CFTC Extends Relief on FCM Acknowledgement Letters | Practical Law

CFTC Extends Relief on FCM Acknowledgement Letters | Practical Law

The CFTC extended relief for futures commission merchants (FCMs) from the requirement to obtain standard form acknowledgement letters until April 30, 2015 if the failure to obtain the acknowledgement letter is due solely to the lack of an executed online access agreement between the FCM’s depository and the CFTC. This relief had been scheduled to expire on December 31, 2014.

CFTC Extends Relief on FCM Acknowledgement Letters

Practical Law Legal Update 2-594-2805 (Approx. 3 pages)

CFTC Extends Relief on FCM Acknowledgement Letters

by Practical Law Finance
Published on 31 Dec 2014 • USA (National/Federal)
The CFTC extended relief for futures commission merchants (FCMs) from the requirement to obtain standard form acknowledgement letters until April 30, 2015 if the failure to obtain the acknowledgement letter is due solely to the lack of an executed online access agreement between the FCM’s depository and the CFTC. This relief had been scheduled to expire on December 31, 2014.
On December 29, 2014, the CFTC released No-action Letter 14-157 (No-action 14-157) extending relief for futures commission merchants (FCMs) from the requirement to obtain standard form acknowledgement letters until April 30, 2015 if the failure to obtain the acknowledgement letter is due solely to the lack of an executed online access agreement between the FCM’s depository and the CFTC. This relief had been scheduled to expire on December 31, 2014.
CFTC Regulations 1.20(d)(3)(i) and (ii), 1.26, 22.5, 30.7(d)(3)(1) and (11) and their appendices now require each FCM and depository holding customer funds to use a standard template acknowledgment letter via a web-based submission site, which contains general filing instructions and provides a link for a depository to obtain technical support if it encounters issues in submitting the acknowledgment letters. FCMs and depositories are required to use the new template acknowledgment letters for all accounts opened on or after January 13, 2014. FCMs now have until October 17, 2014 to obtain the new acknowledgement letters.
On July 10, 2014, in No-action Letter 14-91, the CFTC granted no-action relief from the requirement that FCMs deposit customer funds only with depositories that agree to provide the director of the CFTC with direct, read-only electric access to transaction and account balance information for certain futures accounts (see Legal Update, Final Rules on Protection of FCM Customer Funds Adopted by CFTC). FCMs were initially required to obtain standard form acknowledgement letters from each depository that the FCMs use to hold customer funds by July 12, 2014. However, the CFTC has granted the extension in order to allow additional time to finalize depositories' access agreements.
On October 16, 2014, the CFTC released No-action Letter 14-127, extending relief for FCMs from the requirement to obtain standard form acknowledgement letters until December 31, 2014 if the failure to obtain the acknowledgement letter is due solely to the lack of an executed online access agreement between the FCM’s depository and the CFTC. No-action 14-157 is an extension of the relief granted under No-action 14-127.