CFTC Staff Letter 13-48: No-Action Relief from Aggregation Prohibition for Large Notional Off-Facility Swaps

U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-5000
Facsimile: (202) 418-5521 www.cftc.gov
Division of
Market Oversight
CFTC Letter No. 13-48 Amended
No-Action
Division of Market Oversight
No-Action Relief For Certain Commodity Trading Advisors and Investment Advisors From the Prohibition of Aggregation Under Regulation 43.6(h)(6) for Large Notional Off-Facility Swaps Ladies and Gentlemen:
This letter responds to requests received from multiple parties by the Division of Market Oversight (the “Division”) of the Commodity Futures Trading Commission (the “Commission”) for no-action relief from the aggregation prohibition in § 43.6(h)(6) for certain commodity trading advisors (“CTAs”) and investment advisors (“IAs”) with respect to large notional off￾facility swaps. 1 In particular, the parties requested that the Division provide no-action relief from § 43.6(h)(6) for CTAs and IAs that otherwise meet the qualifications for aggregating orders of different accounts for purposes of satisfying the minimum block trade size or cap size requirement under § 43.6(h)(6)(i) and (ii). The requested relief would extend the exception provision permitting aggregation of orders by certain CTAs and IAs for block transactions subject to the rules of a swap execution facility (“SEF”) or designated contract market (“DCM”) to large notional off-facility swaps. Background Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) 2 amended the Commodity Exchange Act (“CEA”) to establish a comprehensive new regulatory framework for swaps. Among other things, § 2(a)(13)(E)(ii) and (iii) of the CEA respectively required the Commission to prescribe regulations specifying “the