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The CFTC and NFA Offer Further No-Action Relief to Market Participants in Response to the Unprecedented Conditions Posed by COVID-19

On March 31, 2020, the CFTC extended temporary no-action relief to foreign affiliates of certain futures commission merchants (FCMs) in further response to the COVID-19 pandemic.[1]  The relief temporarily allows foreign affiliates of FCMs to accept orders from US participants for execution on US contract markets in the event US personnel are unable to handle the order flow due to their absence from normal business sites.[2]  Separately, the NFA provided temporary no-action relief to Introducing Broker members from certain financial report filing requirements.[3]  Market participants should continue to communicate their concerns to regulators as regulations become increasingly more difficult to achieve due to the unprecedented working conditions posed by the pandemic.

CFTC – Temporary No-Action Relief for Foreign Affiliates of FCMs[4]

The Division of Swap Dealer and Intermediary Oversight (DSIO) will refrain from recommending enforcement actions against a Rule 30.5 foreign broker for failure to register with the Commission as an introducing broker and allow the foreign broker to accept US customer orders for execution on a US contract market in the event its affiliated FCM’s US personnel are unable to handle the order flow due to the COVID-19-related restrictions, provided that the following seven conditions are met:

  • The foreign broker is an affiliate of a registered FCM

  • The foreign broker is registered in a jurisdiction with a Rule 30.10 exemption

  • The foreign broker introduces on a fully-disclosed basis

  • The foreign broker does not solicit orders or handle US customer funds

  • The foreign broker creates and maintains all required records

  • The affiliated FCM files a required acknowledgement with the NFA

  • The foreign broker provides written notice to DSIO

DSIO granted no-action relief through September 30, 2020.

NFA Relief Temporary No-Action Relief for IB members[5]

On March 26, 2020, the NFA granted independent introducing broker members a 30-calendar day extension for filing certified financial reports for fiscal years ending in December 2019 through March 2020.  NFA also provided independent IB members a 10-business day extension for filing the semi-annual quarterly or monthly reports for reporting periods ending February through April 2020.

[1]             See our recent insights on the CFTC’s no-action relief for FCMs (Mar. 19, 2020) available at https://www.mintz.com/insights-center/viewpoints/2401/2020-03-19-cftc-and-nfa-offer-no-action-relief-market-participants.

[2]             CFTC Release No. 8142-20 (Mar. 31, 2020) available at https://www.cftc.gov/PressRoom/PressReleases/8142-20?utm_source=govdelivery.

[3]             NFA Notice to Members 1-20-16 (Mar. 26, 2020) available at https://www.nfa.futures.org/news/newsNotice.asp?ArticleID=5219.

[4]             CFTC Letter No. 20-12 (Mar. 31, 2020).

[5]             NFA Notice to Members 1-20-16 (Mar. 26, 2020).

©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume X, Number 94



About this Author

Therese M. Doherty Financial Services Attorney Mintz, Levin, Cohn, Ferris, Glovsky & Popeo

Therese is a tenacious litigator with a reputation for developing and implementing creative strategies that drive successful outcomes for her clients. She has consistently been rated one of the country’s top securities lawyers by The Legal 500 United States, which calls her an “excellent partner to clients,” and hails her “ferocity, intelligence and perseverance in litigation” as well as her “depth of industry knowledge.”

In addition to her reputation as an exceptionally successful litigator in federal and state jury and bench trials, Therese has...

Jason L. Burrell Associate Complex Commercial Litigation Financial Institution Litigation White Collar Defense & Government Investigations Securities Litigation Class Action Health Care Enforcement & Investigations

Jason practices in the firm’s litigation section, and has experience in complex commercial litigation, including representing financial institutions, closely-held corporations and publicly traded companies. Additionally, Jason has experience drafting discovery responses and conducting and managing confidential document review for production. Jason has also worked on matters relating to investor disputes, government investigations, and enforcement proceedings.

During law school, Jason served as editor-in-chief of the Northeastern University Law Review. Also, Jason was a...