US CFTC Issues Exemptive Relief on Recordkeeping for CTAs; Prompt Action May Be Required

Published: 26 April 2017

The Division of Swap Dealer and Intermediary Oversight (‘Division’) of the Commodity Futures Trading Commission (‘CFTC’) has published a letter providing exemptive relief to commodity trading advisors (‘CTAs’) from CFTC Regulations 4.33 and 4.7(c)(2) which require all CTAs to make, keep, and produce upon request by the CFTC, certain records regarding their clients and subscribers, as well as the CTA itself and to keep those records at its main business office (‘Main Business Office Requirement’).  This relief from the Main Business Office Requirement requires that the CTA to file a notice by email to the Division at the time it (i) registers with the CFTC, (ii) delegates its recordkeeping obligations, or (iii) 30 June 2017, whichever is later.  So, for existing registrants with existing delegations, there is a limited window during which to claim this relief. CTA’s claiming this exemptive relief will remain subject to a number of conditions including, among other things, remaining liable for the fulfilment of its recordkeeping obligations under the CFTC regulations. If the delegate fails to properly keep the books and records as required and the CTA is unable to produce them in the relevant time period, the failure will be considered that of the CTA and the CTA may be subject to an enforcement action.  Please contact Jennifer Wood if you have any questions regarding this relief.