October 27, 2020

Volume X, Number 301

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October 27, 2020

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October 26, 2020

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CFTC Further Extends Certain No-Action Relief to Market Participants in Response to COVID-19

On September 11, the Commodity Futures Trading Commission (CFTC) announced that the Division of Swap Dealer and Intermediary Oversight (DSIO) and the Division of Market Oversight (DMO) had issued CFTC Letter No. 20-26, further extending certain elements of the temporary no-action relief issued in response to the COVID-19 pandemic that are set to expire on September 30. The extended relief expires on January 15, 2021.

DSIO and DMO initially granted temporary relief on March 17 to a broad spectrum of market participants to support orderly trading and liquidity as they implemented social distancing measures during the pandemic. Subject to the conditions stated in the no-action letter, the relief provided is as follows:

  • DSIO is extending targeted no-action relief for affected firms from CFTC regulations requiring registrants to record oral communications related to voice trading and other telephonic communications, as well as time-stamping requirements when located in remote, socially-distanced locations.
  • DMO is extending targeted no-action relief for swap execution facilities and designated contract markets from certain CFTC regulations regarding audit trails, recording of oral communications and related requirements as a result of the displacement of trading personnel from their normal business sites.

In a press release announcing the issuance of the no-action letter, the directors of DSIO and DMO stated that they understood that the current extension would provide registrants with “time to complete the final steps necessary to come into full compliance with CFTC regulations, such as those related to voice recordings and time-stamps” and emphasized that that the “bar for DSIO and DMO granting a third extension will be quite high.”

A copy of the CFTC’s release with a link to the CFTC Letter No. 20-26 is available here.

 

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 262
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About this Author

Kevin M. Foley, Finance Lawyer, Katten Llaw Firm
Partner

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.

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Adam Haft is an associate in the Financial Services practice.

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