CFTC Staff Letter 14-33: Time-Limited No-Action Relief for trueEX DCM Members from Oral Communication Recording Requirements

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. 14-33
No-Action
March 21, 2014
Division of Swap Dealer and Intermediary Oversight Division of Market Oversight Fran Kenck Chief Regulatory Officer 162 5 th Avenue, Suite 902 New York, New York 10010 Re: Time-Limited No-Action Relief for Certain Members of a Designated Contract Market from the Requirement to Record Oral Communications, Pursuant to Commission Regulation 1.35(a), in Connection with the Execution of Swap Transactions Dear Ms. Kenck:
This letter is in response to a March 21, 2014 letter received by the Division of Swap Dealer and Intermediary Oversight (“DSIO”) and the Division of Market Oversight (“DMO”) (collectively the “Divisions”) of the Commodity Futures Trading Commission (“Commission”) from you on behalf of trueEX, LLC (“trueEX”), a designated contract market (“DCM”) and temporarily registered swap execution facility (“SEF”). In the letter, trueEX seeks relief from the recordkeeping requirements of Commission Regulation (“Regulation”) 1.35(a), with respect to oral communications, to the extent that such requirements apply to commodity trading advisors that are members of trueEX’s designated contract market (“trueEX DCM”) in connection with the execution of swaps on the trueEX DCM. The Commission promulgated Part 1 of its regulations pursuant to the Commodity Exchange Act, 7 U.S.C. § 1 et seq. The Commission recently amended Regulation 1.35(a) in order to integrate the Regulation more fully with the new statutory framework for swaps created by the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111–203, 124 Stat. 1376 (2010), and to conform the existing recordkeeping requirements of Regulation 1.35(a) to the recordkeeping requirements for swap dealers and major swap participants, as set forth in Regulation 23.202. Regulation 1.35(a), as amended, states, in relevant part, that each member of a DCM or SEF “shall keep full, complete, and systematic records, which include all pertinent data and memoranda, of all transactions relating to its business of dealing in commodity interests