April 7, 2014

CFTC Staff Issues an Extension of Time-Limited No-Action Relief to Futures Commission Merchants (FCMs)

Washington, DC – The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued an extension of time-limited no-action relief to FCMs. The extension of no-action relief will expire on June 30, 2014.

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.

In extending the initial relief (in CFTC Letter No. 14-02), DSIO states that it will not recommend that the CFTC take 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 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.

Last Updated: April 7, 2014