CFTC Staff Letter 15-27: Interpretation of Section 2(h)(7)(C)(iii) of the Commodity Exchange Act

U.S. COMMODITY FUTURES TRADING COMMISSION
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Division of Clearing and
Risk
CFTC Letter No. 15-27
Interpretation
May 4, 2015
Division of Clearing and Risk
Executive Vice President, Chief Financial Officer, and Treasurer Ford Motor Credit Company LLC 1 American Road Dearborn, MI 48126-2701 Re: Interpretation of Section 2(h)(7)(C)(iii) of the Commodity Exchange Act – Captive Finance Companies Dear Mr. Seneski:
This is in response to your letter dated November 24, 2014. Your letter requests that the Division of Clearing and Risk (“Division”) of the Commodity Futures Trading Commission (“Commission”) interpret Section 2(h)(7)(C)(iii) of the Commodity Exchange Act (“CEA”) to clarify that a securitization special purpose vehicle (“SPV”) that is wholly-owned by, and consolidated with, an entity described in Section 2(h)(7)(C)(iii) of the CEA (“Captive Finance Company”) qualifies as a Captive Finance Company and, therefore, is eligible to elect an exception from a clearing requirement determination issued by the Commission under Section 2(h) of the CEA. 1 The Division agrees with this interpretation for the reasons set forth below. Statement of Facts Ford Motor Credit Company LLC (“Ford Credit”) is a wholly-owned subsidiary of Ford Motor Company (“Ford”) and provides financing that supports the sale and leasing of cars and trucks produced by Ford. Ford Credit’s securitization SPVs are wholly-owned by Ford Credit. As consolidated subsidiaries of Ford Credit, the financial performance of the SPVs is included in