The Division of Market Oversight (DMO) is issuing a no-action letter that provides additional time for reporting parties to comply with certain reporting requirements of the ownership and control final rule, which was...

Summary: The Division of Market Oversight (DMO) is issuing a no-action letter that provides additional time for reporting parties to comply with certain reporting requirements of the ownership and control final rule, which was published in the Federal Register on November 18, 2013.

U.S. COMMODITY FUTURES TRADING COMMISSION

Three Lafayette Centre

Division of

Market Oversight

CFTC Letter No. 14-95

No-Action

July 23, 2014

Division ofMarket Oversight

1155 21st Street, NW

Washington, DC 20581

Telephone: (202) 418-5000

Facsimile: (202) 418-5521

Conditional Time-Limited No-Action Relief from

Certain Ownership and Control (OCR) Data Reporting Requirements

Under Parts 17, 18 and 20 of the Commission's Regulations

July 23, 2014

Walt L. Luldcen

President and ChiefExecutive Officer

The Futures Industry Association

2001 Pennsylvania Avenue NW

Suite 600

Washington, DC 20006

Dear Mr. Luldcen:

This letter is in response to your request dated June 6, 2014 (the "PIA Letter"), to the Division of

Market Oversight ("DMO" or "Division") of the Commodity Futures Trading Commission

("Commission"), on behalf of the members of the Futures Industry Association ("PIA") that are

required to submit reports under Pmis 15, 17, 18 and 20 of the Commission's regulations. In the

PIA Letter, you requested no-action relief from certain data reporting requirements of Pmis 17,

18 and 20 of the Commission's regulations that were implemented pursuant to the OCR Final

Rule (as defined in section B below). In the PIA Letter, you assert that the industry needs

sufficient time to build and test systems in keeping with industry standard technology risk

management practices for purposes of complying with the electronic repotiing requirements of

the OCR Final Rule. You also assert that, in addition to the technical development necessitated

by the OCR Final Rule, the industry needs more time to educate clients globally and collect the

new data required for OCR reporting

to build and test systems in keeping with industry standard technology risk

management practices for purposes of complying with the electronic repotiing requirements of

the OCR Final Rule. You also assert that, in addition to the technical development necessitated

by the OCR Final Rule, the industry needs more time to educate clients globally and collect the

new data required for OCR reporting. You request relief for repotiing entities from: (i)

submitting automated forms 102A and 102S until February 11, 2015; (ii) submitting automated

form 102B until March 11, 2015; and (iii) submitting automated forms 40 and 71, which are sent

by the Commission in its discretion via special call, until February 11, 2016.

A. Summary of Relief Granted

The Division believes that the following time-limited no-action relief is warranted:

•

Relief from electronically reporting via New Form 102A and New Form 10281 until

February 11, 2015;

•

Relief from electronically reporting via New Form 102B until March 11, 2015; and

•

Relief from electronically reporting via New Form 40/408 and New Form 71 until

February 11, 2016.

The no-action relief described in this no-action letter may be relied upon by all parties that are

obligated to report pursuant to the OCR Final Rule on any ofNew Form 102A, New Form 102B,

New Form 102S, New Form 40/40S and New Form 71 (collectively, "Repmiing Parties").

As further described below, among other conditions, the no-action relief described above is

subject to Repmiing Pmiies reporting to the Commission via Legacy Form 102, the Legacy 102S

Filing, Legacy Form 40 and the Legacy 40S Filing in accordance with the repmiing requirements

in place prior to the implementation of the OCR Final Rule, until the applicable transition dates

specified below, or such earlier date that the Division may determine

s, the no-action relief described above is

subject to Repmiing Pmiies reporting to the Commission via Legacy Form 102, the Legacy 102S

Filing, Legacy Form 40 and the Legacy 40S Filing in accordance with the repmiing requirements

in place prior to the implementation of the OCR Final Rule, until the applicable transition dates

specified below, or such earlier date that the Division may determine.

Notwithstanding the no-action relief provided herein, the compliance date for the additional

recordkeeping obligations imposed by§ 18.05, as amended by the OCR Final Rule, remains

August 15, 2014, the compliance date set forth in the OCR Final Rule.

