CFTC DSIO Provides Firm Time-Limited No-Action Relief from IB/CTA Registration

The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") exempted a firm and its employees from the requirement to register as an introducing broker ("IB") or CTA when engaging in swap transactions on behalf of an affiliated swap-dealer counterparty.

The DSIO provided no-action relief to the firm even though the firm did not qualify for the exemption provided under CFTC Staff Letter 12-70 because it is subject to statutory disqualification under CEA Section 8a. Specifically, Letter 12-70 disqualifies a firm with prior misconduct from receiving relief. The firm had argued that - since its prior misconduct was due to deficiencies in its policies and procedures and not fraud - an exemption should be made.

The DSIO consented to provide time-limited no-action relief to the firm until June 30, 2020.