January 13, 2014

CFTC Issues Time-Limited No-Action Relief from Compliance with Certain Conditions Associated with the Receipt of Customer Funds by Futures Commission Merchants

Washington, DC — The U.S. Commodity Futures Trading Commission’s (Commission) Division of Swap Dealer and Intermediary Oversight (DSIO) issued a no-action letter that provides time-limited relief with respect to compliance with certain conditions associated with the receipt of customer funds by futures commission merchants (FCMs) pursuant to Commission Regulations 1.20, 22.2, and 30.7.

The no-action position is conditioned upon the FCM maintaining compliance with its obligation to hold sufficient funds in section 4d(a)(2) segregation accounts, Part 30 secured accounts, and cleared swaps accounts to meet the net liquidating equities of all of the FCM’s customers in each respective account origin at all times.

On November 14, 2013, the Commission adopted amendments to Commission Regulations 1.20, 22.2, and 30.7 (Customer Protection Final Rule). In the Customer Protection Final Rule, the Commission listed certain conditions under which an FCM can accept a single payment from a customer for deposit to the customer’s section 4d(a)(2) segregation account and, as applicable, Part 30 secured account and cleared swaps account. The relief provided in the letter states that DSIO will not recommend an enforcement action against an FCM that does not comply with certain conditions set forth in the Customer Protection Final Rule in respect of such single payments.

The no-action position expires on April 14, 2014.

Last Updated: January 13, 2014