CFTC’s DSIO provides COVID-19 related relief to market participants - 18 March 2020

The CFTC’s Division of Swap Dealer and Intermediary Oversight issued several no-action letters detailing regulatory relief which are geared towards keeping futures and derivatives markets functioning smoothly in response to the COVID-19 crisis.

In response to the COVID-19 (coronavirus) pandemic, the CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO), issued five no-action letters which provide temporary, targeted relief to futures commission merchants (FCMs), introducing brokers (IBs), swap dealers (SDs), retail foreign exchange dealers (RFEDs), floor brokers (FBs), and other market participants. In a press release accompanying the issuance of the no-action letters, the agency stated that, "The spread of coronavirus has caused compliance with certain CFTC requirements to be particularly challenging or impossible because of displacement of registrant personnel from their normal business sites due to social distancing and other measures," (CFTC Letter 20-02, CFTC Letter 20-03, CFTC Letter 20-04, CFTC Letter 20-05, and CFTC Letter 20-06, all dated March 17, 2020).

A summary of the relief provided in the various no-action letters includes the following:

• Relief for Members of Designated Contract Markets and Swap Execution Facilities. In CFTC Letter 20-02, the DSIO granted temporary, targeted no-action relief to members of designated contract markets (DCMs), and swap execution facilities (SEFs), from time-stamping requirements when located in remote, socially-distanced locations. The relief still requires that a record of the date and time, to the nearest minute, be otherwise created and maintained in accordance with Commission regulation 1.35.
• Relief for Futures Commission Merchants and Introducing Brokers. In CFTC Letter 20-03, DSIO granted temporary, targeted no-action relief to FCMs and IBs from CFTC regulations requiring recording of oral communications related to voice trading and other telephonic communications as well as time-stamping requirements when located in remote, socially-distanced locations. Additionally, DSIO granted 30 days of no-action relief to FCMs from the requirement to furnish annual compliance reports to the CFTC.
• Relief for Swap Dealers. In CFTC Letter 20-04, the DSIO granted temporary, targeted no-action relief to swap dealers from CFTC regulations requiring recording of oral communications related to voice trading and other telephonic communications as well as time-stamping requirements when located in remote, socially-distanced locations. DSIO also granted 30 days of no-action relief to SDs from the requirement to furnish annual compliance reports to the CFTC.
• Relief for Retail Foreign Exchange Dealers. In CFTC Letter 20-05, DSIO granted temporary, targeted no-action relief to RFEDs from CFTC regulations requiring recording of oral communications related to voice trading and other telephonic communications as well as time-stamping requirements when located in remote, socially-distanced locations.
• Relief for Floor Brokers. In CFTC Letter 20-06, DSIO granted temporary, targeted no-action relief to FBs from CFTC regulations requiring recording of oral communications related to voice trading and other telephonic communications as well as time-stamping requirements when located in remote, socially-distanced locations. Additionally, DSIO granted relief from the requirement to be located on the premises of a DCM and to register as IBs, which might otherwise have been triggered in connection with trading activities undertaken at remote, socially-distanced locations.

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