U.S. Court of Appeals Rules in Favor of CFTC in Fraud Case Against Monex Deposit Company and its Principals

Washington, D.C. — The Commodity Futures Trading Commission today announced that the U.S. Court of Appeals for the Ninth Circuit affirmed a preliminary injunction in the CFTC’s anti-fraud enforcement action against Monex Deposit Company (Monex) and its affiliated companies and principals on July 20. The court’s ruling marks the second time the CFTC has prevailed in the Ninth Circuit in the Monex case.
At issue was the district court’s order prohibiting Monex from operating its “Atlas” program, effectively shutting down the defendants’ unregistered trading platform for leveraged retail precious metals transactions and enjoining an alleged nationwide fraud. Monex claimed that they were entitled to the benefit of an exception to the CFTC’s jurisdiction for transactions that result in “actual delivery” of the commodity to the purchaser. The Ninth Circuit affirmed the district court’s finding that Monex did not make “actual delivery” of any metals to its customers through the Atlas program. 
“We are pleased with the Ninth Circuit Court’s decision, which reaffirms important protections established by Congress for markets and individuals,” said Acting Chairman Rostin Behnam.
Acting General Counsel Rob Schwartz added, “The Ninth Circuit’s decision is clearly correct and bolsters our Division of Enforcement’s efforts to root out unlawful trading activity conducted by companies and individuals attempting to elude regulation under the Commodity Exchange Act (CEA).”
Case Background
The CFTC’s enforcement action, filed in 2017 and currently pending, charges the defendants with defrauding thousands of retail customers out of hundreds of millions of dollars, while executing thousands of illegal, off-exchange leveraged commodity transactions. [See CFTC Press Release No. 7609-17] 
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires that such trading be conducted on a regulated exchange, and that the offeror be registered with the CFTC in accordance with the CEA and CFTC regulations. In a previous appeal, the Ninth Circuit affirmed the CFTC’s authority to bring enforcement cases against alleged fraud and held that “actual delivery” of commodities in leveraged retail commodity transactions requires transfer of a meaningful degree of possession or control of the commodity to the retail customer. [See CFTC Press Release No. 7984-19] 
In its continuing litigation, the CFTC seeks disgorgement of ill-gotten gains, restitution for the benefit of defrauded customers, civil monetary penalties, permanent registration and trading bans, and a permanent injunction from future violations of federal commodities laws, as charged.
Legal Division staff members responsible for the appeal are Rob Schwartz, Anne Stukes, and Kyle Druding. The Division of Enforcement staff members responsible for this case are Joseph Konizeski, Carlin Metzger, Ansley Schrimpf, and Bryan Hsueh.
* * * * * *
CFTC’s Precious Metals Customer Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.
Customers 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, or contact the CFTC Whistleblower Office at whistleblower.gov. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.

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CFTC Market Risk Advisory Committee Adopts SOFR First Recommendation at Public Meeting

Washington, D.C. — The Commodity Futures Trading Commission’s Market Risk Advisory Committee (MRAC) today adopted a market best practice known as SOFR First for consideration by the full Commission. SOFR First is a phased initiative for switching trading conventions from LIBOR to the Secured Overnight Financing Rate (SOFR) for U.S. Dollar (USD) linear interest rate swaps, cross currency swaps, non-linear derivatives and exchange traded derivatives. Acting Chairman Rostin Behnam is the sponsor of the MRAC. 
SOFR First, developed by the MRAC’s Interest Rate Benchmark Reform Subcommittee (Subcommittee), is designed to help market participants decrease reliance on USD LIBOR in light of statements from the Financial Stability Board and the International Organization of Securities Commissions on LIBOR transition which reinforce U.S. banking regulator guidance that banks cease entering new contracts that reference USD LIBOR post December 31, 2021.
SOFR First has four phases with phase one, involving USD linear swaps, recommended to occur on July 26, 2021. Specifically, on July 26, 2021 and thereafter, interdealer brokers would replace trading of LIBOR linear swaps with trading of SOFR linear swaps. The SOFR First market best practice recommends keeping interdealer brokers’ screens for LIBOR linear swaps available for informational purposes, but not trading activity, until October 22, 2021. After this date, these screens should be turned off altogether. The remaining SOFR First phases involve cross currency swaps, non-linear derivatives and exchange traded derivatives.
SOFR First represents the Subcommittee’s third recommendation in connection with the transition of USD derivatives and related contracts away from LIBOR. This recommendation, along with earlier recommendations on plain English disclosures for new derivatives contracts referencing LIBOR and the CCP discounting transition tabletop exercise, will be submitted to the Commission for consideration. 
See MRAC SOFR First Recommendation here and under Related Links.

