The CFTC’s Division of Market Oversight has issued an extension of a no-action letter to address what it described as continuing compliance difficulties associated with specific OCR reporting obligations identified by reporting parties and market participants.
The Commission’s latest extension affects the DMO’s position under the CFTC No-Action Letter No. 20-30, issued in September 2020. Without action by the Commission, those terms would have expired on September 29, 2023, the CFTC said.
As a result of the extension, the DMO said in a release that it will not recommend the CFTC enforcement action in nearly a dozen instances, including in the following circumstances:
- Accurately reporting a trading account owner’s (TAC) and volume threshold account (VTA) owner’s name within three business days following the day on which the account became reportable;
- Failure to report certain TAC and VTA controller identifying information;
- Failure to provide the level of confidence a reporting party has in the accuracy of the information provided to it by its customers or counterparties;
- Failure to report a volume threshold account based on a reportable trading volume level of 50 contracts (provided such reporting party reports instead based on a reportable trading volume level of 250 or more contracts per day).
In the request, the associations requested a postponement of the no-action position regarding certain data reporting requirements of parts 17, 18, and 20 of the Commission’s regulations implemented pursuant to the Ownership and Control Reports final rule.
The CFTC noted in its letter that the DMO has taken a no-action position with respect to certain reporting obligations under the OCR Final Rule since 2014. In September 2017, DMO issued no-action letter 17-45 in response to requests from FIA and CMC on behalf of affected reporting entities, including carry brokers and reportable traders. No-action letter 17-45 extended the time period for the no-action position, which was itself previously granted and extended in several prior no-action letters, from certain reporting obligations under the OCR Final Rule.
Extension called “troubling.” In a statement, CFTC Commissioner Summer Mersinger said she supported the extension of the staff no-action relief but found it troubling that it represented “another instance of successive extensions of staff no-action relief on issues that the Commission has failed to address permanently.”
Mersinger noted that a rulemaking that could address OCR issues on a permanent basis is included in the Commission’s “Agency Rule List” published in the spring of this year, but the target date given for the issuance of a notice of proposed rulemaking regarding the OCR rules was not until March 2024.
“Under the circumstances, I urge staff and the Commission to develop and issue an OCR proposed rulemaking soon – so that staff is not compelled to issue yet another extension when this one expires a year from now,” she said.
In its letter, the CFTC said the current no-action position will remain in effect until the earlier of an applicable effective date or compliance date of a Commission action, such as a rulemaking or order, or September 30, 2024.