Joint Trades Request for Extension of Certain Covid-19 No-Action Regulatory Relief
Summary
SIFMA and joint trades provided comments to the Divisions, that they extend through midnight on September 30, 2020, the previously-granted no-action regulatory relief in CFTC Letter Nos. 20-02, 03, 04, 05, 06, 07 and 09 due to the ongoing COVID-19 pandemic.
Excerpt
June 2, 2020
Mr. Joshua Sterling
Director, Division of Swap Intermediary Oversight
Ms. Dorothy DeWitt
Director, Division of Market Oversight
U.S. Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581
Re: Request for Extension of Certain COVID-19 No-Action Regulatory Relief
Dear Mr. Sterling and Ms. DeWitt:
The Futures Industry Association (“FIA”), the International Swaps and Derivatives Association, Inc. (“ISDA”), and the Securities Industry and Financial Markets Association (“SIFMA”) request, pursuant to Commission Rule 140.99 and on behalf of their respective members, that the Divisions extend through midnight on September 30, 2020, the previously-granted no-action regulatory relief in CFTC Letter Nos. 20-02, 03, 04, 05, 06, 07 and 09 due to the ongoing COVID-19 pandemic.1
As the Divisions noted in each of the no-action letters, the ongoing COVID-19 pandemic has made it difficult for all categories of CFTC registrants and other market participants to comply on a timely basis with certain of their obligations under the Commodity Exchange Act and the Commission’s regulations. In granting the no-action relief, the Divisions acknowledged that “registrants may have significant operations in affected areas or areas that may become affected by the COVID-19 pandemic. Disruptions in transportation and limited access to facilities and support staff as a result of the COVID-19 pandemic could hamper efforts of registrants to meet their regulatory obligations.” E.g., CFTC Letter No. 20-06 at 1. Because of these material obstacles to compliance, the Divisions granted the no-action relief cited above “where compliance is anticipated to be particularly challenging or impossible because of displacement of registrant personnel from their normal business sites due to community non-pharmaceutical interventions such as social distancing and closures in response to the COVID-19 pandemic.” Id.
The Commission is continuing to provide registrants and market users with regulatory relief during this challenging period. For example, on May 28, 2020, the Commission revised the compliance schedule for the posting and collection of initial margin under the CFTC Margin Rule to defer the Phase 5 compliance date to September 1, 2021 “to address the operational challenges faced by certain entities subject to the [rule] as a result of the coronavirus disease 2019 (“COVID-19”) pandemic.2