B. Background; OCR Final Rule

On November 18, 2013, the Commission adopted new rules and related forms to enhance its

identification of futures and swap market patiicipants (the "OCR Final Rule")? The OCR Final

Rule expands upon the Commission's pre-existing position and transaction repmiing programs

by requiring the electronic submission of trader identification and market pmiicipant data on

updated Form 102 ("New Form 102") and Form 40 ("New Form 40"), and on entirely new Form

71 ("New Form 71 "). New Form 102 is subdivided into three parts ("New Form 102A," "New

Form 1 02B," and "New Form 1 02S"). New Form 1 02B is an entirely new form, introduced by

the OCR Final Rule. Among other fields, the new and updated forms require the reporting of the

following information:

•

New Form 102A: a position-based repmiing form, which requires the repmiing of both

special accounts and the trading accounts that comprise special accounts.

•

New Form 1 02B: requires the repmiing of trading accounts that exceed a stated volume

threshold during a single trading day ("volume threshold accounts"), regardless of

whether these positions remain open at the end of the day.

1 See the discussion below for the definition of capitalized terms used in this section A, and additional

terms and conditions regarding the no-action relief summarized in section A

B: requires the repmiing of trading accounts that exceed a stated volume

threshold during a single trading day ("volume threshold accounts"), regardless of

whether these positions remain open at the end of the day.

1 See the discussion below for the definition of capitalized terms used in this section A, and additional

terms and conditions regarding the no-action relief summarized in section A.

2 Commission, Ownership and Control Reports, Forms 102/102S, 40/40S, and 71; Final Rule, 78 FR

69178 (November 18, 2013). Terms not otherwise defined in this no-action letter shall have the meaning

assigned to them in the OCR Final Rule or in the Commission's regulations.

2

•

New Form 1 02S: facilitates the electronic submission of 1 02S filings, and requires

position-based repmiing of consolidated accounts in the swaps market.

•

New Form 40/40S: sent by the Commission to reporting traders via special call to collect

identifying information regarding traders.

•

New Form 71: sent by the Commission via special call to collect additional information

on omnibus volume threshold accounts identified on New Form 102B.

The OCR Final Rule also amends§ 18.05 to impose additional recordkeeping obligations upon

certain categories of persons required by the rule to submit data to the Commission.

As discussed in the OCR Final Rule, the Commission is developing both a web-based pmial and

a secure FTP transmission through which Repmiing Parties will submit and update their

reporting forms. The OCR Final Rule provides that Repmiing Patiies may submit the required

information through either electronic submission method. The compliance date of the OCR

Final Rule is August 15, 2014.

C. Summary of FIA Letter

In the PIA Letter, you represented that the tasks required to build a secure, efficient and reliable

technology infrastructure to house and deliver the data required by the OCR Final Rule include:

rovides that Repmiing Patiies may submit the required

information through either electronic submission method. The compliance date of the OCR

Final Rule is August 15, 2014.

C. Summary of FIA Letter

In the PIA Letter, you represented that the tasks required to build a secure, efficient and reliable

technology infrastructure to house and deliver the data required by the OCR Final Rule include:

(1) Building a database to house the customer infmmation that resides in various systems

within the firm as well as data that has never before been collected;

(2) Expanding the data collection to include an entirely new class of repmiable accounts

triggered by a volume threshold;

(3) Designing trigger files that determine when accounts are repmiable;

(4) Designing systems that detect change updates and report them to the Commission;

(5) Designing systems that detect annual refresh dates and prompt clients to review the data;

(6) Designing a secure system to protect highly confidential data petiaining to clients and

natural persons; and

(7) Changing internal processes in order to meet the deadlines included in the OCR Final

Rule.

You stated in the PIA Letter that the requested compliance dates of February 2015 and February

2016 will also respect the annual technology freeze scheduled by fitms at the end of the year that

extends (on a firm-by-firm basis) from early November until mid-to-late January.

You fmiher represented in the PIA Letter that the industry needs more time to educate clients of

PIA member firms with repmiing obligations globally and collect the new data required for OCR

reporting. You represented that questions raised by client representatives over the past several

months indicate that the client community is not ready to supply information regarding account

ownership and control that must be repmied pursuant to the OCR Final Rule.

3

more time to educate clients of

PIA member firms with repmiing obligations globally and collect the new data required for OCR

reporting. You represented that questions raised by client representatives over the past several

months indicate that the client community is not ready to supply information regarding account

ownership and control that must be repmied pursuant to the OCR Final Rule.

3

D. Conditional No-action Relief from Submitting Information via New Form 102A and

New Form 102S Until11:59 p.m. Eastern Time on February 11,2015

Summary o[Relie[Granted: The Division is providing relieffi'om electronically reporting via

New Formi02A and New Form I02S until11:59 p.m. eastern time on Februmy 11, 20I5,

provided that Reporting Parties comply with the reporting practice that was in place prior to the

implementation of the OCR Final Rule, by reporting via Legacy Form I 02 and the Legacy I 02S

Filing (as such terms are defined belm1) until11:59 p.m. eastern time on Februmy 11, 20I5, or

such earlier date that the Division may determine.

