Mar. 2025 CFTC Extension of Time-Limited No-Action
On Mar. 10, 2025, CFTC issued No-action letter 25-04, entitled Extension of time-limited no-action position with respect to the treatment of separate accounts by FCMs.
Follows Jan. 2025 final rule to require FCMs to ensure customer does not withdraw funds if balance would be insufficient to meet initial margin obligations, see #201737.
In response to industry associations requesting no-action position extension to Jul. 21, 2025, so that FCMs may continue to operate as they come into compliance with rule.
Conditional no action position re Regulation 39.13(g)(8)(iii) extended to Jul. 21, 2025.
On Jun. 24, CFTC extended no-action protections for FCMs into 2025.
CFTC published No-action letter 24-07 to extend protections for futures commission merchants and asset managers from enforcement re rules on separation of accounts.
Follows initial no-action relief to FCMs, asset managers issued in NAL 19-17, Jul. 2019.
To end no-action letters (NAL), CFTC proposed second set of final rules in Feb. 2024 to codify treatment of accounts by a single customer as separate entities, see #201737.
Background
NALs written by staff condition enforcement action (EA) will not be recommended for failure to comply with a specific CEA provision or CFTC regulation; only to bind staff.
NAL 19-17 set advisory standards for FCMs to treat multiple accounts of a single customer as separate if a funds' withdrawal would not suffice to cover initial margin.
19-17 gave relief for FCMs compliance with customer margin requirements and cleared derivatives clearing organizations (DCO) of requirements, (17 CFR 39.13(g)(8)(iii)).
In addition, FIA communications to CFTC from 2019-2023 reiterated FCMs in majority comply with the separation of accounts and holding customers re withdrawals, margin.
No-Action Relief
Under current NAL 24-07, enforcements will not be recommended and FCMs, asset managers are advised to comply with provisions set forth in 17 CFR 39.13(g)(8)(iii).
No-action relief will be in place until Jun. 30, 2025 or until a final rule is implemented.
Mar. 2025 CFTC Extension of Time-Limited No-Action
On Mar. 10, 2025, CFTC issued No-action letter 25-04, entitled Extension of time-limited no-action position with respect to the treatment of separate accounts by FCMs.
Follows Jan. 2025 final rule to require FCMs to ensure customer does not withdraw funds if balance would be insufficient to meet initial margin obligations, see #201737.
In response to industry associations requesting no-action position extension to Jul. 21, 2025, so that FCMs may continue to operate as they come into compliance with rule.
Conditional no action position re Regulation 39.13(g)(8)(iii) extended to Jul. 21, 2025.
