Global Markets Advisory Committee

Meeting of the CFTC’s Global Markets Advisory Committee
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581

October 9, 2014 – 1:30 p.m. to 5:00 p.m.

1:30 p.m.

Open Meeting

  • Ted Serafini, GMAC Designated Federal Official

1:30 p.m. to 1:45 p.m.

Opening Remarks

  • Commissioner Mark Wetjen, GMAC Sponsor
  • Chairman Tim Massad
  • Commissioner Sharon Bowen
  • Commissioner Chris Giancarlo

1:45 p.m. to 3:30 p.m.

Panel I: CFTC Clearing for Non-Deliverable Forwards (NDF)

The first panel will discuss whether mandatory clearing should be required of NDF swaps contracts. Each panelist will present and then there will be opportunity for broader discussion and questions. Representatives from the CFTC, the Bank of England, and the European Securities and Markets Authority will also be joined by a subcommittee of experts on the foreign exchange markets who, although not presenting at the meeting, will participate in the broader discussion following the presentations.

Panelists:

  • Brian O’Keefe, Deputy Director, Division of Clearing and Risk, U.S. Commodity Futures Trading Commission
  • David Bailey, Director, Financial Market Infrastructure, Bank of England
  • Rodrigo Buenaventura, European Securities and Markets Authority
  • GMAC Subcommittee on Foreign Exchange Markets

  • Key Issues

  • Is the NDF class set forth herein sufficiently defined? Should the proposed class include additional positive specifications or any negative specifications? Are there other terms that market participants often include in NDFs?
  • Should the Commission limit its determination to the most liquid NDF currency pairs, i.e. Brazilian Real / USD, Chinese Yuan / USD, Indian Rupee/ USD, Korean Won/USD, Russian Ruble / USD, and Taiwan Dollar / USD, and exclude the other six proposed currency pairs?
  • What types of packaged transactions would involve an NDF that the Commission has proposed to be included in the clearing requirement?
  • Do market participants have specific concerns about the potential application of a trade execution requirement in light of the way NDFs are currently being executed?
  • Do market participants have specific concerns about the potential application of the Commission's reporting rules in light of the way NDFs are currently being executed?
  • Do market participants have specific concerns regarding the costs of clearing and/or the availability of connectivity to clearing?
  • Are there currently any specific issues that exist with regard to the reporting of NDF transactions under the Commission's reporting rules?
  • Are there other issues of which the Commission should be aware?

  • Open Discussion

3:30 p.m. to 3:45 p.m.

Break

3:45 p.m. to 4:45 p.m.

Panel II: Digital Currency Introduction – Bitcoin

The second panel will focus on the digital currency bitcoin. Each panelist will present and then there will be opportunity for broader discussion and questions. David Van Wagner and Thomas Leahy will discuss the CFTC’s process for self-certifying bitcoin derivatives contracts. Jerry Brito will provide a brief primer on bitcoin, and the legal and policy issues surrounding digital currency. Houman Shadab will discuss the key regulatory challenges to the development of bitcoin-based derivatives contracts. Tim Byun from BitPay will discuss the adoption of bitcoin and potential uses of bitcoin derivatives. Leonard Nuara will discuss the launch of TeraExchange’s bitcoin derivative contract.

Panelists:

  • David Van Wagner, Chief Counsel, Division of Market Oversight, U.S. Commodity Futures Trading Commission
  • Thomas Leahy, Associate Director, Division of Market Oversight, U.S. Commodity Futures Trading Commission
  • Jerry Brito, Executive Director, Coin Center
  • Houman Shadab, Professor of Law, New York Law School
  • Tim Byun, Chief Compliance Officer, BitPay
  • Leonard Nuara, President and Co-Founder, TeraExchange

  • Key Issues:

  • What is bitcoin?
  • Is there a need/demand for bitcoin derivatives, and if so why?
  • What are the key regulatory challenges to overseeing trading and clearing of bitcoin derivatives, and can they be overcome?
  • What are the international considerations in meeting those challenges?
  • What are the potential applications of the bitcoin protocol to the derivatives markets?

  • Open Discussion

4:45 p.m. to 5:00 p.m.

Closing Remarks

  • Commissioner Mark Wetjen, GMAC Sponsor

5:00 p.m.

Close Meeting

  • Ted Serafini, GMAC Designated Federal Official