The Division believes that time-limited no-action relief is warranted for certain repmiing

obligations under Pmis 17 and 20 of the Commission's regulations that were implemented by the

OCR Final Rule. Subject to the conditions below, the Division will not recommend that the

Commissi~m commence an enforcement action against a Repmiing Party for failure to repmi via

New Form 102A or New Form 102S, as required by Pmis 17 and 20, until11:59 p.m. eastern

time on February 11, 2015?

The no-action relief described in this section Dis subject to Repmiing Pmiies reporting via

Legacy Form 102 and the Legacy 102S Filing until11:59 p.m. eastern time on February 11,

2015, or such earlier date that the Division may determine. Such repmiing must be consistent in

all respects with the time, form and manner of the Legacy Form 102 repmiing practice and the

Legacy 1 02S reporting practice

no-action relief described in this section Dis subject to Repmiing Pmiies reporting via

Legacy Form 102 and the Legacy 102S Filing until11:59 p.m. eastern time on February 11,

2015, or such earlier date that the Division may determine. Such repmiing must be consistent in

all respects with the time, form and manner of the Legacy Form 102 repmiing practice and the

Legacy 1 02S reporting practice. In pmiicular, the no-action relief described in this section D is

subject to Repmiing Pmiies reporting via Legacy Form 102 and the Legacy 102S Filing in

accordance with the following conditions:4

•

Report via Legacy Form 1 02

o As used herein, "Legacy Form 102" refers to the Form 102 required prior to the

implementation of the OCR Final Rule, which is available on the Commission's

website. 5 See Appendix A hereto for additional instructions for completing

Legacy Form 102 in accordance with the legacy repmiing practice.

o Within three business days of the first day that a special account is reported to the

Commission pursuant to§ 17.00(a) by a futures commission merchant, clearing

member, or foreign broker, in accordance with instructions by the Commission or

its designee, such pmiy must submit Legacy Form 102 to the Commission in

3 The reporting requirements with respect to New Form 1 02A and New Form 1 02S were implemented by

theOCRFinalRule,andariseunder: §§ 17.01(a), 17.01(d), 17.01(e)and 17.02(b)(NewForm 102A);and

20.5(a)(l), 20.5(a)(2), 20.5(a)(4) and 20.5(a)(5) (New Form 102S).

4 When submitting either Legacy Form 102 or New Form 102A, Reporting Parties should report special

accounts pursuant to § 17.00 and on the applicable 102 form on a disaggregated basis, if the parties have

been so instructed by the Commission or its designee. All Reporting Parties should provide position

reporting on the applicable 102 form based on control of a special account

(New Form 102S).

4 When submitting either Legacy Form 102 or New Form 102A, Reporting Parties should report special

accounts pursuant to § 17.00 and on the applicable 102 form on a disaggregated basis, if the parties have

been so instructed by the Commission or its designee. All Reporting Parties should provide position

reporting on the applicable 102 form based on control of a special account. As an example, if a special

account is controlled by one Reporting Party but owned by another, such account should be repotied only

by the Reporting Patty that controls the special account. See OCR Final Rule at 69184 for fmiher details.

5 See the link below to the Commission's website for a copy of Legacy Form 102:

http:/ /www.cftc.gov/Forms/ssLINK/cftcform I 02

4

accordance with instructions by the Commission or its designee, showing the

information in paragraphs (a) through (f) of Appendix A hereto.

o

On call by the Commission or its designee, a futures commission merchant,

clearing member, or foreign broker must identify the type of special account

specified by items 1(a), 1(b), or 1(c) of Legacy Form 102, and the name and

location ofthe person to be identified in item 1(d) on Legacy Form 102, and

submit such information by facsimile or telephone, in accordance with

instructions by the Commission or its designee, on the same day that the special

account in question is first repmied to the Commission by such party.

o

Legacy Form 102 updates. If, at the time an account is in special account status

and a Legacy Form 102 filed by a futures commission merchant, clearing

member, or foreign broker is then no longer accurate because there has been a

change in the information required under paragraph (b) of Appendix A to this no-

action letter since the previous filing, the futures commission merchant, clearing

member, or foreign broker must file an updated Legacy Form 102 with the

Commission within three business days after such change occurs.

o

Exclusively self-cleared contracts

broker is then no longer accurate because there has been a

change in the information required under paragraph (b) of Appendix A to this no-

action letter since the previous filing, the futures commission merchant, clearing

member, or foreign broker must file an updated Legacy Form 102 with the

Commission within three business days after such change occurs.

o

Exclusively self-cleared contracts. Unless determined otherwise by the

Commission, repmiing markets that list exclusively self-cleared contracts must

submit and update Legacy Form 102, as the requirement to submit and update

Legacy Form 102 applies to trading in such contracts by all clearing members, on

behalf of all clearing members.

o

The Legacy Form 102 repmiing practice described above and on Appendix A is

refened to herein as the "Legacy Form 102 repmiing practice."

