The CFTC Division of Market Oversight ("DMO") extended existing no-action relief (see previous coverage) and granted additional relief to reporting entities from ownership and control reporting ("OCR") requirements. Specifically, the relief was granted from OCR requirements for CFTC Forms 102/102S, 40/40S and 71.

The relief was granted in response to requests from the Futures Industry Association and the Commodity Markets Council. The OCR final rule instituted requirements intended to enhance the identification of futures and swap market participants, and included several reporting requirements to collect ownership and control information for active accounts. The DMO previously granted certain no-action relief to address concerns that the OCR requirements presented compliance issues that made it difficult for entities to "fully comply" with certain aspects of the rule.

The DMO extended the exemptive relief previously provided by CFTC Letter 16-32 as follows:

  • an additional two days to report the name of a trading account owner and volume threshold account owner;
  • relief from requirements for reporting certain trading account controller ("TAC") and volume threshold account controller ("VTAC") identifying information;
  • relief reducing the amount of information required to be provided by clients to reporting parties;
  • excusing reporting on accounts with a trading volume below 250 contracts on a particular day; and
  • relief from reporting certain omnibus account originator and consolidated account owner information.

The DMO also provided additional relief, including relief from:

  • reporting certain TAC and VTAC identifying information;
  • the requirement to annually refresh Forms 102A, 102B and 102S;
  • certain contact information reporting requirements;
  • answering question 12 on Forms 40 or 40S requesting information on persons who directly or indirectly influence, or exercise control over, but not control of, the trading of a reporting party; and
  • filing change updates, unless requested by a special call.

The no-action relief will remain effective until the earlier of (i) the later of an applicable or compliance date for CFTC action addressing the reporting obligations or (ii) September 28, 2020.

Commentary / Nihal Patel

The letter is notable in that it provides a relatively lengthy delay and strongly suggests that the CFTC is reconsidering the OCR reporting requirements adopted in 2013. First, while parts of the relief granted in Letter 16-32 were scheduled to expire this week, the new letter runs for three years, unless the CFTC, by rule, takes action to address the relevant obligations. Further, the staff indicated in the letter that it "plans to use the period of relief to consider whether to recommend that the Commission pursue changes to the [2013 OCR rule]."

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