Client Alert | December 24, 2025
From the Derivatives Practice Group: This week, Michael S. Selig was sworn in as the 16th Chairman of the CFTC.
Please note that there will be no newsletter next week as we pause for the holidays. Happy holidays to all!
New Developments
Michael Selig Sworn In as 16th CFTC Chairman. On December 22, Michael S. Selig was sworn in to serve as the 16th Chairman of the Commodity Futures Trading Commission. Chairman Selig was nominated by President Donald J. Trump to the post on October 27, 2025, and confirmed by the U.S. Senate on December 18, 2025. Chairman Selig most recently served as chief counsel of the Securities and Exchange Commission’s Crypto Task Force and senior advisor to SEC Chairman Paul S. Atkins. He also participated in the President’s Working Group on Digital Asset Markets and contributed to its report on “Strengthening American Leadership in Digital Financial Technology.” Chairman Selig earned his law degree from The George Washington University Law School and received his undergraduate degree from Florida State University. [NEW]
Acting Chairman Caroline D. Pham Departs CFTC. On December 22, CFTC Acting Chairman Caroline D. Pham announced her departure from public service. Her last day at the CFTC was December 22, 2025. [NEW]
Acting Chairman Pham Announced New Member of Global Markets Advisory Committee’s Digital Asset Markets Subcommittee. On December 22, CFTC Acting Chairman Pham announced Rob Hadick of Dragonfly Capital Partners joined the CFTC’s Global Markets Advisory Committee’s Digital Asset Markets Subcommittee. According to the CFTC, Hadick is a General Partner at Dragonfly Capital Partners, where he focuses on digital asset investment strategy, market structure innovation, and expanding global market opportunities across blockchain-based financial systems. [NEW]
Acting Chairman Pham Announced Pilot Program to “Unleash American Energy Dominance.” On December 19, CFTC Acting Chairman Pham announced that the Market Participants Division (MPD) established a pilot program designed to increase liquidity and hedging of risks in connection with Energy Commodity End User Swaps. Specifically, MPD staff issued a no-action letter that provides for a pilot program that will exclude certain Energy Commodity End User Swaps from the swap dealer de minimis calculation. Participants in the pilot program are required to submit monthly reports on energy commodity sub-category, aggregate notional value and number of counterparties for CFTC market oversight. [NEW]
CFTC Staff Issues No-Action Letter Regarding CPO Registration for Certain SEC-Registered Investment Advisers. On December 19, MPD announced it had issued a no-action letter in response to a request submitted by the Managed Funds Association on behalf of its members. The letter states MPD will not recommend the CFTC initiate an enforcement action against firms registered as investment advisers with the Securities and Exchange Commission that operate commodity pools privately offered solely to sophisticated investors known as qualified eligible persons for failing to register with the CFTC as a commodity pool operator, subject to certain conditions. [NEW]
CFTC Approves Final Rule to Revise Swap Dealer Business Conduct and Swap Documentation Requirements. On December 18, the CFTC announced it has approved a final rule that codifies existing staff no-action positions for certain of the CFTC’s business conduct and documentation requirements applicable to swap dealers and major swap participants. The final rule amendments further harmonize the CFTC’s rules with those of the Securities and Exchange Commission and the Municipal Securities Rulemaking Board.
CFTC Staff Seek Public Comment on Direct Clearing by Retail Participants. On December 18, the CFTC issued a Request for Comment to better inform the staff’s understanding of the issues related to derivatives clearing organizations that provide direct clearing services to retail traders. These clearing services may be provided either through a fully-collateralized clearing model that has direct access for retail participants, or a hybrid model that includes both fully-collateralized direct clearing to retail participants and intermediated clearing by futures commission merchants to retail customers.
Acting Chairman Pham Announced Implementation of U.S. Treasury Market Reforms. On December 12, CFTC Acting Chaiman Pham announced the CFTC had approved a proposed order to grant a limited exemption necessary for the Chicago Mercantile Exchange Inc. and the Fixed Income Clearing Corporation to make their existing cross-margining arrangement available to certain customers with appropriate safeguards.
CFTC Staff Issues No-Action Letters Regarding Event Contracts. On December 11, the CFTC’s Division of Market Oversight and Division of Clearing and Risk announced they have taken a no-action position regarding swap data reporting and recordkeeping regulations in response to requests from multiple registered entities, including designated contract markets and derivatives clearing organizations. According to the announcement, the Divisions will not recommend the CFTC initiate an enforcement action against certain registered entities or their participants for failure to comply with certain swap-related recordkeeping requirements and for failure to report to swap data repositories data associated with binary option transactions executed on or subject to the rules of the registered entities, subject to the terms of the no-action letters.
