CFTC issues no-action letter providing relief to IBs, commodity trading advisors

160px-US-CFTC-Seal.svgThe CFTC’s Division of Swap Dealer and Intermediary Oversight announced in a Monday no-action letter that it would provide relief from derivatives registration requirements for swap participants subject to the de minimis exception.

The relief provided by the CFTC, which applies to introducing brokers and commodity trading advisors, would also extend to the employees of an affiliate, where the employees may engage in certain activities in support or on behalf of the swap participant.

Additionally, in order to be eligible for the relief, affiliates of the swap participant must seek to be jointly and severally liable for any violations of the Commodity Exchange Act or CFTC regulations and affiliates and employees must not be subject to a statutory disqualification.

The CFTC said in the letter that an employee of a swap counterparty would not be considered an introducing broker if the employee is within the de minimis exception to the swap dealer definition, engaging in activity on behalf of the employer.

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