December 11, 2017

CFTC Staff Issues Interpretive Guidance Clarifying Commodity Trading Advisor Registration Requirements Resulting from the European Union’s MiFID II Research Compensation Provisions for Investment Managers

Washington, DC — The Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued interpretative guidance providing that a futures commission merchant (FCM), swap dealer (SD), or introducing broker (IB) that receives separate compensation for commodity trading advice is not required to register as a commodity trading advisor, provided that the offered advice is “solely incidental” to the conduct of the FCM’s or SD’s business, or “solely in connection with” the operation of the IB’s business.

The interpretation was requested as a result of the European Union’s Markets in Financial Instruments Directive II (MiFID II Directive), which will require certain investment managers to make separate payments for investment research services and execution services commencing January 3, 2018. The interpretation, however, also extends to separate payments for commodity trading advice received by FCMs, SDs, and IBs outside of the requirements of the MiFID II Directive.

Last Updated: December 11, 2017