CFTC Staff Letter 20-16 No-Action: Temporary Relief from Fingerprinting Requirements for Principals and Associated Persons

CFTC Letter No. 20-16 No-Action April 24, 2020

Division of Swap Dealer and Joshua B. Sterling Intermediary Oversight Director Re: No-Action Position in Response to the COVID-19 Pandemic for Persons Required to Submit Fingerprints in Connection with Applying for Registration as an Associated Person or Being Listed as a Principal of a Registrant Ladies and Gentlemen:
This letter is in response to a letter dated April 13, 2020 received by the Division of Swap Dealer and Intermediary Oversight (“DSIO”) of the Commodity Futures Trading Commission (“CFTC” or “Commission”) from the National Futures Association (“NFA”). In its letter, NFA advised that, due to concerns about the spread of the corona virus disease 2019 (“COVID-19”), it has suspended its applicant fingerprinting service, and that this fact (combined with the measures taken by federal, state and local governments to restrict movement of, and contact among, individuals) has made it difficult for registrants and their principals and associated persons (“APs”) to comply with certain requirements in Commission Regulations 3.10 and 3.12.1 Regulation 3.10(a)(2) requires each applicant for registration as a futures commission merchant, retail foreign exchange dealer, swap dealer, major swap participant, introducing broker, commodity pool operator, commodity trading advisor, or leverage transaction merchant to accompany its registration application with a Form 8-R for each natural person listed as a principal of the applicant, along with the fingerprints of the natural person on a fingerprint card provided by NFA. Regulation 3.12(c)(3) requires each person applying for registration as an AP to accompany his or her Form 8-R with the applicant’s fingerprints on a fingerprint card provided by NFA. NFA sends digital images of the fingerprints of each such individual to the Federal Bureau of Investigation in order to determine whether the individual has a criminal record. Firm and associated person registrations are not granted until the required fingerprint cards are submitted and processed. In Staff Letter 12-49, DSIO took a no-action position permitting the use of an alternative means for establishing fitness of principals residing outside the United States, where privacy laws and the absence of a uniform fingerprint repository make the fingerprint process used in the