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Cinderford v Cheltenham RECAP: Williams at double as Miles catches eye

Andy Williams scored twice as Cheltenham Town defeated Cinderford Town 3-0 in their opening friendly of the summer.
But the name on most fans’ lips as they left the Causeway was Felix Miles.
The second year scholar netted the Robins’ third and put in an impressive display at the top of a midfield diamond for the first hour before Michael Duff changed his entire XI.
Trialist Will Holland was among those to go on in the second half.
The Cheltenham-born former Swindon Town midfielder looked neat and tidy in midfield with Chris Clements, who is working his way back from a hamstring injury, and Liam Sercombe.
Clements has been training with Cheltenham and is also set to play at Evesham United on Tuesday night as he regains fitness, having been released by the club at the end of last season.
Summer signing Owen Evans played the first hour in goal and was largely untroubled, but Cinderford defended well, making Cheltenham work hard for clear-cut chances.
The other close season addition, midfielder Elliot Bonds from Hull City, missed out as he continues to regain fitness after a major knee injury, while defender Charlie Raglan and midfielder Ellis Chapman also missed out with injuries.

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Cheltenham Town: O Evans (S Flinders 60); J Hunt (S Long 60), G Horton (B Tozer 60), W Boyle (G Clark 60), L Freestone (C Hussey 60); M Blair (W Armitage 60), C Thomas (C Clements 60), J Aldridge (T Holland 60), F Miles (L Sercombe); A Williams (C Ebanks 60), G Lloyd (A May 60).
Referee: A Shepherd.

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Federal Court Permanently Bans and Imposes an over $300,000 Penalty Against Foreign Trading Platform for Offering Illegal Leveraged Transactions in Ether, Litecoin, Bitcoin and Precious Metals

Washington, D.C. — The Commodity Futures Trading Commission today announced that Judge David Hittner of the U.S. District Court for the Southern District of Texas entered a default judgment against Laino Group Limited d/b/a PaxForex (PaxForex) of St. Vincent and the Grenadines. The order imposes permanent trading, solicitation, and registration bans against PaxForex entering into transactions involving commodity interests and prohibits it from violating provisions of the Commodity Exchange Act (CEA), as charged. The order also requires the defendant to pay a civil monetary penalty of $374,864.
Case Background
The order, entered on June 30, 2021, stems from a CFTC complaint filed on September 24, 2020, that charged PaxForex with engaging in illegal, off-exchange transactions in Ether, Litecoin and Bitcoin, in addition to precious metals and foreign currency, with retail customers on a leveraged, margined, or financed basis and acting as a futures commission merchant (FCM) without CFTC registration as required. [See CFTC Press Release No. 8256-20] 
The order finds that from at least March 2018 through the present, PaxForex offered or engaged in unlawful retail commodity transactions in Ether, Litecoin, Bitcoin, gold, and silver. The defendant violated the CEA by failing to conduct these transactions subject to the rules of a board of trade that had been designated or registered with the CFTC as a contract market.
The order further finds that PaxForex, through its employees and agents, acted as an FCM by soliciting or accepting orders for retail commodity and foreign currency transactions and acting as a counterparty for these transactions; and in connection with these activities, it accepted money, securities, or property (or extended credit in lieu thereof) in the form of Bitcoin and other assets to margin trades or contracts that resulted or may have resulted.
The CFTC strongly urges the public to verify a company’s registration with the CFTC before committing funds. A customer should be wary of providing funds to an unregistered entity. A company’s or individual’s registration status can be found using NFA BASIC.
The CFTC thanks the U.S. Attorney’s Office for the Southern District of Texas and the Federal Bureau of Investigation for their assistance in this matter.
Division of Enforcement staff members responsible for this action are Harry E. Wedewer, Chris Giglio, Candice Aloisi, Mary Lutz, Lenel Hickson, Jr., and Manal M. Sultan. Office of Information Technology staff members Devon Malinowski and Salma Mack also provided assistance in this matter.