CFTC Staff Issues No-Action Position Relating to Designated Contract Market Procedures. On December 11, the CFTC’s Division of Market Oversight announced it has issued a no-action letter to Small Exchange Inc., a designated contract market, which addresses certain procedures related to dormancy. The no-action position is time-limited and subject to the terms and conditions in the Division’s no-action letter.
Acting Chairman Pham Announced Withdrawal of “Outdated” Digital Assets Guidance. On December 11, CFTC Acting Chairman Pham announced that the CFTC will withdraw “outdated” guidance related to actual delivery of “virtual currencies,” given the substantial developments in crypto asset markets. The CFTC said that the withdrawal of the guidance will enable the CFTC to continue its ongoing work to implement the recommendations in the President’s Working Group on Digital Asset Markets report.
CFTC Staff Issues No-Action Letter Regarding Part 43 and Part 45 Requirements. On December 11, the CFTC’s Division of Market Oversight took a no-action position in response to a request from the International Swaps and Derivatives Association regarding certain data requirements under Part 43 and Part 45 of the CFTC’s regulations to reduce unnecessary and excessive regulatory burden and associated costs.
Acting Chairman Pham Announced CEO Innovation Council Participants. On December 10, CFTC Acting Chairman Pham announced the first round of CEO Innovation Council participants, representing exchanges. The CFTC said that the CEO Innovation Council will engage in public discussion of market structure developments in derivatives markets and that further information on the CEO Innovation Council will be released once details are finalized.
Acting Chairman Pham Announced Regulatory Clarity for U.S. Access to Markets. On December 9, CFTC Acting Chairman Pham announced that the CFTC’s Market Participants Division, Division of Clearing and Risk, and Division of Market Oversight issued a no-action letter to harmonize three separate definitions of “U.S. person,” among other things, under the CFTC’s Dodd-Frank Act cross-border swap framework. According to the CFTC, the letter simplified and consolidated existing no-action positions that address almost 15 years of regulatory uncertainty and promotes harmonization with SEC regulations.
CFTC to Accelerate Publication of Backlogged COT Data. On December 9, the CFTC announced that it is accelerating the publication of Commitments of Traders reports that were interrupted during the lapse in federal appropriation. According to the CFTC, the revised timeline will eliminate the report backlog by December 29, 2025.
Acting Chairman Pham Announced Launch of Digital Assets Pilot Program for Tokenized Collateral in Derivatives Markets. On December 8, CFTC Chairman Pham announced the launch of a digital assets pilot program for certain digital assets, including BTC, ETH, and USDC, to be used as collateral in derivatives markets; guidance on tokenized collateral; and withdrawal of outdated requirements given the enactment of the GENIUS Act. The CFTC said that the announcement follows the tokenized collateral initiative Acting Chairman Pham launched in September as a part of the CFTC’s Crypto Sprint to implement recommendations in the President’s Working Group on Digital Asset Markets report.
New Developments Outside the U.S.
ESMA Selects EuroCTP to Become the First Consolidated Tape Provider for Shares and ETFs. On December 19, ESMA selected EuroCTP as the first Consolidated Tape Provider for shares and exchange-traded funds in the EU, in a step forward for the transparency of equity markets in the EU. ESMA has decided to select EuroCTP following an in-depth assessment of its offer against the criteria listed in the Markets in Financial Instruments Regulation. EuroCTP has met all the selection criteria and has demonstrated a solid approach towards ESMA’s overall expectations for the award criteria.
ESMA Reviews Impact of Guidelines on ESG or Sustainability Related Terms in Fund Names. On December 17, ESMA released research assessing the impact of its fund naming guidelines on ESG and sustainability-related terms. The study found that ESMA’s Guidelines have: (1) improved consistency in the use of ESG terms by increasing alignment of fund names and their actual investment strategies, and (2) enhanced investor protection by reducing greenwashing risks.
ESMA Maintains Recognition of Two UK Central Counterparties under EMIR. On December 16, ESMA confirmed it will maintain the recognition of LCH Limited and LME Clear Limited, two central counterparties established in the United Kingdom. This decision is taken under Article 25(5)(b) of the European Market Infrastructure Regulation (EMIR), that requires ESMA to assess if the conditions under which LCH Limited and LME Clear Limited were originally recognized continue to be met, considering recent regulatory, market, and business developments.
ESAs Publish Key Tips to Help Consumers Detect, Prevent, and Act on Online Frauds and Scams. On December 15, the three European Supervisory Authorities (ESAs) published two factsheets designed to help consumers protect themselves from crypto and other online frauds and scams and explain how fraudsters increasingly use artificial intelligence to deceive consumers. The factsheets provide practical tips to help consumers recognise and avoid different types of frauds and scams. Additionally, the factsheets advise consumers on steps to prevent fraud and scams, such as never sharing personal or banking information, always pausing to think before acting, and verifying the source of any messages received.
