October 26, 2020

Volume X, Number 300

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October 26, 2020

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CFTC Grants Relief to Address Net Capital Treatment of PPP Monies and FINRA Annual Assessments

On April 22, the Commodity Futures Trading Commission (CFTC) published a no-action letter providing guidance for futures commission merchants (FCMs) and introducing brokers (IBs) in connection with calculating the FCM’s or IB’s net capital under CFTC Regulation 1.17. Pursuant to the no-action letter, the CFTC will not bring an enforcement action against an FCM or IB who, subject to certain requirements, adds back to the FCM’s or IB’s capital the portion of any monies received, but is not required to return, pursuant to the Paycheck Protection Program (PPP). Likewise, an FCM or IB that also is a “small firm” member of the Financial Industry Regulatory Authority (FINRA) will be permitted to add back to the FCM’s or IB’s capital any accrued and unpaid FINRA annual assessment fees that are permitted to be deferred in accordance with FINRA’s guidance.

The CFTC’s no-action letter is available here.

FINRA’s annual assessment guidance is available on its COVID-19 frequently asked questions webpage, available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 115
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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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312-902-5372
James M. Brady, Katten Muchin Law Firm, Finance Attorney
Associate

James Brady concentrates his practice in financial services matters.

While in law school, James was an editor of the Michigan Journal of International Law. He also served as a judicial intern to the Honorable Stephen J. Markman of the Michigan Supreme Court. http://www.kattenlaw.com/James-Brady

312-902-5362
Gregory Uffner, Financial Services Attorney, Katten Law Firm
Associate

Gregory Uffner is an associate in the Financial Services practice. 

While in law school, Gregory was an associate editor for the Moot Court Board, a member of the Fordham Urban Law Journal and served as managing editor for the Fordham Sports Law Forum.

212.940.6485
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