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The Market Risk Advisory Committee Announces Agenda for July 13 Public Meeting

Washington, D.C. — The Market Risk Advisory Committee (MRAC) today released the agenda for its upcoming public meeting that will be held on July 13, 2021, at 9:30 a.m. EDT via teleconference in accordance with the agency’s implementation of social distancing due to the coronavirus (COVID-19) pandemic. Acting Chairman Rostin Behnam is the sponsor of the MRAC.
At the meeting, the MRAC will receive final reports on Capital and Skin-in-the-Game and Stress Testing and Liquidity from its CCP Risk and Governance Subcommittee. In addition, the MRAC will receive a status report from the Interest Rate Benchmark Reform Subcommittee and vote on its recommendation for a market best practice that prioritizes derivatives trading in the Secured Overnight Financing Rate (SOFR) for particular market segments, otherwise known as SOFR First. [See CFTC Press Release No. 8394-21]
See the detailed agenda here.
“I commend the Subcommittees on CCP Risk and Governance and Interest Rate Benchmark Reform for their hard work, particularly during challenging times, to bring forth policy recommendations to the MRAC,” said Acting Chairman Behnam. “While the papers from the CCP Risk and Governance Subcommittee provide a glimpse into the areas of discussion that occurred over the past year and half, I recognize there is still much more to do and am committed to continuing a dialogue on these issues. I thank Alicia Crighton and Lee Betsill, the CCP Risk and Governance Subcommittee Chairs, for their leadership, and the Subcommittee for its time and effort as well as steadfast commitment to completing this task. SOFR First, the most recent recommendation of the Interest Rate Benchmark Reform Subcommittee, is a forward-thinking approach to increasing overall SOFR derivatives trading in order to facilitate a smooth transition of exposures from LIBOR to SOFR. As we approach December 31, 2021, it is imperative that banks adhere to the U.S. banking regulators’ supervisory guidance regarding the cessation of new contracts that use USD LIBOR as a reference rate. The Subcommittee’s recommendation complements this guidance. Many thanks to the Subcommittee for this important contribution to the benchmark reform effort.”

What:

Market Risk Advisory Committee Meeting

Location:

Teleconference

Date:

Tuesday, July 13, 2021

Time:

9:30 a.m. – 12:00 p.m. EDT

Viewing/Listening Instructions: Members of the public may access a live feed via streaming or phone. The live feed will be streamed on cftc.gov Call-in participants should be prepared to provide their first name, last name, and affiliation, if applicable. Materials presented at the meeting, if any, will be made available on cftc.gov.

Domestic Toll-Free:

1-877-951-7311

International Numbers:

International Numbers

Conference Passcode:

2513365

Members of the public may submit public comments in connection with the meeting, identified by “Market Risk Advisory Committee,” by July 20, 2021. Statements may be submitted online. If you are unable to submit comments online, contact Ms. Lewis, via the contact information above, to discuss alternate means of submitting your comments. Statements submitted in connection with the committee meeting will be made available to the public, including publication on cftc.gov. The meeting agenda may change to accommodate other MRAC priorities. For agenda updates and more information about this advisory committee, including its members, visit MRAC.
There are five active Advisory Committees overseen by the CFTC. They were created to provide advice and recommendations to the Commission on a variety of regulatory and market issues that affect the integrity and competitiveness of U.S. markets. These committees facilitate communication between the Commission and market participants, other regulators, and academics. The views, opinions, and information expressed by the Advisory Committees are solely those of the respective Advisory Committee and do not necessarily reflect the views of the Commission, its staff, or the U.S. government.

