CFTC Staff Issues Time-Limited No-Action Relief for Futures Commission Merchants from Requirement to Obtain an Acknowledgement Letter from Certain Depositories

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Washington, DC — The U.S. Commodity Futures Trading Commission’s (Commission) Division of Swap Dealer and Intermediary Oversight (DSIO) recently announced in a no-action letter that DSIO will provide additional time for futures commission merchants (FCMs) to comply with Commission regulations requiring FCMs to obtain acknowledgement letters from certain depositories. DSIO will provide no-action relief until October 17, 2014.

Specifically, Commission Regulations 1.20(d)(3)(i) and (ii), 1.26, 22.5, 30.7(d)(3)(i) and (ii), and the Appendices require that FCMs deposit customer funds only with depositories that have provided the FCM with an acknowledgement letter in which such depositories agree to provide the DSIO Director (or such director’s designees) with direct, read-only electronic access to transaction and account balance information for FCM customer accounts.

Since some depositories require the Commission to enter into a standard on-line access agreement, many depositories to FCMs have not provided the acknowledgement letters required by Commission regulations. The depositories require an on-line access agreement to be executed before the depository may provide the DSIO Director with the required read-only access to transaction and account balance information for FCM customer accounts. The Division’s review, negotiation, and execution of such agreements will not be completed by July 12, 2014, the compliance date for obtaining the acknowledgement letters.

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