CFTC Issues Temporary No-Action Relief for FCMs Regarding Acknowledgement Letters from Certain Depositories (CFTC Letter 14-91)

The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") issued time-limited no-action relief to futures commission merchants ("FCMs") regarding the CFTC requirement that FCMs obtain an acknowledgement letter from certain depositories that hold customer funds. The relief is necessary to provide additional time to finalize the depositories' access agreements with the CFTC, until October 17, 2014.

In the letter, the DSIO provided additional time for FCMs to comply with CFTC Rules 1.20(d)(3)(i) and (ii) ("Futures Customer Funds to be Segregated and Separately Accounted For"), 1.26 ("Deposit of Instruments Purchased with Futures Customer Funds"), 22.5 ("Futures Commission Merchants and Derivatives Clearing Organizations: Written Acknowledgement"), and 30.7(d)(3)(i) and (ii) ("Treatment of Foreign Futures or Foreign Options Secured Amount"), and the corresponding Appendices. These rules require FCMs to deposit customer funds only with depositories that have provided the FCM with an acknowledgement letter in which such depositories agree to provide the DSIO Director with direct, read-only electronic access to transaction and account balance information for FCM customer accounts; however, the CFTC's review, negotiation, and execution of such agreements will not be completed by the scheduled compliance date, July 14, 2014, necessitating this relief.

The relief will expire on October 17, 2014.

As linked below, the CFTC staff also issued corresponding no-action letters to the related depositories.

See: CFTC Letter 14-91; CFTC Press Release.
See also: CFTC Issues Three No-Action Letters Regarding Written Acknowledgement Requirements (CFTC Letters 14-92, 14-93, and 14-94) (July 11, 2014).