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Cheltenham Town hails return to full capacity ahead of League One matches

Gloucestershire’s biggest football club will be back at full capacity next season as they take on some of the UK’s most-famous teams in League One.
Cheltenham Town are back in the league for the first time in 12 years and the guys want you there cheering them on every step of the way at the Jonny-Rocks Stadium.
Michael Duff will lead his league champions into battle against some of the game’s biggest and most famous clubs next season, this time with supporters by their side.
CTFC commercial assistant Luke Saunders said: “The easing of restrictions comes at a really good time for us.
“Next season is going to be one of the biggest for some time so we want our amazing fans back in the stadium cheering us on every step of the way.
“Town are back. Back in League One. Back together. We can’t wait to see you all again.”
Full capacity
Due to the ongoing disruption caused by Covid, the vast majority of fixtures in 2020–21 took place behind closed doors.
But from July 19, sports stadiums across England will finally be able to operate at full capacity after the next stage in the easing of coronavirus restrictions.
Luke explained: “Fans were understandably concerned last year that they wouldn’t get in to actually see the matches so were reluctant to hand money over for season tickets.
“It was incredibly frustrating for us because we were playing great football and could’ve easily attracted a few hundred extra fans through the gate.”
Plenty of excitement

Cheltenham Town’s Alfie May and his team-mates celebrate after being promoted to League One (Image: David Davies/PA Wire)
Indeed, the Robins even reached the fourth round of the FA Cup for the first time since 2006 before narrowly losing out to eventual 2020–21 Premier League champions Manchester City.
Luke said: “We came within nine minutes of one of the biggest shocks in recent FA Cup history.
“It was obviously disappointing but we took a huge amount of confidence and pride from the fact we gave them a real run for their money.
“So next season is certain to hold one or two surprises too when we’ll be playing the likes of Sheffield Wednesday, Ipswich Town, and Sunderland.
“These are all big teams so there’ll certainly be plenty of excitement.”
Come on, you Robins!
Cheltenham Town are keen to tempt fans, old and new, back to the Jonny-Rocks Stadium over the coming months.
Luke said: “Our average gate is 3,500 so we figure there must be a lot more fans out there in the region who would love to see us in action.
“So we want to remind people they can have a good time here. Even with all the difficulties, you can come to a match, soak up the atmosphere, and watch some thrilling League One football.
It’s an exciting group with an exciting team so let’s attack the season. Come on, you Robins!”
Season tickets
The only way to ensure you’ll be able to watch all of the matches in the club’s return to League One is to buy your season ticket this summer.
Prices start at £333 for adults, £240 for seniors, £240 for students (23+), £100 for 16- to 22-year-olds, and £75 for U16s.
The Junior Robins package will be available again, meaning under-11s can watch matches for just £1 alongside their membership.
Click here to buy online or visit the ticket office between 10am and 5pm on a Tuesday, Thursday, or Friday.
Hospitality

The hospitality suite packages are designed to provide a truly memorable matchday experience (Image: Cheltenham Town FC)
The club boasts a selection of hospitality suite packages, designed to provide a truly memorable matchday experience.
The Robins have partnered with Lee Martin and his award-winning team to deliver fine food and beverages made with fresh local produce.
Hospitality prices are categorised as Silver, Silver Plus, Gold, or Platinum depending on the opposing team.
This year, there are three tiers of corporate hospitality executive lounges, as well as executive boxes and match-day sponsorship options.
Typecraft Suite
If you’re looking for a more informal match-day dining experience, like a day out with colleagues, friends or family, then the Typecraft Suite with its own private bar and one-course premium food offering is the ideal choice for you.
Steve Roberts Champions Lounge
Celebrate your matchday in style with first-class hospitality supplied by Lee Martin and his team and fabulous views from the top floor of the Autovillage Stand in the Steve Roberts Champions Lounge overlooking the pitch and Cleeve Hill.

