CFTC's DSIO Issues Time-Limited No-Action Letter for CPOs of Securitization Vehicles (CFTC Letter 13-07) (with Lofchie Comment)
The CFTC's Division of Swap Dealer and Intermediary Oversight ("DSIO") issued a time-limited letter stating that the DSIO will not recommend that the CFTC take enforcement action against the CPOs of securitization vehicles, which are required to register by March 31, 2013, for failure to comply with certain enumerated sections in CFTC Part 4 Regulations prior to June 30, 2013. The relief is available to operators of securitization vehicles that are not able to satisfy the conditions to CFTC Letter 12-45 or 12-14. In Letter 12-45, the CFTC had granted CPOs that could not qualify for an exemption until March 31, 2013 to register as such. This relief is contingent upon compliance with the guidance set forth in the letter with respect to those sections. The first condition of the letter is that the operator of the relevant pool shall have initiated registration by March 31, 2013.
In addition to providing limited relief from compliance with Part 4 for certain CPOs, the letter seems also to provide some additional exemptions from registration, including one as to pools that have not issued securities with a rating lower than BB.
Lofchie Comment: The exemptive relief from the conditions of Part 4 is only available to firms that had begun to register as CPOs by March 31st; however, the letter was not published until April 2nd. (Further, March 29th was Good Friday, and the futures markets were closed on that day and through the weekend until April 1st.) While it is true that the relevant firms were supposed to be registered on March 31st, the letter also provides a further exemption from registration, which would seem to imply that the CFTC did not actually expect firms to be registered. Further, the letter begins by saying that the CFTC has not "finalized its policy determinations" with respect to securitization vehicles, which raises the question of why it is requiring registration at all. Even in light of the CFTC’s somewhat indifferent relationship with the calendar, this is an odd letter.
Click hereto view CFTC Letter 13-07 (links externally to CFTC website).Related Item: CFTC Exclusion from Commodity Pool Regulation for Securitization Vehicles (News Item Regarding, and Link to, Letter 12-14).Related Item: CFTC Staff Expands Existing Relief as to Securitizations (with Lofchie Comment) (News Item Regarding, and Link to, Letter 12-45).