Advisory: #42-01
For Release: October 5, 2001

CFTC’s Division of Trading and Markets Clarifies
Certain Exemptive Relief

The Division of Trading and Markets of the Commodity Futures Trading Commission (Commission or CFTC) is issuing this Advisory to clarify that certain exemptive relief granted by the Securities and Exchange Commission (SEC) to registered securities broker-dealers in connection with the events of September 11, 2001, also applies to futures commission merchants (FCMs) and introducing brokers (IBs).

The Commission’s rule regarding the minimum financial requirements for FCMs and IBs, Rule 1.17, incorporates by reference certain provisions of specified SEC rules, including SEC Rule 15c3-1. In connection with the events of September 11, the SEC has granted relief from certain of these rules. For example, the SEC has determined that broker-dealers, when computing the amount of net capital on hand under SEC Rule 15c3-1, need not consider the days through October 5, 2001 as business or calendar days for purposes of taking required deductions from net capital because of failures to complete government securities transactions. See, e.g., Securities Exchange Act Release No. 44871 (September 28, 2001).

Pursuant to authority delegated by the Commission to the Director of the Division of Trading and Markets under CFTC Rule 140.91, the Division of Trading and Markets has determined to incorporate by reference any relief granted by the SEC as a consequence of the events of September 11 pertaining to any SEC rules that are incorporated by reference into the CFTC’s rules. As a result, to the extent capital calculations by FCMs and IBs incorporate certain of the requirements of SEC Rule 15c3-1, the relief granted by the SEC to securities broker-dealers with respect to those provisions is also deemed to be applicable to FCMs and IBs.

This interpretation of the Division of Trading and Markets applies prospectively to any additional relief granted by the SEC in connection with the events of September 11, to the extent such relief affects SEC rules that are otherwise incorporated by reference into CFTC rules. CFTC registrants should also be aware that the CFTC has previously announced other relief measures with respect to recordkeeping and other requirements as a result of the events of September 11, 2001.

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