CFTC Provides Temporary Relief Regarding Registration Deadlines for Certain CPOs and CTAs and the Treatment of Foreign Exchange Swaps and Deliverable Forwards


On October 11, 2012, the Division of Swap Dealer and Intermediary Oversight (the “Division”) of the Commodity Futures Trading Commission (“CFTC”) granted temporary no-action relief to commodity pool operators (“CPOs”) and commodity trading advisors (“CTAs”) who are required to register with the CFTC solely as a result of their swaps activities (each, a “Swap CPO/CTA”). The Division stated that they would not recommend that the CFTC seek enforcement action against a Swap CPO/CTA who is not registered with the CFTC by December 31, 2012, provided that such Swap CPO/CTA (i) has completed and filed with the NFA a registration application, including Forms 7-R and 8-R (along with fingerprint cards for each of its principals and associated persons), on or before December 31, 2012, and (ii) is subject to and makes a good faith effort to comply with the Commodity Exchange Act’s (“CEA”) regulations applicable to registered CPOs and CTAs after December 31, 2012, as if such Swap CPO/CTA was in fact registered (including, without limitation, complying with any applicable reporting requirements, the implementation of NFA/CFTC compliance policies and procedures, and conducting ethics training).

On October 12, 2012, the Division granted time-limited no-action relief to operators of collective investment vehicles that trade foreign exchange swaps and “deliverable” foreign exchange forwards.As discussed in our previous Alerts, which can be accessed and persons who provide advice concerning foreign exchange swaps and deliverable forwards, and who would have to register with the CFTC solely as a result of these respective activities. The no-action relief provides that the Division will not recommend that the CFTC seek enforcement action against CPOs and CTAs who would be required to apply for registration with the CFTC by December 31, 2012 solely as a result of their foreign exchange swap and deliverable forward activities, but do not apply for such registration, if the Secretary of the Treasury (the “Treasury”) issues a final determination to exempt foreign exchange swaps and deliverable forwards from the term “swap” that becomes effective before December 31, 2012.

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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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