Hospitality prices are categorised as Silver, Silver Plus, Gold, or Platinum (Image: Cheltenham Town FC)
Premier Suite
The new 2021/22 season Premier Suite is situated on the ground floor of the Autovillage Stand offering spectacular pitch-level views.
Executive Boxes
Want to make your hospitality experience even more special? Then why not hire one of the private boxes.
Ideal for celebrations such as birthdays, a box offers a pre-match meal, programme and team sheet, half-time refreshments, executive padded seating, dedicated CTFC host on hand throughout the day, Sky TV, and a fully-stocked mini-bar for an added charge.
Chef Lee Martin prepares stunning meals and can cater to individual requirements.
Match and match ball sponsorship
Matchday sponsorship is a great way to enjoy top-class hospitality while promoting your business in a number of ways and entertaining friends, family or clients.
Sponsors receive excellent coverage throughout the day ensuring your business reaches every supporter, as well as a two-course meal, two bottles of complimentary wine, free match programme, padded seat, personal host, and much more.
Find out more?

Town are back. For more information about fixtures, season tickets and hospitality suite packages, see the website.

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Georgia Man Sanctioned for Fraudulent Scheme Attempting to Profit from COVID-19

Washington, D.C. — The Commodity Futures Trading Commission announced today that the U.S. District Court for the Northern District of Texas entered a default judgment against Kenzley Ramos, a Georgia resident, for engaging in fraudulent solicitation, misappropriation, operation of an unlawful commodity pool, and failure to register with the CFTC.
The court’s order requires Ramos to pay $27,556 in restitution to the defrauded victims, and a civil monetary penalty of $82,668. The order also permanently enjoins Ramos from engaging in conduct that violates the Commodity Exchange Act and CFTC regulations, registering with the CFTC, and trading in any CFTC-regulated markets.
Case Background
The court’s order stems from a 2020 enforcement action that charged Ramos with fraudulent solicitation, misappropriation, operation of an unlawful commodity pool, and failure to register with the CFTC. [See CFTC Press Release No. 8258-20]. The order finds that from at least December 2015 until the present, Ramos fraudulently solicited individuals across the country by using online advertisements and various aliases to further his ongoing scheme. He falsely represented himself as a highly successful and experienced binary options and foreign currency (forex) trader who could profit off market changes related to COVID-19. Ramos offered to pool money investors sent him to trade binary options and forex; rather than trade, however, he  misappropriated the money. Contrary to his solicitations, Ramos had no binary options or forex trading accounts.
This order ends the CFTC’s litigation against Ramos.
The CFTC cautions victims that restitution orders may not result in the recovery of any money lost because wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure wrongdoers are held accountable.
Parallel Criminal Action and State Actions
The U.S. Attorney’s Office for the Northern District of Texas previously arrested Ramos on one count of commodities fraud. That case is pending. In addition, the Texas State Securities Board issued an emergency cease and desist order against Ramos on April 17, 2020, alleging securities fraud, misappropriation, and registration violations.
The Division of Enforcement acknowledges and thanks the U.S. Attorney’s Office for the Northern District of Texas and the Texas State Securities Board for their assistance in this matter.
The Division of Enforcement staff members responsible for this matter are Brett Shanks, J. Alison Auxter, Allison Sizemore, Jeff Le Riche, Christopher Reed, and Charles Marvine.
* * * * * * *
CFTC’s Forex Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Forex Trading Fraud Advisory, to help customers identify those scams.
The CFTC also strongly urges the public to verify a company’s or individual’s registration with the Commission before committing funds.  If unregistered, a customer should be wary of providing funds to that company or individual.  A company’s or individual’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.

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Styling fabulous fashion futures | News24

Mayco member for economic opportunities and asset management, James Vos, addresses the crowd at a fashion show held to showcase Philippi Village Project graduates’ talents.

Mayco member for economic opportunities and asset management James Vos congratulated the graduates of the Philippi Village Project (PVP) who showed off their new knowledge at a recent fashion show.
The skills development programme, facilitated by the Cape Town Fashion Council (CTFC), a clothing and textile sector special business partner funded by the City, was designed for learners from Philippi and surrounding areas who are current or aspiring garment-making business owners.

