March 1, 2021

Volume XI, Number 60

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March 01, 2021

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February 26, 2021

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CFTC Staff Provides Limited Continuation of Certain No-Action Relief to Market Participants in Response to COVID-19

On January 19, the Commodity Futures Trading Commission’s Market Participants Division (MPD) and Division of Market Oversight (DMO) issued CFTC Staff Letter No. 21-04 and Letter No. 21-05 (the Staff Letters) to extend, for a limited time, parts of the temporary no-action relief granted in response to the COVID-19 pandemic, which expired on January 15.

CFTC Staff Letter No. 21-04 extends until March 31 the following relief initially granted on March 17, 2020:

  • Oral Communications Recordkeeping Relief. MPD is extending relief from CFTC regulations requiring recording of oral communications related to voice trading and other telephonic communications for introducing brokers (IBs) and floor brokers (FBs). In conjunction with MPD’s relief, DMO is providing designated contract markets (DCMs) relief from certain CFTC regulations related to audit trails and related requirements where non-compliance arises from the inability of IBs and FBs to record voice communications as a result of their displacement due to the COVID-19 pandemic from an DCM’s trading floor and/or other designated premises from which customer orders may be placed.

CFTC Staff Letter No. 21-05 extends until April 15 the following relief short initially granted on March 17, 2020:

  • Timestamping Relief for Registrants and Members of Swap Execution Facilities (SEFs) and Designated Contract Markets (DCMs). MPD is providing time-limited, targeted no-action relief for affected firms from time-stamping requirements when they are located in remote, socially distanced locations. This relief does not apply for customer orders that are able to be entered into a trade-matching engine immediately upon receipt.

  • Relief from Introducing Broker (IB) Registration and Location Requirements for Floor Brokers (FBs). MPD is providing continued relief from IB registration and location requirements for FBs that normally operate on an exchange’s trading floor and/or other designated premises from which customer orders may be placed.

  • Relief for DCMs. DMO is providing DCMs relief from certain CFTC regulations related to audit trails and related requirements as a result of the displacement of trading personnel from their normal business sites.

The press release announcing the Staff Letters notes that all registrants and registered entities that continue to rely on extended relief are strongly encouraged to take all necessary steps to comply with the related rule requirements ahead of the relief’s expiration.

See the CFTC press release, which contains links to the Staff Letters. See the CFTC’s comprehensive list of the temporary, targeted relief that the CFTC has granted in response to the COVID-19 pandemic.

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©2020 Katten Muchin Rosenman LLPNational Law Review, Volume XI, Number 22
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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
Elise Michael, Katten Law Firm, New York, Finance Law Attorney
Associate

Elise Michael represents clients in the financial services industry. Prior to joining Katten, Elise was at J.P. Morgan Chase, where she supported the Private Bank’s advisory and alternatives businesses.

While in law school, Elise was a corporate scholar in the Samuel & Ronnie Heyman Center on Corporate Governance and the managing editor of the Cardozo Arts & Entertainment Law Journal. She also served as an intern with the US Commodity Futures Trading Commission (CFTC).

212-940-6610
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