•

Report via Legacy 102S Filings

o

Within three days following the first day that a counterpatiy consolidated account

first becomes reportable, or at such time as instructed by the Commission upon

special call, a repmiing entity6 must submit a 1 02S filing, which must consist of

the name, address, and contact information of the counterparty and a brief

description of the nature of such person's paired swaps and swaptions market

activity (the "Legacy 1 02S Filing"). 7

o A reporting entity may submit a Legacy 1 02S Filing only once for each

counterpatiy, even if such persons at various times have multiple repmiable

positions in the same or different paired swaps or swaptions. However, reporting

entities must update a Legacy 1 02S Filing if the information provided is no longer

accurate

ired swaps and swaptions market

activity (the "Legacy 1 02S Filing"). 7

o A reporting entity may submit a Legacy 1 02S Filing only once for each

counterpatiy, even if such persons at various times have multiple repmiable

positions in the same or different paired swaps or swaptions. However, reporting

entities must update a Legacy 1 02S Filing if the information provided is no longer

accurate.

o

The 1 02S reporting practice described above is referred to herein as the "Legacy

1 02S reporting practice."

6 See § 20.1 of the Commission's regulations for the definition of"reporting entity."

7 Patiies should submit a Legacy 1 02S Filing in accordance with the specifications set fmth in the Large

Trader Repmting for Physical Commodity Swaps: Division of Market Oversight Guidebook for Pmt 20

Repmts (as amended from time to time, the "102S Guidebook"). The current version ofthe 102S

Guidebook is available at the link below:

http://www .cft:c.gov/ucm/ groups/pub lic/@newsroom/documents/tlle/ltrguidebook053112.pdf

5

The no-action relief described in this section Dis also subject to the following condition:

o

Rep01iing Pmiies Shall Cooperate with Staff of the Commission's Office of Data and

Technology ("ODT") to Test and Implement Electronic Rep01iing Methods

o Prior to the implementation of electronic rep01iing via New Form 102A and New

Form 102S on February 11, 2015, Rep01iing Pmiies must cooperate with ODT

staff as requested to test and implement any information technology standards or

systems associated with the OCR Final Rule. During this testing period,

Reporting Pmiies must provide all test data or form filings requested by ODT

staff, in the form and manner requested by staff. 8 Rep01iing Pmiies must also

provide statt;s reports on their implementation efforts upon request by ODT.

E. Conditional No-action Relief from Submitting Information via New Form 102B

Until11:59 p.m

stems associated with the OCR Final Rule. During this testing period,

Reporting Pmiies must provide all test data or form filings requested by ODT

staff, in the form and manner requested by staff. 8 Rep01iing Pmiies must also

provide statt;s reports on their implementation efforts upon request by ODT.

E. Conditional No-action Relief from Submitting Information via New Form 102B

Until11:59 p.m. Eastern Time on March 11,2015

Summan1 o[Relie[Granted: The Division is providing relieffi'om electronically reporting via

Ne1-v Form 102B until11:59 p.m. eastern time on March 11, 2015, provided that Reporting

Parties comply with the reporting practice that was in place prior to the implementation of the

OCR Final Rule, by reporting via Legacy Form 102 and the Legacy 1 02S Filing until11 :59 p.m.

eastern time on February 11, 2015, or such earlier date that the Division may determine. 9

The Division believes that time-limited no-action relief is wan·anted for certain rep01iing

obligations under Part 17 of the Commission's regulations that were implemented by the OCR

Final Rule. Subject to the conditions in section D above and the condition below, the Division

will not recommend that the Commission commence an enforcement action against a Reporting

Pmiy for failure to rep01i via New Form 102B, as required by Part 17, unti111:59 p.m. eastern

time on March 11, 2015. 10

•

Reporting Pmiies Shall Cooperate with ODT Staff to Test and Implement Electronic

Reporting Methods

8 The Commission will protect proprietaty information consistent with the Freedom of Information Act, 5

U.S.C

Commission commence an enforcement action against a Reporting

Pmiy for failure to rep01i via New Form 102B, as required by Part 17, unti111:59 p.m. eastern

time on March 11, 2015. 10

•

Reporting Pmiies Shall Cooperate with ODT Staff to Test and Implement Electronic

Reporting Methods

8 The Commission will protect proprietaty information consistent with the Freedom of Information Act, 5

U.S.C. 552, and 17 CPR part 145, "Commission Records and Information." In addition,§ 8(a)(l) of the

