CFTC Grants No-Action Relief Regarding CPO Registration under New Streamlined Approach (CFTC Letter 14-71)
Commentary by Steven Lofchie
The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") granted no-action relief from certain registration requirements to a delegating CPO in accordance with the streamlined approach described in CFTC Letter 14-69.
The DSIO stated that it will not recommend enforcement action to the CFTC against the delegating CPO for failure to register under CEA Section 4m(1) in connection with the operation of the pool, subject to the conditions that (i) the designated CPO serves as the CPO of the pool, (ii) the designated CPO remains registered as a CPO and (iii) the delegating CPO and designated CPO continue to meet the criteria represented in CFTC Letter 14-69.
See: CFTC Letter 14-71.
Related news: CFTC Streamlines Process for CPO Delegation (with Mehta Comment) (CFTC Letter 14-69) (May 12, 2014).
Commentary
This is the first no-action letter that the CFTC issued with regard to CPO delegations under the streamlined approach of CFTC Letter 14-69. CFTC Letter 14-71 was issued swiftly under the streamlined approach of CFTC Letter 14-69, which was issued only seven days ago (on May 12). Given the number of CPO delegation request letters that the CFTC is likely to receive in the near future, the CFTC may find it difficult to maintain that turnaround time. Further, the CFTC response letter was brief, giving only basic information as to the delegation arrangement. We anticipate that the CFTC will publish all such letters (which are likely to be virtually identical) on the CFTC website.