I support extending the no-action relief originally granted in 2017 in Commodity Futures Trading Commission (CFTC or Commission) Letter No. 17-37 (CFTC Letter 17-37)[1] and subsequently extended in 2019 in CFTC Letter No. 19-19 (CFTC Letter 19-19, and collectively with CFTC Letter 17-37, the CFTC Letters).[2]  The CFTC Letters provide market participants with relief from certain position aggregation requirements in Commission Regulation 150.4.[3]  I appreciate that extending that relief will provide certainty to impacted market participants for an additional three years.  However, the certainty that market participants seek, and that the Commission owes them, should be provided by the Commission fixing unworkable rules rather than using no-action relief to “kick the can down the road” for another three years. 

Just recently, I highlighted the need for the Commission to address unworkable regulations applicable to swap execution facilities instead of issuing registration orders containing a multitude of bespoke conditions and expecting registrants to rely on indefinite no-action relief.[4]  Here again, we have a regulation that just does not work.  And we have known this regulation does not work since early 2017.  But rather than focusing our efforts on prioritizing amending the regulation, we are yet again inappropriately using no-action relief as a band-aid. 

No action letters are useful tools, allowing the CFTC to remain flexible.  For example, staff no action relief was critical at the beginning of the COVID-19 pandemic, keeping our markets functioning during extended work-from-home periods.[5]  But when a regulation needs to be fixed, notice and comment rulemaking is the gold standard.  The notice and comment rulemaking process allows the CFTC to hear from stakeholders and consider regulatory solutions.  And the resulting regulations provide certainty, unlike no-action relief. 

I applaud the staff in the CFTC’s Division of Market Oversight for their coordination and cooperation with stakeholders and their attempts to facilitate compliance with CFTC regulations.  However, where compliance is impossible, it is the Commission’s responsibility to engage in notice and comment rulemaking, rather than perpetual no-action relief, to fix rules that do not work.  With a full slate of Commissioners, there is no reason or excuse to leave these regulations on the books and skirt our responsibility to act.