Commodity Exchange Act (the "Act") strictly prohibits the Commission, unless specifically authorized

by the Act, from making public "data and information that would separately disclose the business

transactions or market positions of any person and trade secrets or names of customers." The

Commission is also required to protect cetiain information contained in a government system of records

according to the Privacy Act of 1974, 5 U.S.C. 552a.

9 As noted in section D above, the transition from Legacy Form 102 and the Legacy Form 102S filing to

New Form 102A and New Form 102S will occur at 11:59 p.m. eastern time on February 11, 2015, or such

earlier date that the Division may determine ..

10 The reporting requirements with respect to New Form 102B were implemented by the OCR Final Rule,

and arise under§§ 17.01(b ), 17.01(d), 17.0l(e) and 17.02( c). As noted above, New Form 102B is an

entirely new form introduced by the OCR Final Rule, and as a result there is no legacy Form 1 02B

reporting method.

6

n February 11, 2015, or such

earlier date that the Division may determine ..

10 The reporting requirements with respect to New Form 102B were implemented by the OCR Final Rule,

and arise under§§ 17.01(b ), 17.01(d), 17.0l(e) and 17.02( c). As noted above, New Form 102B is an

entirely new form introduced by the OCR Final Rule, and as a result there is no legacy Form 1 02B

reporting method.

6

o Prior to the implementation of electronic repmiing via New F mm 1 02B on March

11, 2015, Reporting Patiies must cooperate with ODT staff as requested to test

and implement any information technology standards or systems associated with

the OCR Final Rule. During this testing period, Repmiing Patiies must provide

all test data or form filings requested by ODT staff, in the form and manner

requested by staff. Repmiing Patiies must also provide status repmis on their

implementation effmis upon request by ODT.

F. Conditional No-action Relief from Submitting Information via New Form 40/408

and New Form 71 Until11:59 p.m. Eastern Time on February 11, 2016

Summary o[Relie(Granted: The Division is providing relieffi·om electronically reporting via

New Form 40/40S and New Form 71 until11:59 p.m. eastern time on February 11, 2016,

provided that Reporting Parties comply with the Form 40/40S reporting practice that was in

place prior to the implementation of the OCR Final Rule, by reporting via Legacy Form 40 and

the Legacy 40S Filing (as such terms are defined below) until11:59 p.m. eastern time on

February 11, 2016, or such earlier date that the Division may determine.

In addition, the Division believes that time-limited no-action relief is warranted for ce1iain

additional reporting obligations under Parts 17 and 18 of the Commission's regulations that were

implemented by the OCR Final Rule. Subject to the condition below, the Division will not

recommend that the Commission commence an enforcement action against a Repmiing Trader11

for failure to repoti via New Form 40, as required by Pati 18

that time-limited no-action relief is warranted for ce1iain

additional reporting obligations under Parts 17 and 18 of the Commission's regulations that were

implemented by the OCR Final Rule. Subject to the condition below, the Division will not

recommend that the Commission commence an enforcement action against a Repmiing Trader11

for failure to repoti via New Form 40, as required by Pati 18. In addition, the Division will not

recommend that the Commission commence an enforcement action against a Repmiing Party for

failure to report via New Form 71, as required by Pati 17.12 The no-action relief with respect to

New Form 40 and New Form 71 described in this paragraph ends in each case at 11:59 p.m.

eastern time on February 11, 2016.

The no-action relief described above with respect to New Fmm 40 is subject to Repmiing

Traders reporting via Legacy Form 40 until11 :59 p.m. eastern time on February 11,2016, or

such earlier date that the Division may determine. Such repmiing must be consistent in all

respects with the time, form and manner of the Legacy Form 40 repmiing practice. In patiicular,

this no-action relief is subject to Repmiing Traders repmiing via Legacy Form 40 in accordance

with the following condition:

•

Report via Legacy Form 40

o As used herein, "Legacy Form 40" refers to the Form 40 required prior to the

implementation of the OCR Final Rule, which is available on the Commission's

11 As used herein, "Reporting Traders" means patiies that are obligated to report pursuant to the OCR

Final Rule on New Form 40/40S.

