CFTC Staff Extends Relief With Respect To Certain Position Limit Aggregation Requirements

August 8, 2019

Reading Time : 2 min

Key Points:

  • Until August 12, 2022, CPOs and CTAs may continue to file position limit disaggregation notices upon request, rather than prospectively, and exempt CTAs may continue to rely upon the “independent account controller” disaggregation exemption.

On August 10, 2017, staff of the U.S. Commodity Futures Trading Commission (CFTC) issued No-Action Letter 17-371, which provides relief with respect to the position limit disaggregation notice filing requirements under Rule 150.4(c)2 as well as certain other interpretive relief. On July 31, 2019, staff issued No-Action Letter 19-193, which extends all existing relief provided in NoAction Letter 17-37 until August 12, 2022. Accordingly, commodity pool operators (CPOs) and commodity trading advisors (CTAs) may continue to rely on the following relief with respect to the CFTC’s position limit aggregation rules:

  • Notices. Disaggregation exemption notices required pursuant to Rule 150.4(c) must only be filed if and when requested by the CFTC or a designated contract market (DCM). To the extent requested, such notice filings need only address the particular account or position identified by the CFTC or DCM.
  • Owned Entity Exemption. For purposes of any notice requested to claim the “owned entity” disaggregation exemption under Rule 150.4(b)(2), a CPO or CTA need only make the required certifications with respect to derivatives trading (as opposed to other trading) and need only address the owner (and not the owned entity) in situations where the owner is not aware, and should not be aware, of the derivative trading of the owned entity.
  • IAC. CTAs who qualify for an exemption from registering with the CFTC as a CTA may rely upon the “independent account controller” disaggregation exemption under Rule 150.4(b)(4), despite not technically qualifying as an “eligible entity” or “independent account controller.”
  • Substantially Identical Trading. CPOs and CTAs need not aggregate positions pursuant to the “substantially identical trading strategies” requirement in Rule 150.4(a)(2) unless the CPO or CTA holds or controls the trading of positions in more than one account in order to willfully circumvent applicable position limits.

Contact Information

If you have any questions regarding this alert, please contact the Akin Gump lawyer with whom you usually work or

Jan-Paul Bruynes
Email
New York
+1 212.872.7457

Jason M. Daniel
Email
Dallas
+1 214.969.4209

Graham McCall
Email
Dallas
+1 214.969.2837

 


1 https://www.cftc.gov/sites/default/files/idc/groups/public/@lrlettergeneral/documents/letter/17-37.pdf

2 The CFTC’s position limit aggregation rules are codified under 17 CFR 150.4(c).

3 https://www.cftc.gov/csl/19-19/download

Share This Insight

Related Services, Sectors, and Regions

© 2024 Akin Gump Strauss Hauer & Feld LLP. All rights reserved. Attorney advertising. This document is distributed for informational use only; it does not constitute legal advice and should not be used as such. Prior results do not guarantee a similar outcome. Akin is the practicing name of Akin Gump LLP, a New York limited liability partnership authorized and regulated by the Solicitors Regulation Authority under number 267321. A list of the partners is available for inspection at Eighth Floor, Ten Bishops Square, London E1 6EG. For more information about Akin Gump LLP, Akin Gump Strauss Hauer & Feld LLP and other associated entities under which the Akin Gump network operates worldwide, please see our Legal Notices page.