FIA wrote to the CFTC requesting interpretative guidance or no-action relief for market participants in complying with certain position aggregation requirements.
A requirement that all market participants must file a notice before relying upon an exemption would result in thousands of filings from all types of market participants that in most cases will not be relevant to the CFTC’s position limits monitoring program. Instead, FIA supports relief that would clarify that market participants may comply by filing a notice within five days after being contacted by CFTC or exchange staff. This process would enable the CFTC to focus on information that is specifically relevant to the accounts or positions that prompted the CFTC’s need to review the accounts or positions for compliance with an applicable limit. This process would be significantly more efficient and less burdensome for regulatory staff and market participants alike.
10 August 2017 Update:
The CFTC has granted no-action relief to market participants in complying with certain position aggregation requirements. Under the terms of this relief, which will last for two years, DMO will not recommend that the CFTC take enforcement action for a market participant’s failure to comply with certain position aggregation requirements under CFTC Regulation 150.4, provided that the market participant complies with the terms of the relief.
The CFTC noted that the relief was granted in response to requests from several industry groups, including FIA. For example, the relief streamlines the requirements for filing notices regarding exemptions from aggregation. The CFTC said this will "reduce burdens on market participants" and provide more clarity on the requirements, as requested by the industry groups.
The relief also revises the definitional conditions for eligible entities, independent account controllers and commodity trading advisors. Thirdly, the relief limits the aggregation requirements for the “substantially identical trading strategies” rule to circumstances where the positions in more than one account or pool are held in order to willfully attempt to circumvent applicable position limits.