12 The reporting requirements with respect to New Form 40 and New Form 71 were implemented by the

OCR Final Rule, and arise under§§ 18.04 (New Form 40), and 17.01(c) and 17.01(e) (New Form 71). As

noted above, New Form 71 is an entirely new form introduced by the OCR Final Rule, and as a result

there is no legacy Form 71 reporting method.

7

pursuant to the OCR

Final Rule on New Form 40/40S.

12 The reporting requirements with respect to New Form 40 and New Form 71 were implemented by the

OCR Final Rule, and arise under§§ 18.04 (New Form 40), and 17.01(c) and 17.01(e) (New Form 71). As

noted above, New Form 71 is an entirely new form introduced by the OCR Final Rule, and as a result

there is no legacy Form 71 reporting method.

7

website. 13 See Appendix B hereto for additional instructions for completing

Legacy Form 40 in accordance with the legacy reporting practice.

o Every trader who holds or controls a reportable futures and option position must,

after a special call upon such trader by the Commission or its designee, file with

the Commission a "Statement ofRepmiing Trader" on Legacy Form 40, at such

time and place as directed in the call.

o The Legacy Form 40 reporting practice described above and on Appendix B is

referred to herein as the "Legacy Form 40 repmiing practice."

The no-action relief described in this section F is also subject to the following condition:

•

Repmiing Parties Shall Cooperate with ODT Staff to Test and Implement Electronic

Reporting Methods

o Prior to the implementation of electronic reporting via New Form 40 and New

Form 71 on February 11, 2016, Repmiing Patiies must cooperate with ODT staff

as requested to test and implement any information technology standards or

systems associated with the OCR Final Rule. During this testing period,

Repmiing Parties must provide all test data or form filings requested by ODT

staff, in the fmm and manner requested by staff. Repmiing Parties must also

provide status reports on their implementation efforts upon request by ODT.

For the avoidance of doubt, the no-action relief and conditions described in this section F with

respect to New Form 40 also apply to the obligation to submit New Form 40S pursuant to §

20.5(b)

de all test data or form filings requested by ODT

staff, in the fmm and manner requested by staff. Repmiing Parties must also

provide status reports on their implementation efforts upon request by ODT.

For the avoidance of doubt, the no-action relief and conditions described in this section F with

respect to New Form 40 also apply to the obligation to submit New Form 40S pursuant to §

20.5(b). As a result, all references in this section F to New Form 40 and Legacy Form 40,

including the no-action relief and conditions described in this section F, shall apply equally to

New Form 40S and the legacy 40S filing (the "Legacy 40S Filing") required by§ 20.5(b). The

repmiing practice by which patiies submit the Legacy 40S Filing in accordance with § 20.5(b) is

referred to herein as the "Legacy 40S repmiing practice."

G. Compliance Date for Additional Recordkeeping Obligations Imposed by Amended

§ 18.05 Remains August 15, 2014

The compliance date for the additional recordkeeping obligations imposed by§ 18.05, as

amended by the OCR Final Rule, remains August 15, 2014, the compliance date set forth in the

OCR Final Rule. Amended§ 18.05 imposes additional recordkeeping obligations upon four new

categories of market participants: (1) owners of volume threshold accounts reported on New

Form 102B; (2) controllers of volume threshold accounts reported on New Form 102B; (3)

owners ofrepmiable sub-accounts reported on New Form 71; and (4) controllers ofrepmiable

sub-accounts reported on New Form 71.

H. Conclusion

The no-action relief provided in this no-action letter is time-limited, and ends in all respects as

follows:

13 See the link below to the Commission's website for a copy of Legacy Form 40:

http://www.cftc.gov/Forms/ssLINK/cftcform40

8

Form 102B; (3)

owners ofrepmiable sub-accounts reported on New Form 71; and (4) controllers ofrepmiable

sub-accounts reported on New Form 71.

H. Conclusion

The no-action relief provided in this no-action letter is time-limited, and ends in all respects as

follows:

13 See the link below to the Commission's website for a copy of Legacy Form 40:

http://www.cftc.gov/Forms/ssLINK/cftcform40

8

e

The no-action relief provided in section D of this no-action letter ends at 11:59 p.m.

eastern time on February 11, 2015;

•

The no-action relief provided in section E of this no-action letter ends at 11:59 p.m.

eastern time on March 11, 2015; and

•

The no-action relief provided in section F of this no-action letter ends at 11:59 p.m.

eastern time on February 11, 2016.

