CFTC Staff Letter 19-21 No-Action Relief for Firm A Regarding Statutory Disqualification

CFTC Letter No. 19-21 No-Action June 07, 2019

Division of Swap Dealer and Matthew B. Kulkin Intermediary Oversight Director Re: No-Action Relief from the Statutory Disqualification Condition of CFTC Staff Letter No. 12-70 regarding Affiliate Support Activities of Firm “A” Ladies and Gentlemen:
This letter is in response to your request to the Division of Swap Dealer and Intermediary Oversight (“DSIO” or the “Division”) of the U.S. Commodity Futures Trading Commission (“Commission” or “CFTC”) on behalf of Firm A for no-action relief such that, if Firm A engages in any Affiliate Support Activities (as defined below) on behalf of Affiliate “B” or Affiliate “C”, DSIO will not recommend an enforcement action against Firm A or any of its employees for failure to register as an introducing broker (“IB”) or commodity trading advisor (“CTA”) as required under section 4d(g) or 4m of the Commodity Exchange Act (“CEA”), 1 respectively, based solely on the fact that Firm A is subject to statutory disqualification under CEA section 8a(2) or 8a(3) 2 due to certain regulatory actions described below, provided that Firm A otherwise complies with the conditions set forth in CFTC Staff Letter 12-70.3
I. Statutory and Regulatory Background
Section 4d(g) of the CEA provides that it is unlawful for any person to be an IB unless
such person has registered with the Commission as an IB and such registration has not expired or been suspended or revoked. Section 1a(31) of the CEA, 4 as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank