CFTC Staff Letters

Extension of No-Action Relief: Transaction-Level Requirements for Non-U.S. Swap Dealers

Time-limited no-action relief from compliance with the quarterly risk reporting requirement under Regulation 23.600(c)(2) for any fiscal quarters ending on or before July 31, 2014.

Time-Limited No-Action Relief for Members of Designated Contract Markets and Swap Execution Facilities that Are Not Registered with the Commission from the Requirement to Record Written Communications, Pursuant to Commission Regulation 1.35(a), in Connection with the Execution of a Transaction in a Commodity Interest and Related Cash or Forward Transactions

The Division of Swap Dealer and Intermediary Oversight granted no-action relief from the requirement to register as a commodity pool operator to a Delegating CPO that requested the relief in accordance with the streamlined approach described in CFTC Staff Letter No. 14-69.

Extension of conditional time-limited no-action relief for Yieldbroker Pty Limited with regard to Section 5h(a)(1) of the Commodity Exchange Act and Commission Regulation 37.3(a)(1).

Update: This letter has been replaced by letter 14-126.

Time-limited no-action relief for OTC Clearing Hong Kong Limited with regard to Sections 5b(a) and 2(h)(1)(A) of the Commodity Exchange Act and implementing regulations thereunder.

An insurance company requested no-action relief from the Division, in order to allow the company to provide reinsurance of pension plans’ longevity risks through multi-step “Interposed Longevity Reinsurance Transactions,” without such reinsurance being considered as insurance or a guarantee of a swap. Based on the company’s specific fact pattern, the Division found that the use of derivatives in the Interposed Longevity Reinsurance Transaction serves merely as a conduit for longevity risk coverage and payments made pursuant to a bona fide reinsurance transaction. Therefore, the Division agreed not to recommend that the Commission take an enforcement action against the insurance company on the basis that, under this specific fact pattern, the reinsurance of longevity risk is or should be characterized as a swap, as insurance of a swap or a guarantee of a swap, or that the insurance company is a provider of, a party to, guarantor of, or insurer of, a swap.

The Division of Swap Dealer and Intermediary Oversight granted exemptive relief pursuant to Commission regulations 4.12(a) and 140.93 to a commodity pool operator of three commodity pools that are organized as a three-level master-feeder structure that each operate pursuant to an exemption under Commission regulation 4.7 and began accepting subscriptions in December 2013 from the requirement to have an independent public accountant audit the financial statements in each commodity pool’s annual report for fiscal year 2013 pursuant to Commission regulation 4.22(d).

The Division of Swap Dealer and Intermediary Oversight granted exemptive relief pursuant to Commission regulations 4.12(a) and 140.93 to a commodity pool operator (the “CPO”) of a commodity pool operating pursuant to an exemption under Commission regulation 4.7 that has only two participants, both of which have discretionary investment authority over a portion of the commodity pool’s portfolio according to a plan establishing by the CPO’s control affiliate’s Chief Investment Officer and one of which is also a part owner of the CPO and its control affiliate, from the requirement to have an independent public accountant audit the financial statements in the commodity pool’s annual report for fiscal year 2013 pursuant to Commission regulation 4.22(d).