The CFTC Market Participants Division ("MPD") and Division of Market Oversight ("DMO") extended through September 30, 2021, COVID-19 related no-action relief to floor brokers ("FB") from location, registration and real-time market monitoring requirements. The relief was granted in response to a request from CME Group Inc., ICE Futures U.S. and the Minneapolis Grain Exchange, LLC.
CFTC Letter 21-10 extends aspects of the relief originally provided under CFTC Letters 20-04 and 20-09, and subsequently extended by CFTC Letters 21-05, 20-19 and 20-26, to address noncompliance related to the displacement of FBs from trading floors.
MPD stated it will not - subject to conditions set forth in the letters - recommend enforcement action against any FB for failure to comply with:
- introducing broker registration, and
- the location requirement pursuant to the definition of "floor broker" under CFTC Rule 1.3 ("Definitions").
DMO stated it will not - subject to conditions set forth in the letters - recommend enforcement action against any FB for failure to comply with:
- the real-time market monitoring requirements pursuant to CEA Section 5(d)(4) and CFTC Rules 38.250 ("Core Principle 4"), 38.251 ("General Requirements"), 38.252 ("Additional Requirements for Physical-Delivery Contracts") and 38.253 ("Additional Requirements for Cash-Settled Contracts").
DMO specified that noncompliance with the above-mentioned rules must relate to the displacement of FBs from "any pit, ring, post or other place provided by a contract market" pursuant to the definition of "floor broker" under CFTC Rule 1.3.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
