CFTC DSIO Provides Registration No-Action Relief for APs Subject to Statutory Disqualification (with Lofchie Comment)

The CFTC Division of Swap Dealer and Intermediary Oversight (DSIO) today announced the issuance of a no-action letter providing for a waiver procedure for associated persons of swap dealers that would, in the absence of such a procedure, have been prevented from working in the swaps business because they were subject to statutory disqualification. Under the terms of the letter, swap registrants will have to obtain a waiver with respect to such persons from the NFA.

Lofchie Comment: Its obviously great that the CFTC issued this letter, as, in its absence, persons that had, for example, a drunk driving conviction might have lost their jobs because of what seems an obvious drafting flaw in Dodd-Frank: that the law does not provide for an exemptive procedure for ordinary employees of swap registrants who have a criminal record even though there is an exemptive procedure for their supervisors at the same firm and for employees and supervisors at other types of financial firms. Notwithstanding that I am glad that this problem in the law has been fixed, I am curious why it took so long.

See: CFTC Letter 12-15 CEA Sections 4d, 4e, 4m, 4s(b)(6); and CFTC Part 3 Regulations; No-Action See also: CFTC Press Release.