CFTC Staff Provides Relief and Further Guidance Regarding FCM Separate Account Practices
Washington, D . C . — The Commodity Futures Trading Commission’s
Division of Swap Dealer and Intermediary Oversight (DSIO) and Division
of Clearing and Risk (DCR) today issued a joint staff letter
containing an advisory and time limited, conditional no-action relief
related to the treatment by futures commission merchants (FCMs) of
separate accounts for a particular customer .
This advisory and
no-action relief builds on CFTC Staff Letter 19-17 in addressing CFTC
Regulation 1 . 56’s prohibition on limited recourse, as well as
requirements set forth by Regulation 39 . 13(g)(8)(iii) concerning FCM
margining practices with respect to customers with more than one
cleared derivatives account .
Specifically, the DCR-DSIO joint
staff letter: (i) extends the time to comply with the conditions of
relief until March 31, 2021given the extraordinary difficulties
created by COVID-19; (ii) provides further interpretations regarding
the requirements of Regulation 1 . 56 for separate accounts; (iii)
provides further conditional no-action relief for cases where
compliance with Regulation 1 . 56 is ambiguous, with the stipulation
that fulfillment of the conditions be completed by March 31, 2021; and
(iv) extends the overall time-limit on the conditional no-action
relief with respect to Regulation 39 . 13(g)(8)(iii) through December
31, 2021 .
“This advisory and conditional relief acknowledges
the hard work that registrants are undertaking in difficult
circumstances attributable to COVID-19,” explained DCR Director Clark
Hutchison and DSIO Director Joshua Sterling . “We fully expect that
firms will make continued progress to complete all the necessary steps
under these revised timelines . ”