January 31, 2023

Volume XIII, Number 31


January 30, 2023

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CFTC Extends No-Action Relief to SEFs From Certain Audit Trail Requirements Related to Post-Execution Allocation Information

On November 13, the Commodity Futures Trading Commission’s Division of Market Oversight (DMO) issued CFTC Staff Letter No. 20-36, which extends no-action relief to swap execution facilities (SEFs) from the requirement to capture post-execution allocation information in their audit trail data.

The no-action relief provided by CFTC Staff Letter No. 20-36 is conditioned upon the SEF having a rule which requires that market participants provide post-execution allocation information to the SEF for particular trades, in the event that the SEF, at the request of the CFTC or otherwise, requests such information. Further, if in the course of a trade practice surveillance or market surveillance investigation into any trading activity involving post-execution allocations undertaken in response to a request of the CFTC or otherwise, the SEF must ascertain whether a post-execution allocation was made, and if so, the SEF must request, obtain, and review the post-execution allocation information as part of its investigation.

The relief provided by CFTC Staff Letter No. 20-36 will expire on the earlier of either (1) November 15, 2021 at 11:59 p.m. EST; or (2) the applicable effective or compliance date of a CFTC action (including a rulemaking or order) providing a permanent solution for SEF audit trail obligations related to post-execution allocation information.

CFTC Staff Letter No. 20-36 is available here.

©2023 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 325

About this Author

Kevin M. Foley, Finance Lawyer, Katten Llaw Firm

Kevin M. Foley has extensive experience in commodities law and advises a wide range of clients, both in the United States and abroad, on compliance with the Commodity Exchange Act and the rules of the Commodity Futures Trading Commission (CFTC) affecting traditional exchange-traded products, as well as the over-the-counter markets involving swaps and other derivative instruments. His clients include futures commission merchants, derivatives clearing organizations, designated contract markets, foreign boards of trade and an industry trade association.


Guy Dempsey Jr., Bank Regulations Legal Specialist, Katten Muchin

Guy C. Dempsey Jr. concentrates his practice on derivatives and structured products and on bank regulation. He advises clients on derivatives transactions of all types across all asset classes, as well as on the corporate governance, regulatory, collateral, compliance, insolvency and litigation issues associated with such products.

Much of Guy’s work involves helping bank and non-bank clients analyze the details and impact of the Dodd-Frank Act. He maintains deep knowledge of the banking laws and regulations relating to capital markets activities....

Stanley V. Polit, Katten Muchin, Financial Services lawyer, Corporate Regulatory Matters Attorney

Stanley Polit concentrates his practice in transactional, corporate and regulatory aspects of financial services matters. Stan is able to provide legal services to a wide variety of clients including proprietary trading firms, hedge funds, broker-dealers, registered investment advisers, commodity trading advisers, financial institutions and general corporate clients.

Prior to joining Katten, Stan served as a council member for a national crisis management firm, where he specialized in crisis communication and merged media strategies. He has...