of the Division of Market Oversight

On Friday January 27, CFTC Acting Chairman announced a series of staff changes at the CFTC, including the appointment of Amir Zaidi to lead the CFTC’s Division of Market Oversight (“DMO”). Mr. Zaidi has served in a number of roles at the Commission since he joined in 2010. Most recently, he was Legal Counsel and … Continue Reading

CFTC Extends Public Comment Period for the Supplemental Proposal for Regulation Automated Trading

The CFTC announced today that it will extend the comment period for the supplemental proposal for Regulation AT until May 1, 2017. This is in keeping with Acting Chairman Giancarlo’s remark during SEFCON VII earlier this month, when he pointed out that an extension was warranted “based on the complexity of the supplemental notice and … Continue Reading

CFTC Commissioner Giancarlo Forecasts Swap Market Reforms

On January 18, 2017, Commodity Futures Trading Commission (“CFTC”) Commissioner J. Christopher Giancarlo delivered a keynote address at SEFCON VII in which he gave an indication of the types of reforms in the swap markets he plans to implement as Acting Chair and, if nominated and confirmed, as permanent Chair.  His comments echoed a theme … Continue Reading

CFTC Proposes Capital Rules for Swap Dealers and Major Swap Participants

On December 2, 2016, the Commodity Futures Trading Commission (“CFTC”) proposed rules establishing capital requirements for swap dealers (“SDs”) and major swap participants (“MSPs”). The CFTC’s proposed capital rules would cover those swap dealers and major swap participants that are not subject to prudential regulation. Chairman Timothy Massad noted in his attached statement that the … Continue Reading

CME Implements Significant Penalty Increases for Futures and Swaps Trading Violations

Effective December 14, 2016, and subject to CFTC regulatory review periods, the Chicago Mercantile Exchange Inc., The Board of Trade of the City of Chicago, Inc., New York Mercantile Exchange, Inc., Commodity Exchange, Inc. and the Swap Execution Facility Division of Chicago Mercantile Exchange Inc. have adopted amendments to the rulebooks of their respective platforms. … Continue Reading

CFTC Commissioner Giancarlo Delivers Speech Urging Regulatory Reform

On December 9, 2016, Commodity Futures Trading Commission (“CFTC”) Commissioner J. Christopher Giancarlo delivered the keynote address at the International Swaps and Derivatives Association Trade Execution Legal Forum.  His address included a strong rebuke of the CFTC’s swaps trading regime, stating that the “time has come for the CFTC to revisit its flawed swaps trading … Continue Reading

Pre-trial Briefing: CFTC v. Wilson and the Requirement of Intent to Cause an Artificial Price in Attempted Manipulation Cases

The Commodity Futures Trading Commission is set to begin its trial of Donald R. Wilson and his proprietary trading firm, DRW Investments, LLC on December 1, 2016.  In advance of this trial, this alert provides the legal theory that will be tested during this trial and other observations related to the CFTC’s pursuit of attempted … Continue Reading

Ag. Committee Chairman Tells Massad and CFTC “Pens Down” on Pending Rules

As we have noted in a recent client alert, the transition to the Trump administration is likely to have a significant impact on the regulatory agenda of the Commodity Futures Trading Commission (“CFTC” or “Commission”). House Agriculture Committee Chairman K. Michael Conaway wants to ensure that the status quo is preserved until such time as … Continue Reading

Post-Election Outlook: Derivatives Regulatory Agenda

On November 8, 2016, American voters elected Republican Donald J. Trump as President.  In addition, Republicans maintained control of the House of Representatives and the Senate.  As the campaign rhetoric fades into the background over the coming weeks and months, the business of transitioning to a new administration will begin in earnest.  The results of … Continue Reading

CFTC Issues Order Postponing Swap Dealer De Minimis Threshold Drop

On October 13, 2016, the Commodity Futures Trading Commission (CFTC) issued an order postponing until December 31, 2018, the lowering of the swap dealer de minimis threshold to $3 billion.  The Dodd-Frank Act provided that, absent action by the CFTC, the swap dealer de minimis threshold — the gross notional amount of swap dealing activity … Continue Reading

CFTC Enforcement Outlook: Insider Trading

Insider trading is a familiar term to participants in the equities markets; however, this term now has application in the swaps, futures, and commodities markets regulated by the U.S. Commodity Futures Trading Commission. In a time of aggressive enforcement, financial market participants should be aware that insider trading is a high priority for the CFTC … Continue Reading