ESMA Finalizes Technical Standards on Derivatives Transparency and the OTC Derivatives Tape. On December 15, ESMA published the Final Report covering mandates under the MiFIR Review on derivatives trade transparency, package orders and the over-the-counter (OTC) derivatives consolidated tape input and output data. The proposed pre- and post-trade transparency requirements for exchange traded derivatives and OTC derivatives are designed to provide a high level of transparency whilst ensuring that liquidity providers are protected from undue risk.
ESMA Appoints Marie-Anne Barbat-Layani and Christopher P. Buttigieg as the New Members of its Management Board and Renews Armi Taipale’s Mandate. On December 11, ESMA appointed Marie-Anne Barbat-Layani of Autorité Des Marchés Financiers (France) and Christopher P. Buttigieg of Financial Services Authority (Malta), as the new members of its Management Board. The Board of Supervisors has reappointed Armi Taipale of Finanssivalvonta (Finland), for a second mandate.
ESMA Chair Verena Ross to Step Down at the End of Her Current Term. On December 10, ESMA announced that its Chair, Verena Ross, has decided to not renew her term as Chair for a second mandate. According to ESMA, she will continue her work as ESMA’s Chair until the end of her contract on October 31, 2026. ESMA said that it will now launch the process for selecting a new Chair.
ESMA Announces Supervisory Expectations for the Management Body in the Form of 12 High Level Principles. On December 10, ESMA published its Final Report on the Supervisory Expectations for the Management Body, outlining ESMA’s expectations for the management bodies of the entities under its supervision. ESMA said that the 12 high-level principles are directed at entities supervised by ESMA and those looking to obtain an ESMA license, and are designed to set out ESMA’s core expectations in the form of outcomes.
New Industry-Led Developments
ISDA Publishes Report on Interest Rate Derivatives Trading Activity Reported in EU, UK and US Markets. On December 16, ISDA published a report that analyzes interest rate derivatives (IRD) trading activity reported in Europe. The analysis is based on transactions publicly reported by 30 European approved publication arrangements (APAs) and trading venues (TVs). Key highlights for the third quarter of 2025 include: (1) European IRD traded notional reported by APAs and TVs in the EU and UK rose by 29.1% to $83.9 trillion in the third quarter of 2025 versus $65.0 trillion in the third quarter of 2024, and (2) Euro-denominated IRD traded notional fell by 5.9% to $33.1 trillion from $35.2 trillion, representing 39.5% of total European IRD traded notional.
ISDA Responds to ASIC Consultation on Derivatives Transaction Rules. On December 16, ISDA submitted a response to the Australian Securities and Investments Commission (ASIC) consultation on the remake of the ASIC Derivative Transaction Rules 2015, which are due to sunset on April 1, 2026. ASIC proposed to remake the rules in substantially the same form to continue the operation of Australia’s over-the-counter derivatives central clearing regime. Besides limited, minor and administrative amendments, ASIC proposed a policy update in the Draft ASIC Derivative Transaction Rules 2026 to extend exemptive relief to clearing derivatives transactions resulting from post-trade risk reduction exercises.
Global Standard-Setting Bodies Publish Assessment of Margin Requirements for Non-Centrally Cleared Derivatives. On December 12, the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) published a report that reviews the implementation of margin requirements for non-centrally cleared derivatives. IOSCO said the report concluded that the framework has been effectively implemented and finds no evidence of material issues. The BCBS-IOSCO Working Group on Margining Requirements recommended ongoing monitoring through supervisory information exchange and the sharing of experiences among member authorities.
The following Gibson Dunn attorneys assisted in preparing this update: Jeffrey Steiner, Adam Lapidus, Marc Aaron Takagaki, Hayden McGovern, Karin Thrasher, and Alice Wang*.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Derivatives practice group, or the following practice leaders and authors:
Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)
Michael D. Bopp, Washington, D.C. (202.955.8256, mbopp@gibsondunn.com)
Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)
Darius Mehraban, New York (212.351.2428, dmehraban@gibsondunn.com)
Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)
Adam Lapidus, New York (212.351.3869, alapidus@gibsondunn.com )
Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)
William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com )
David P. Burns, Washington, D.C. (202.887.3786, dburns@gibsondunn.com)
Marc Aaron Takagaki, New York (212.351.4028, mtakagaki@gibsondunn.com )
Hayden K. McGovern, Dallas (214.698.3142, hmcgovern@gibsondunn.com)
Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)
Alice Yiqian Wang, Washington, D.C. (202.777.9587, awang@gibsondunn.com)
*Alice Wang, a law clerk in the firm’s Washington, D.C. office, is not admitted to practice law.
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