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Print articleCFTC Issues No-Action Relief for Certain Derivatives Market Participants in Response to COVID-19
March, 2020 - Brian Sung, Matthew Frankle, Matthew Howes
The CFTC recently published several no-action letters issuing temporary relief to certain market participants in response to the Coronavirus/COVID-19 outbreak, which was declared a pandemic by the World Health Organization on March 11, 2020. The CFTC’s targeted relief efforts are designed to maintain continuity, integrity and liquidity of the derivatives markets during periods of social distancing and displacement of personnel from normal business sites, which the CFTC acknowledged has made compliance with certain regulatory requirements under the Commodity Exchange Act and CFTC regulations particularly challenging. In this alert we provide a brief overview of the relief issued by the CFTC.
The U.S. Commodity Futures Trading Commission (“CFTC”) published several no-action letters issuing temporary relief to certain market participants in response to the Coronavirus/COVID-19 outbreak, which was declared a pandemic by the World Health Organization on March 11, 2020. The CFTC’s targeted relief efforts are designed to maintain continuity, integrity and liquidity of the derivatives markets during periods of social distancing and displacement of personnel from normal business sites, which the CFTC acknowledged has made compliance with certain regulatory requirements under the Commodity Exchange Act (“CEA”) and CFTC regulations particularly challenging.
Among such efforts, the CFTC’s Division of Swap Dealer and Intermediary Oversight (“DSIO”) issued no-action letters stating that, subject to applicable conditions specified in each such letter, it would not recommend that the CFTC take enforcement action for violations of the following regulatory requirements:
• With respect to persons that are members of designated contract markets (“DCMs”) or swap execution facilities (“SEFs”) (CFTC Letter No. 20-02):
o until June 30, 2020, any requirement to time-stamp pursuant to CFTC Regulation 1.35, if the personnel responsible are required to be absent from their normal business site, provided that a record of the date and time, to the nearest minute, is otherwise created and maintained in accordance with CFTC Regulation 1.35.
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