9

This letter, and the no-action position taken herein, which is based on your representations,

represents the views of the Division only, and does not necessarily represent the position or

views ofthe Commission or of any other division or office ofthe Commission's staff. The no-

action position taken herein does not excuse affected persons from compliance with any other

applicable requirements of the Commodity Exchange Act or the regulations thereunder. As with

all no-action letters, the Division retains the authority to, in its discretion, further condition,

modify, suspend, terminate or otherwise restrict the terms of the no-action relief provided herein.

If you have any questions concerning this correspondence, please contact Sebastian Pujol Schott,

Associate Director, DMO, at (202) 418-5641, or Mark Schlegel, Special Counsel, DMO, at (202)

418-5055.

Sincerely yours,

Vincent McGonagle

Director

Division of Market Oversight

10

her condition,

modify, suspend, terminate or otherwise restrict the terms of the no-action relief provided herein.

If you have any questions concerning this correspondence, please contact Sebastian Pujol Schott,

Associate Director, DMO, at (202) 418-5641, or Mark Schlegel, Special Counsel, DMO, at (202)

418-5055.

Sincerely yours,

Vincent McGonagle

Director

Division of Market Oversight

10

Appendix A 14

Detailed Instructions on Submitting Legacy Form 10215

Special account designation and identification.

When a special account is reported for the first time, the futures commission merchant, clearing

member, or foreign broker shall identify the account to the Commission on Legacy Form 102, in

the form and manner specified in section D of this no-action letter, showing the information in

paragraphs (a) through (f) of this Appendix A.

(a) Special account designator. A unique identifier for the account, provided, that the same

designator is assigned for option and futures reporting, and the designator is not changed or

assigned to another account without prior approval of the Commission or its designee.

(b) Special account identification. The name, address, business phone, and for individuals, the

person's job title and employer for the following:

(1) The person originating the account, if the special account is a house omnibus or customer

omnibus account; or

(2) The person (i.e., individual, corporation, partnership, etc.) who owns the special account, if

such person (or an employee or officer) also controls the trading of the special account. And, in

addition:

for individuals, the

person's job title and employer for the following:

(1) The person originating the account, if the special account is a house omnibus or customer

omnibus account; or

(2) The person (i.e., individual, corporation, partnership, etc.) who owns the special account, if

such person (or an employee or officer) also controls the trading of the special account. And, in

addition:

(i) The registration status of the person as a commodity trading advisor or a securities

investment advisor;

(ii) The legal organization of the person and the person's principal business or occupation;

(iii) Account numbers and account names included in the special account, if different than

supplied in paragraph (b)(2) of this Appendix A;

(iv) The name and location of all persons not identified in paragraph (b)(2) of this Appendix A

having a ten percent or more financial interest in the special account, indicating those having

discretionary trading over the account; and

(v) For special accounts with five or fewer persons having trading authority, the names and

locations of all persons with trading authority that have not been identified in paragraphs (b )(2)

or (b)(2)(iv) ofthis Appendix A; or

(3) The account controller, if trading of the special account is controlled by a person or legal

entity who is an independent account controller for the account owners as defined in § 150.1 (e)

of the Commission's regulations. And, in addition:

the names and

locations of all persons with trading authority that have not been identified in paragraphs (b )(2)

or (b)(2)(iv) ofthis Appendix A; or

(3) The account controller, if trading of the special account is controlled by a person or legal

entity who is an independent account controller for the account owners as defined in § 150.1 (e)

of the Commission's regulations. And, in addition:

(i) The registration status of the person as a commodity trading advisor or a securities

investment advisor;

(ii) [Reserved]

(iii) If fewer than ten accounts are under control of the independent advisor, for each account

the account number and the name and location of each person having a ten percent or more

financial interest in the account; and

14 See the link below to the Commission's website for general information on submitting forms to the

Commission:

http://www.cftc.gov/Forms/index.htm

15 See the link below to the Commission's website for a copy of Legacy Form 102:

http://www.cftc.gov/Forms/ssLINK/cftcform I 02

11

(iv) On call by the Commission or its designee, for each account controlled by the independent

advisor, the account number and account name and the name and location of each person having

a ten percent or more financial interest in the account.

(c) [Reserved]

(d) Commercial use. For futures or options, commodities in which positions or transactions in

the account are associated with a commercial activity of the account owner in a related cash

commodity or activity (i.e., those considered as hedging, risk-reducing, or otherwise off-setting

with respect to the cash commodity or activity).

(e) Account executive. The name and business telephone number of the associated person of

the futures commission merchant who has solicited and is responsible for the account or, in the

case of an introduced account, the name and business telephone number of the introducing

broker who introduced the account.

-reducing, or otherwise off-setting

with respect to the cash commodity or activity).

