The U.S. Commodity Futures Trading Commission (CFTC) today announced that its Division of Swap Dealer and Intermediary Oversight (DSIO) has granted temporary no-action relief to futures commission merchants (FCMs), introducing brokers (IBs), swap dealers (SDs), retail foreign exchange dealers (RFEDs), floor brokers (FBs), and members of designated contract markets (DCMs) and swap execution facilities (SEFs) that are not registered with the CFTC in any capacity.
In a related press release, CFTC Chairman Heath P. Tarbert stated that, “These prudent, targeted, and temporary actions will help facilitate orderly trading and liquidity in our derivatives markets. The CFTC remains squarely focused on promoting their integrity, resilience, and vibrancy through sound regulation.”
This post summarizes this no-action relief.
In addition, we have prepared the attached Overview of COVID-19 Relief Provided by the CFTC to supplement the information presented in this post.
DSIO today published the following no-action letters that grant temporary, targeted no-action relief to several registrants and unregistered market participants:
- CFTC Letter 20-02, which applies to members of DCMs and SEFs that are not registered with the CFTC in any capacity;
- CFTC Letter 20-03, which applies to FCMs and IBs;
- CFTC Letter 20-04, which applies to FBs;
- CFTC Letter 20-05, which applies to RFEDs; and
- CFTC Letter 20-06, which applies to SDs.
In sum, these letters afford relief from the following requirements:
- Time-Stamping – Relief for all registrants and non-registered members of DCMs and SEFs until June 30, 2020, from time-stamping requirements when located in remote, socially-distanced locations;
- Recording of Oral Communications – Relief for FCMs, IBs, SDs, RFEDs and FBs until June 30, 2020, from requirements to record oral communications related to voice trading and other telephonic communications when located in remote, socially-distanced locations;
- Furnishing of Annual CCO Reports – Relief for 30-days for FCMs and SDs from the requirement to furnish annual Chief Compliance Officer Reports to the CFTC; and
- Location and IB Registration – Relief for FBs until June 30, 2020 from the requirements to (x) be located on the premises of a DCM and (y) register as IBs, in each case which might have otherwise been triggered in connection with trading activities undertaken at remote, socially distanced locations.
We have prepared the attached Overview of COVID-19 Relief Provided by the CFTC to supplement the information presented in this post.
It should be noted that DSIO specifically stated that, “Registrants relying on the no-action relief are expected to establish and maintain a supervisory system that is reasonably designed to supervise the activities of personnel while acting from an alternative or remote located during the COVID-19 pandemic.”
Each DSIO no-action letter is available here.
Finally, we note that the CFTC’s Division of Market Oversight (DMO) today published three separate no-action letters that afforded SEFs and DCMs with relief from certain regulatory obligations. We will soon publish a separate post that summarizes those three no-action letters.
Good day. Good regulatory relief, notwithstanding that we all wished that we never needed it. DR2