CFTC Issues Relief from Certain Recordkeeping Requirements under Rule 1.35(a) (CFTC Letter 14-147) (with Delta Strategy Group Summary)

The CFTC issued a no-action letter providing relief from certain recordkeeping requirements under CFTC Rule 1.35(a). The letter expands and extends the relief that was provided previously in CFTC letter 14-60 by means of the following:

• Exempting CFTC-registered commodity trading advisors ("CTAs") that are members of SEFs or designated contract markets from the requirement to record oral communications under Rule 1.35(a). Thus, CTAs will be exempt from recording oral communications leading to the execution of a swap transaction, as previously provided in CFTC Letter 14-60, as well as oral communications leading to the execution of transactions in other CFTC-regulated products (such as futures and commodity options) and related cash or forward transactions.
• Otherwise exempting entities subject to Rule 1.35(a) from the requirement to maintain records of oral and written communications leading to the execution of a transaction in a manner that links the record of the pre-execution communication to a particular transaction.

The no-action relief will expire on the earlier of December 31, 2015, or the effective date of the CFTC's recent proposal to amend Rule 1.35(a), which was published in the Federal Register on November 14, 2014.

Click here to view a summary of the letter by Delta Strategy Group.

See: CFTC Letter 14-147.Related news: CFTC Staff Issues Time-Limited No-Action Letter on the Applicability of Oral Recording Requirements for Certain Members of DCMs or SEFs (CFTC Letter 14-60) (with Lofchie Comment) (April 25, 2014); CFTC Proposal Regarding Records of Commodity Interest and Related Cash or Forward Transactions (Fed. Reg.) (November 14, 2014).