DERIVATIVES—CFTC extends no-action relief from certain position aggregation requirements - 12 August 2022

The CFTC extended no-action relief from certain position aggregation requirements under CFTC Regulation 150.4 for an additional three years.

The CFTC’s Division of Market Oversight (DMO) issued a no-action letter extending CFTC Staff Letter No. 19-19, regarding certain position aggregation requirements, which expires August 12, 2022. CFTC Staff Letter No. 22-09 provides that DMO will not make an enforcement referral to the Commission with respect to CFTC Regulation 150.4 for an additional three years, subject to certain conditions, including compliance with: 1) streamlined notice filing requirements; 2) revised definitional conditions, for purposes of complying with the aggregation requirements, for eligible entities, independent account controllers, and commodity trading advisors; and 3) limited aggregation requirements for the “substantially identical trading strategies” rule.

The no-action letter also gives DMO time to assess the impact of the Positions Limits Final Rule on the aggregation requirements in CFTC Regulation 150.4 and consider the need for regulatory action, including a notice and comment rulemaking. The letter will remain in effect until the earlier of either August 12, 2025, or the effective date of a rulemaking codifying the relief.

Mersinger statement. Commissioner Mersinger issued a statement supporting the extension of the no-action relief. However, Mersinger believes that CFTC Regulation 150.4 is not working, and the Commission should focus on amending the regulation rather than using no-action relief. “I appreciate that extending that relief will provide certainty to impacted market participants for an additional three years. However, the certainty that market participants seek, and that the Commission owes them, should be provided by the Commission fixing unworkable rules rather than using no-action relief to “kick the can down the road” for another three years.” said Mersinger.

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