CFTC No-Action Relief from Recordkeeping Requirements under Regulation 1.35(a)

U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-5000
Division of Swap Dealer and
Intermediary Oversight
Division of
Market Oversight
Gary Barnett
Director
Vincent A. McGonagle
Director
CFTC Letter No. 14-147
No-Action
December 16, 2014
Division of Swap Dealer and Intermediary Oversight Division of Market Oversight Re: No-Action Relief from Certain Recordkeeping Requirements under Commission Regulation 1.35(a) Ladies and Gentlemen:
This letter provides no-action relief regarding certain of the recordkeeping obligations under Regulation 1.35(a). First, this letter grants no-action relief to commodity trading advisors (“CTAs”) that are registered with the Commodity Futures Trading Commission (the “Commission” or “CFTC”) and are members of designated contract markets (“DCMs”) or of swap execution facilities (“SEFs”) from the requirement to record oral communications under Regulation 1.35(a). This provision is an extension and expansion of the relief granted in CFTC Staff Letter No. 14-60, which granted relief to CTAs that are members of DCMs or SEFs from the requirement under Regulation 1.35(a) to record all oral communications that lead to the execution of swap transactions. That relief was scheduled to expire on December 31, 2014. Second, this letter provides no-action relief with regard to the form and manner requirements that apply to records of oral and written communications that lead to the execution of a transaction in a commodity interest and related cash or forward transactions. Specifically, the Division of Swap Dealer and Intermediary Oversight and the Division of Market Oversight (together, the “Divisions”) would not recommend an enforcement action against a market participant on the grounds that such records are not linked to a particular transaction.
I. Background
A. Regulation 1.35(a)
On December 21, 2012, the Commission published a final rulemaking, which amended the recordkeeping provisions of Commission Regulation 1.35(a) to integrate the rule more fully with the framework created by the Dodd-Frank Wall Street Reform and Consumer Protection