• CFTC Letter No. 20-28 Extension of CFTC Letter No. 19-17 Time-Limited No-Action Relief with Respect to the Treatment of Separate Accounts by Futures Commission Merchants

      • #
      • FRB #20-01
      • Notice Date
      • 23 September 2020
      • Effective Date
      • 23 September 2020
    • FINANCIAL AND REGULATORY BULLETIN

      TO:                  Chief Executive Officers                                                                     #20-01

                             Chief Financial Officers

                             Chief Compliance Officers

      CC:                  Division of Clearing and Risk, CFTC

                              Division of Swap Dealer and Intermediary Oversight, CFTC

       

      DATE:             September 23, 2020

       

      On July 10, 2019, the Commodity Futures Trading Commission (“CFTC”) issued CFTC Letter No. 19-17, containing, in part, Time-Limited No-Action Relief with Respect to the Treatment of Separate Accounts by Futures Commission Merchants (“FCMs”) (the “CFTC Letter 19-17”).  CFTC Letter 19-17 provided no-action relief extending until June 30, 2021 with respect to CFTC Regulation 39.13(g)(8)(iii) under certain conditions as outlined in the letter.  CFTC Letter 19-17, including the detailed conditions, may be found on the CFTC’s website at https://www.cftc.gov/csl/19-17/download.  

      In response, CME Clearing permitted its FCM clearing members to treat separate accounts of the same beneficial owner as separate accounts under Rule 930.F. for purposes of determining performance bond funds available for disbursement under the conditions of CFTC Letter 19-17 as provided in Financial and Regulatory Bulletin (“FRB”) #19-02 (attached).

      On September 15, 2020, the CFTC issued CFTC Letter No. 20-28 Supplemental Advisory and Time-Limited No-Action Relief with Respect to the Treatment of Separate Accounts by FCMs (the “CFTC Letter 20-28”), containing, in part, an extension of the Time-Limited No-Action Relief with Respect to the Treatment of Separate Accounts by FCMs and providing a timeframe for compliance. The CFTC Letter may be found on the CFTC’s website at https://www.cftc.gov/csl/20-28/download.

      This FRB updates FRB #19-02 to incorporate CFTC Letter 20-28.  The application of CFTC Letter 19-17, including any applicable time frames discussed in subsequent CFTC Letter 20-28, will be treated as an exception to Rule 930.F. granted by Exchange staff until the earlier of December 31, 2021 (or any CFTC extension thereof pursuant to CFTC Regulation 140.99) or such time as the CFTC amends Regulation 39.13(g)(8)(iii).

      If you have any questions, please contact the Financial and Regulatory Surveillance Department at 312-930-3230.