CFTC Issues No-Action Letters

by Katten Muchin Rosenman LLP
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The Commodity Futures Trading Commission released a series of staff letters relating to various issues arising under rules implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act, including portfolio reconciliation, certain requirements for non-US persons and chief compliance officer (CCO) reports.

  •         No-Action Relief Regarding Terms that May Be Excluded from Portfolio Reconciliation

CFTC Regulation 23.502 requires swap dealers (SDs) and major swap participants (MSPs) to reconcile their swap portfolios with one another and provide non-SD or non-MSP counterparties with regular opportunities for portfolio reconciliation. The CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO) has issued a no-action letter that identifies 11 data fields that may be excluded from such portfolio reconciliation exercises.  

CFTC Letter No. 13-31 is available here.

  •         No-Action Relief Affecting Non-US Associated Persons  

The CFTC issued a letter relating to the fingerprinting requirement under CFTC Regulation 3.12. In CFTC Letter No. 13-29, the DSIO granted no-action relief to any CFTC registrant that does not submit fingerprint cards for its non-US associated persons. In order to obtain such relief, a registrant must submit, in lieu of a fingerprint card, a Form 8-R for each non-US associated person with a signed certification that a reasonable criminal history background check was conducted and no matters were revealed constituting a disqualification under Sections 8a(2) or 8a(3) of the Commodity Exchange Act.  

CFTC Letter No. 13-29 is available here.

  •         No-Action Relief Concerning Annual Reports of Chief Compliance Officers

The DSIO issued a no-action letter that provides time-limited relief for certain SDs with respect to the requirement that their CCOs prepare and submit annual reports to the CFTC by July 1, 2013. The no-action relief applies to SDs that: (1) are not registered with the Securities and Exchange Commission or regulated by a US prudential regulator; and (2) ended their fiscal years on March 31. The relief is limited only to the first annual report required to be furnished for the fiscal year ending on March 31. The no-action letter includes a limited list of subjects that any such SD must include in its annual report and limits the time period covered by the certification that a CCO must execute with respect to the annual report.

CFTC Letter No. 13-32 is available here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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