CFTC Staff Letters

The Division of Clearing and Risk (“DCR”) recently received several inquiries regarding the implementation of amendments to Regulation 39.13(g)(8)(ii) that the Commission adopted on January 27, 2020 with a compliance date of January 27, 2021. In particular, some market participants asked whether it would be permissible under Regulation 39.13(g)(8)(ii) as revised for a futures commission merchant (FCM) to assess whether a customer account presents a “heightened risk profile,” and is therefore subject to additional initial margin requirements, based on whether the account is a hedging or speculative account if the FCM concludes that is an appropriate method of assessing risk. DCR is confirming that it would be permissible for an FCM to do so, provided that the FCM maintains policies and procedures that demonstrate this is the risk analysis the FCM will use when determining whether to collect additional initial margin from a given customer.

Exemptive relief to registered Introducing Broker for filing a certified financial report under Regulation 1.10 and Regulation 1.16.

No-action relief granted from CPO and CTA registration to an entity that uses swaps in connection with its acquisition of biopharmaceutical royalties.

Partial continuation of no-action positions to facilitate physical separation of registrant personnel in response to the COVID-19 pandemic

No-action positions for floor brokers and introducing brokers from oral recordkeeping requirements and designated contract markets from audit trail requirements in continued response to the COVID-19 pandemic

Approval letter issued to the National Futures Association with regard to Swap Dealer captial model requirements and review program.

Time-Limited No-Action relief to FCMs from Regulation 1.25 for Investments in Securities with an Adjustable Rate of Interest Benchmarked to the Secured Overnight Financing Rate

Temporary no-action relief for registered derivatives clearing organizations from the amended daily reporting requirements in CFTC Regulation 39.19. This relief expires on January 27, 2022.

Extension of time-limited no-action relief for Shanghai Clearing House with regard to Section 5b(a) of the Commodity Exchange Act and Commission Regulations thereunder.

No-action letter extending relief from section 2(h)(8) of the Commodity Exchange Act for any eligible affiliate counterparty that executes a swap transaction with another eligible affiliate counterparty