September 16, 2019

September 16, 2019

Subscribe to Latest Legal News and Analysis

CFTC’s Division of Market Oversight Extends No-Action Relief from Position Aggregation Requirements

On August 1, 2019, the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) issued a letter extending prior no-action relief, which suspended the need for certain persons otherwise required to aggregate positions to proactively file formal written notice for position limits purposes. The prior relief, CFTC No Action Letter 17-37, was set to expire on August 12, 2019. The extension, which is CFTC No Action Letter 19-19, will continue to provide market participants with relief from certain other position aggregation requirements in CFTC Regulation 150.4, including:

  • Revising the definitional conditions for eligible entities, independent account controllers and commodity trading advisors; and
  • Limiting aggregation requirements for the “substantially identical trading strategies” rule to circumstances where positions in more than one account or pool are held in order to willingly attempt to circumvent applicable position limits.

The extension maintains the requirement that, upon request by the CFTC or a designated contract market (DCM), persons qualifying for the relief will have to file a formal written notice with the CFTC or DCM, as requested, within five business days.

Staff noted that the extension will provide the CFTC and DMO with additional time to consider long-term solutions that might require a notice and comment rulemaking in the future.

The CFTC’s No-Action Letter 19-19 is available here.

©2019 Katten Muchin Rosenman LLP

TRENDING LEGAL ANALYSIS


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.

...

312-902-5372
Associate

Leonard Licht is an associate in the Financial Services practice. He advises a broad range of financial market participants, including investment managers to private funds and investors in private funds. Prior to joining Katten, Lenny practiced as a corporate and securities attorney and has also worked in an analytical capacity with a family office.

While in law school, Lenny was a Heyman scholar and member of the Moot Court Honor Society.

212-940-6587
Carl E. Kennedy Financial Services Lawyer Katten Muchin Rosenman Law Firm
Partner

Carl Kennedy is a partner in Katten's Financial Services practice. He applies his extensive prior financial services and government experience to assisting financial institutions, clearing firms, asset managers, clearinghouses, exchanges, hedge funds and proprietary trading firms with a full range of regulatory, compliance, transactional and enforcement-related issues in the commodities and derivatives markets.

Carl's prior professional experience includes working as senior in-house legal counsel at a large investment bank and futures commission merchant, providing legal advice and...

212-940-8544