“The fashion industry is the most glamorous and underrated of industries, but equally important. Almost every individual is a direct consumer of fashion, frequenting retailers or flea markets. The industry generates job opportunities for qualified and unqualified, skilled or unskilled people,” says Vos.
The fashion show was held at the Philippi Village Business Hub in Cwangco Crescent on Friday 18 June.

During the course, the learners were taken through the technicalities of working on sewing machines.
“I feel greatly inspired by these young women who started this course in March. Many of them had never operated a sewing machine before, but thanks to the dedicated instructors at CTFC, and the learners own diligent work, they can now boast about their beautiful handiwork,” he says.
Besides the practical skills around garment-making, the group also learned about aspects of enterprise management such as costing products, client interactions, and drafting business plans. This empowers the graduates with the skills needed to maintain or grow their businesses.
It also comes at a crucial period as the local clothing and textile industry continues to recover from the Covid-19 pandemic.
The Western Cape has the highest concentration of clothing manufacturers in the country and in 2017, the clothing and textile industry contributed R4,4-billion to Cape Town’s export sector.
Simultaneously, South African footwear manufacturing grew at an average annual rate of 10% over the past five years, while leather and footwear exports from South Africa grew by 167% from R1,98 billion to R5,29 billion between 2010 and 2016.

PVP is one of several initiatives in the sector that the City is supporting.
Last month, it was announced that the mayoral committee approved funding for the SMME business accelerator project, which will see small enterprise manufacturers provided with training and upgrade support to unlock procurement from new retail customers and build new and long-term supply relationships. The SMMEs will then be matched with business opportunities at large retailers.
There is also the Cape skills and employment accelerator project launched in partnership with the National Skills Fund to create employment opportunities for marginalised youth and women.
Under the initiative, the City is contributing R55 million over three years towards training and work placement in companies in the clothing and textile and call centre sectors.

As the country and world emerge from the pandemic, the local industry is poised for renewed growth this year and beyond.
“Cape Town has a legacy for garment-making that is unmatched in its quality and so it gives me great pleasure that the City is providing a platform to not only keep that legacy alive but to bring fresh talent to the table. This will keep Cape Town at the forefront of design and creativity,” says Vos.

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ICYMI: Commissioner Quintenz in Bloomberg: Family Offices Don’t Need New Regulations

