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Interpretative Letters

Interpretative Letters
10-01 PDF Image; Part 1 and Part 30; Interpretation
DCIO responded to a request for guidance from the Joint Audit Committee (JAC) as to investments of customer funds by futures commission merchants (FCMs) in corporate debt securities guaranteed by the Federal Deposit Insurance Corporation (FDIC) under its Temporary Liquidity Guarantee Program (TLGP). The letter sets forth the conditions under which TLGP securities guaranteed by the FDIC may be permitted investments for customer segregated funds under Regulation 1.25 or customer secured amount funds under Regulation 30.7, and further specifies the necessary haircuts to FCM adjusted net capital under Regulation 1.17. The letter also provides guidance to the JAC as to whether, and to what extent, Regulation 1.32 permits offsets of FCM customer account deficits against TLGP securities the customer has deposited for its account with the FCM.
10-21 PDF Image; Regulation 1.25; Interpretation
Securities and Exchange Commission (SEC) rule 22e-3 (Rule 22e-3), adopted by the SEC February 23, 2010 and effective May 5, 2010, allows a money market mutual fund (MMMF or fund) to suspend redemptions and postpone payment of redemption proceeds to facilitate an orderly liquidation of the fund. The Division of Clearing and Intermediary Oversight (the Division) received a letter from the Joint Audit Committee requesting an interpretation of the impact, if any, of Rule 22e-3 on Reg. 1.25. In its response, the Division provided an overview of the Reg. 1.25 treatment of MMMFs, outlined Rule 22e-3, and discussed the interplay of Reg. 1.25 and Rule 22e-3. The Division concluded that Rule 22e-3 falls within the parameters of Reg. 1.25(c)(5)(ii)(D) and therefore the status of an MMMF that otherwise qualifies as a Reg. 1.25 permitted investment would not change as a result of the new rule.
10-25 PDF Image; Regulation 4.10(d)(1); Interpretation
The Division of Clearing and Intermediary Oversight issued an interpretation that a limited liability company and a trust operated by the limited liability company are not commodity pools where all participants are close family members.
10-36 PDF Image; Sections 2(c)(2)(B)(iv)(I)(bb) and 2(c)(2)(C)(iii)(I)(bb); Interpretation
The Division confirmed that under the specific facts represented to it, a firm that was required to be registered as an IB, and was so registered, would not also be required to register as a CTA in connection with providing certain services to its retail foreign exchange customers.

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