October 22, 2013
CFTC Adopts Rule Amendment to Clarify that Prohibition against Swap Dealers and Major Swap Participants Associating with Persons Who Are Statutorily Disqualified Does Not Apply in the Case of Clerical and Ministerial Employees
Washington, DC – The Commodity Futures Trading Commission (CFTC) today announced issuance of an amendment to its Regulation 23.22 to make clear that swap dealers (SDs) and major swap participants (MSPs) are not subject to the prohibition in Section 4s(b)(6) of the Commodity Exchange Act (Act) on associating with a person who is subject to a disqualification from registration under Section 8a(2) or 8a(3) of the Act (Statutory Disqualification) where the person is a clerical or ministerial employee.
Section 4s(b)(6) of the Act provides that except to the extent otherwise specifically provided by the CFTC, it is unlawful for an SD or MSP to permit a person associated with it who is subject to a Statutory Disqualification to effect or be involved in effecting swaps transactions on its behalf if the SD or MSP knew, or in the exercise of reasonable care, should have known, of the Statutory Disqualification. CFTC Regulation 23.22 makes this prohibition generally applicable to associated persons of SDs and MSPs. However, CFTC Regulation 1.3(aa)(6) excludes a person associated with an SD or MSP in a clerical or ministerial capacity from the “associated person” definition. To resolve any possible confusion between these two provisions, the CFTC is amending Regulation 23.22 to except clerical and ministerial employees from the Statutory Disqualification prohibition. As the CFTC explained in issuing this amendment, this action is consistent with the treatment under the Act and CFTC regulations of clerical and ministerial employees of other registrants.
Last Updated: October 22, 2013