Excerpts from Commissioner Brian Quintenz’s Op-ed with the Securities and Exchange Commission’s Commissioner Hester Peirce on the Collapse of Archegos
Bill Hwang’s family office, Archegos Capital Management, failed in spectacular fashion in March as investments in complex derivative products — specifically, total return swaps on individual stocks — rapidly accumulated losses too large for the firm to cover. As a result of Archegos’s default on these positions, large investment banks that were counterparties to the trades were left holding the bag. Some banks suffered large losses as they unwound those positions.
Many policy makers and commentators have used the Archegos event to fault current systemic-risk safeguards and call for increased scrutiny for, or even direct regulation of, family offices. Yet the systemic impact on the financial system of the Archegos-fueled losses was zero. Indeed, even the most directly affected firms easily weathered the event. Morgan Stanley and Goldman Sachs Group Inc., for instance, still posted record quarterly earnings. Only Credit Suisse Group AG, which also suffered from the Greensill Capital implosion, was compelled to raise a small amount of equity, and it did so smoothly and quickly.
Beyond hyperbolizing the event’s systemic risk, these sentiments misunderstand the rationale underpinning the Commodity Futures Trading Commission and Securities and Exchange Commission’s investment firm regulatory regimes.
First, family offices are organizations set up and overseen by wealthy individuals to manage their own money. Generally only family members or key employees of the family office are allowed to co-invest, which means the fund’s investors are also insiders. Family offices, regardless of their size, generally are not required to register with either the SEC or the CFTC. The investment adviser registration and regulatory regimes focus on investor protection, with a specific emphasis on protecting outside investors through disclosures, fiduciary-duty obligations and reporting requirements. Such protections are unnecessary when the investors are all in the family.
Regardless, investment adviser regulatory regimes are not designed to prevent investors — particularly sophisticated investors — from the consequences of their poor investment decisions. Events like this one are useful reminders of the importance of risk management for Archegos and other market participants. Rather than looking to their regulators to tell them how to avoid such losses in the future, sophisticated market participants should take an introspective look at their own risk-management systems, firm cultures and incentive structures.
Second, calls for revamped family office regulation also ignore the prudential-like swap dealing and reporting rules mandated by the Dodd-Frank Act to address Archegos’s specific problem: a large and concentrated position spread out across the financial marketplace unknowable to anyone except financial regulators. These rules, a cornerstone of Dodd-Frank, were designed to provide regulators insight into the opaque over-the-counter swaps markets after the 2007-2009 financial crisis.
After Dodd-Frank, federal oversight of banks’ derivatives activities depends on the products being traded. The CFTC received jurisdiction over banks’ swaps activity that involves interest rates, broad credit or equity indices, foreign exchange, and commodities (which amount to around 95% of total notional traded swaps). In 2012, the CFTC adopted and implemented its swap dealer registration, capital, margining and reporting rules, pursuant to which the CFTC now receives real-time data on banks’ trading activities and their clients’ portfolio-level holdings in the cleared swaps market. The CFTC can aggregate, net and examine this information across financial markets.
Dodd-Frank gave the SEC jurisdiction over banks’ activities in single-stock swaps, such as those dealt to Archegos. But it was only in the last few years, under the chairmanship of Jay Clayton, that the SEC finalized its rules around security-based swaps reporting requirements, which will come into full effect later this year. If the SEC’s rules had been completed earlier, the trades and positions of various banks related to Archegos could have been aggregated and flagged.
Any large loss to banks from a single investment firm always provokes thoughtful debate around the adequacy of existing prudential and financial market regulations and the efficacy of market participants’ risk-management programs. Given the lack of systemic impact from the Archegos losses, the misalignment of family office structures with the rationale for investment firm regulation, and the swaps oversight regimes currently in place or being brought online by market regulators, absent additional information, the Archegos case does not justify new regulation for family offices.
Read the full op-ed here.

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Robins reassure shareholders: ambition and budget unaffected

Cheltenham Town have moved to reassure shareholders over the club’s future ambitions after news of chairman Andy Wilcox’s impending departure was revealed earlier this week.
A letter, seen by Gloucestershire Live, arrived to shareholders on Thursday afternoon, confirming they hope to reach an amicable solution with Wilcox, who has been on the board for the past four years, with the last three of them as chairman.
It confirmed that manager Michael Duff’s playing budget would not be affected by changes in the boardroom this summer.
The newly-promoted League One club also outlined its ownership structure.
It has more than 300 shareholders, but the vast majority of these are held by four individuals or companies: former club director Simon Keswick, CTFC Investments Ltd (which represents a Cheltenham Town supporter based in the Cayman Islands), former club chairman Paul Baker and the Robins Trust.
Those four together own just under 80 per cent of the club. The board of eight directors run the club on behalf of the owners and are in regular contact with them.
All current directors have been appointed because of the specific skills or experience they bring to the board (eg law, accountancy, running businesses or football administration) and because those skills are valuable to the club they are not necessarily expected to be significant shareholders as well.

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The only directors also among the top 10 shareholders in the club are the Robins Trust, who are represented by fan-elected director Dave Beesley, and Paul Godfrey.
The club also highlighted that less than 2.5 per cent of its income over the past two years has been provided by cash injections and it is therefore not reliant on its directors or owners for significant benefactor funding in recent seasons.
Cheltenham have emerged from the challenges of the past 18 months in a relatively strong financial position, helped by the sale of players and on-field successes such as last season’s FA Cup run to the fourth round, facing Manchester City in a lucrative televised tie.
The letter concluded with a rundown of Cheltenham’s many achievements over the past 25 years – acknowledging Wilcox’s role in their recent triumph – and a commitment to keep supporters and shareholders informed of further developments.

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