March 17, 2020
CFTC Issues Second Wave of Relief to Market Participants in Response to COVID-19
Washington, D.C. — The Commodity Futures Trading Commission today announced the Division of Market Oversight (DMO) has issued three no-action letters providing temporary, targeted relief to swap execution facilities (SEFs) and certain designated contract markets (DCMs) in response to the COVID-19 (coronavirus) pandemic.
The spread of coronavirus has caused compliance with certain CFTC requirements to be particularly challenging or impossible because of displacement of personnel from normal business sites due to social distancing and other measures.
“These prudent, targeted, and temporary actions will help facilitate orderly trading and liquidity in our derivatives markets. The CFTC remains squarely focused on promoting their integrity, resilience, and vibrancy through sound regulation,” said CFTC Chairman Heath P. Tarbert. “At my direction, the CFTC has pivoted our approach to take this challenge head on and we have dedicated appropriate resources to adapt to market developments. I thank DMO Director Dorothy DeWitt and her staff for their expeditious development of this relief.”
Subject to the conditions stated in the letters, the relief provided is as follows:
- Relief for Swap Execution Facilities. DMO has granted temporary, targeted no-action relief to SEFs from CFTC regulations requiring recording of oral communications related to voice trading and other telephonic communications that will make them unable to comply with certain audit trail requirements, recordkeeping requirements related to maintaining a complete audit trail, and monitoring requirements related to audit trail reconstruction. This relief expires on June 30, 2020. Because SEFs have reprioritized and reallocated personnel that otherwise would have been involved in the preparation and submission of reports such as the annual compliance report, DMO will provide an extension of the time to submit filings in order to allow SEFs to continue to focus on supporting orderly and resilient markets while implementing recommended practices to curtail the spread of COVID-19. [See CFTC Letters No. 20-07 and 20-08]
- Relief for Designated Contract Markets. DMO has granted temporary, targeted no-action relief to certain DCMs from audit trail and related requirements. This relief was necessary due to the displacement of market participants, such as floor brokers, from trading floors and other designated premises from which they may enter orders. This relief expires on June 30, 2020. [See CFTC Letter No. 20-09]