The Federal Reserve

Federal Reserve Board removes regulatory hurdles for some smaller banking organizations

The Federal Reserve Board will no longer hold smaller, less complex financial institutions to Dodd-Frank enhanced prudential standards in compliance with the newly enacted Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).

The threshold for prudential standards was raised from $50 billion to $100 billion in total consolidated assets for bank holding companies under the EGRRCPA. As a result, certain regulations conflict with the new law and required the board to act.

This led to the board’s decision to enforce certain regulations and reporting requirements for firms with less than $100 billion in total consolidated assets, such as rules implementing enhanced prudential standards and the liquidity coverage ratio requirements.


The Office of the Comptroller of the Currency (OCC)

The OCC issued a statement on the 'Impact of the Economic Growth, Regulatory Relief, and Consumer Protection Act'

Federal banking agencies issued a statement regarding changes in company-run stress testing, resolution plans, the Volcker rule, high volatility commercial real estate exposures, examination cycles, municipal obligations as high-quality liquid assets, and other provisions.

These changes are a result of the enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). A pdf was released by the Federal Reserve Board, which details these changes. 

These banking agencies will continue to monitor and regulate the financial institutions that they are charged with to ensure the health and the stability of the banking system. More banking laws may be amended in the future because of EGRRCPA.


Other Regulatory Bodies

U.S. Commodity Futures Trading Commission

The CTFC issues report on Chicago Mercantile Exchange's agricultural block trades

The Commodity Futures Trading Commission (CFTC) issued a report analyzing the first three months of block trading in grains, oilseeds, and livestock markets on the Chicago Mercantile Exchange (CME).

Trading for agricultural futures and option products began on January 2018 and the CFTC studied how block trades are affecting liquidity from the central limit order book and price transparency.

Block trades are privately negotiated futures and options transactions.

The study found that these block trades occur in nearby months with future expirations happening within the next 90 days.

While occurring on specific dates and for certain contract months, these block trades occupy a very small portion of the agricultural markets. Moreover, market makers are offsetting much of the block volume.

The biggest take away from the study is all the reviewed block trades fell within the CME’s rule for “fair and reasonable” prices.