I support an extension of the staff no-action position in Letter No. 20-30 from certain reporting obligations under the Commodity Futures Trading Commission’s[1] Ownership and Control Reports (“OCR”) final rules.

However, I feel compelled to reiterate what I said last year when Commission staff extended this same relief:

“I urge staff and the Commission to develop and issue an OCR proposed rulemaking soon—so that staff is not compelled to issue yet another extension when this one expires a year from now.”[2]

Yet, here we are in exactly the situation I had hoped we would avoid—issuing another extension in a seemingly endless series of extensions instead of addressing a known issue head-on.  Commission staff has taken a no-action position with respect to certain reporting obligations under the OCR final rules since 2014.  But despite a petition to address this issue, we have spent the past decade repeatedly kicking the can down the road.[3]

Instead of using Commission resources and staff time to issue unnecessary rules codifying existing expectations[4] or providing guidance to our most sophisticated markets on lightly traded contracts[5], maybe it is time to focus on fixing what is actually broken, like the OCR rules which are the subject of today’s no-action relief.

[1] This statement will refer to the Commodity Futures Trading Commission as the “Commission” or “CFTC.”  All web pages cited herein were last visited on September 24, 2024.

[2] Statement of Commissioner Summer K. Mersinger Regarding Extension of Staff No-Action Position Regarding Ownership and Control Reports (September 22, 2023), available at https://www.cftc.gov/PressRoom/SpeechesTestimony/mersingerstatement092223b.

[3] Extension Letter at 1-2 (“Since 2014, [the Division of Market Oversight (‘DMO’)] has taken a no-action position with respect to reporting entities from certain reporting obligations under the OCR [f]inal [r]ule.  In September 2017, DMO issued no-action letter 17-45 (‘NAL 17-45’).…. NAL 17-45 extended the time period for the no-action position, which was itself previously granted and extended in several prior no-action letters, from certain reporting obligations under the OCR [f]inal [r]ule….

Subsequent to the issuance of NAL 17-45, on June 14, 2018, [the Futures Industry Association (‘FIA’)] and [the Commodity Markets Council (‘CMC’)] submitted a petition to the Commission, which requested, among other things, that the Commission codify the no-action positions provided in NAL 17-45…. As of the date of this letter, the Commission has not acted upon FIA and CMC’s petition….

On September 25, 2020, DMO issued no-action letter 20-30 (‘NAL 20-30’), which extended the no-action position in NAL 17-45.  On September 22, 2023, DMO issued no-action letter 23-14 (‘NAL 23-14’), which extended the no-action position in NAL 20-30 with respect to each obligation covered by NAL 23-14 ‘until the earlier of: (a) the applicable effective date or compliance date of Commission action addressing such obligation or (b) September 30, 2024.’  Therefore, without further action by the Commission, by its terms NAL 23-14 will expire on September 30, 2024.” (emphasis added).

[4] See Dissenting Statement of Commissioner Summer K. Mersinger Regarding Amendments to Part 40 of the CFTC’s Regulations (September 12, 2024), available at https://www.cftc.gov/PressRoom/SpeechesTestimony/mersingerstatement091224b.

[5] See Dissenting Statement of Commissioner Summer K. Mersinger on Guidance Regarding the Listing of Voluntary Carbon Credit Derivative Contracts (September 20, 2024), available at https://www.cftc.gov/PressRoom/SpeechesTestimony/mersingerstatement092024.