CFTC Staff Issues No-Action Letters

by Katten Muchin Rosenman LLP

The Commodity Futures Trading Commission staff recently released a series of letters relating to a variety of regulatory issues, including registration relief for certain entities and recordkeeping requirements for certain swap dealers (SDs) and major swap participants (MSPs).

  • IB and CTA Registration. In CFTC Letter No. 13-04, the Division of Swap Dealer and Intermediary Oversight (DSIO) granted no-action relief from registration as an introducing broker (IB) or a commodity trading advisor (CTA) to certain affiliates of a swap counterparty and the affiliates’ employees. The letter makes available registration relief to certain persons who would not otherwise be eligible for the relief DSIO previously provided to Agent Affiliates under CFTC Letter No. 12-70. The relief is subject to a number of conditions, including that the swap counterparty be registered as an SD within a specific period of time and conditions similar to those specified in CFTC Letter No. 12-70. CFTC Letter No. 13-04 is available here. CFTC Letter No. 12-70 is available here.
  • CPO Registration. Pursuant to CFTC Letter No. 13-07, DSIO extended the relief granted to commodity pool operators (CPOs) of securitization vehicles under CFTC Letter No. 12-45 until June 30, 2013. In order to remain eligible for the no-action relief, the CPO of a securitization vehicle must satisfy numerous criteria, including having initiated its registration as a CPO by filing Forms 7-R and 8-R and any required fees by March 31 and filing an email notice with DSIO. CFTC Letter No. 13-07 is available here. CFTC Letter No. 12-45 is available here.
  • SD and MSP Recordkeeping. Pursuant to CFTC Letter No. 13-06, DSIO issued no-action relief that will delay the compliance date for certain SD and MSP recordkeeping obligations until June 30, 2013 for all SDs and MSPs. The records covered by the no-action letter include: (i) records of oral communications related to pre-execution swap trade information and communications that lead to the conclusion of a related cash or forward transaction that occurs in a jurisdiction other than the United States, United Kingdom, Singapore, Hong Kong, Japan, Australia, Switzerland or Canada; (ii) the requirement to maintain transaction and daily trading records in a manner that is identifiable and searchable by transaction and counterparty, provided that the firm maintains records using existing search capabilities; (iii) the requirement to use a Coordinated Universal Time (UTC) timestamp, provided that data recorded in local time can be readily converted to UTC and that the firm commits to using UTC time in new or upgraded systems; and (iv) the requirement to maintain records at the principal place of business or principal offices, provided that the records are available at such location within 72 hours. CFTC Letter No. 13-06 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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