(e) Account executive. The name and business telephone number of the associated person of

the futures commission merchant who has solicited and is responsible for the account or, in the

case of an introduced account, the name and business telephone number of the introducing

broker who introduced the account.

(f) Reporting firms. The name and address of the futures commission merchant, clearing

member, or foreign broker carrying the account, and the name, title and business phone of the

authorized representative of the firm filing the Legacy Form 102 and the date of the Legacy

Form 102. The authorized representative shall sign the Legacy Form 102 or satisfy such other

requirements for authenticating the repmi as instructed in writing by the Commission or its

designee.

12

Detailed Instructions on Submitting Legacy Form 4016

AppendixB

Every trader who holds or controls a repmiable futures and option position shall after a special

call upon such trader by the Commission or its designee file with the Commission a "Statement

ofRepmiing Trader" on the Legacy Form 40 at such time and place as directed in the call. All

traders shall complete pati A of the Legacy Form 40 and, in addition, shall complete:

Part B--Ifthe trader is an individual, a partnership or a joint tenant.

Pati C--If the trader is a corporation or type of trader other than an individual, patinership, or

joint tenant.

th the Commission a "Statement

ofRepmiing Trader" on the Legacy Form 40 at such time and place as directed in the call. All

traders shall complete pati A of the Legacy Form 40 and, in addition, shall complete:

Part B--Ifthe trader is an individual, a partnership or a joint tenant.

Pati C--If the trader is a corporation or type of trader other than an individual, patinership, or

joint tenant.

(a) Information to be furnished by all traders in pati A of the Legacy Form 40 shall include:

(1) Name and address of repmiing trader.

(2) Principal business and occupation of the reporting trader and, in addition, whether

transactions are made for, on behalf of, or in association with, a customer trading program of a

futures commission merchant, a commodity pool, a producer cooperative, any business

activities in which the trader is commercially engaged, or for personal use.

(3) Type oftrader.

(4) Registration status with the Commission, if any.

(5) The name and address of each person whose option or futures trading is controlled by the

repmiing trader. Provided that if the repmiing trader is a customer trading program, or the

commodity trading advisor thereof, that is a managed or guided account program in which

ten or more persons patiicipatc, the information furnished may be limited to the name of any

commodity pool which participates in the program and the name and address of the CPO.

( 6) The name, address and business phone of each person who controls the trading of the

reporting trader.

ding program, or the

commodity trading advisor thereof, that is a managed or guided account program in which

ten or more persons patiicipatc, the information furnished may be limited to the name of any

commodity pool which participates in the program and the name and address of the CPO.

( 6) The name, address and business phone of each person who controls the trading of the

reporting trader.

(7) The names and locations of all futures commission merchants, clearing members,

introducing brokers, and foreign brokers through whom accounts owned or controlled by the

reporting trader are carried or introduced at the time of filing a Legacy Form 40, if such accounts

are carried through more than one futures commission merchant, clearing member or foreign

broker or carried through more than one office of the same futures commission merchant,

clearing member or foreign broker, or introduced by more than one introducing broker clearing

accounts through the same futures commission merchant, and the name of the repotiing trader's

account executive at each fitm or office of the firm.

(8) The names and locations (city and state) of persons who guarantee the futures or option

trading accounts of the reporting trader or who have a financial interest of 1 0 percent or more in

the repmiing trader or the accounts of the reporting trader.

(9) The following information concerning other option or futures trading accounts which the

reporting trader guarantees or other futures or option traders or accounts in which the reporting

trader has a financial interest of 10 percent or more:

counts of the reporting trader or who have a financial interest of 1 0 percent or more in

the repmiing trader or the accounts of the reporting trader.

(9) The following information concerning other option or futures trading accounts which the

reporting trader guarantees or other futures or option traders or accounts in which the reporting

trader has a financial interest of 10 percent or more:

(i) The natnes of traders for whom the reporting trader guarantees accounts or in which the

reporting trader has a financial interest;

16 See the link below to the Commission's website for a copy of Legacy Form 40:

http://www.cftc.gov/Forms/ssLINK/cftcfonn40

13

(ii) The names of the accounts that the repmiing trader guarantees or in which the reporting

trader has a financial interest; and

(iii) The names and locations of the brokerage firms at which the accounts are carried.

(1 0) Information concerning ownership or control by a foreign government, agent of a foreign

government entity specially acknowledged by a statute or regulation of a foreign jurisdiction or

entity financed by a foreign government either through ownership of capital assets or provision

of operating expenses.

(11) Signature of the trader and date of signing the repmi. If the reporting trader is an

organization, the signature must be that of a partner, officer or trustee authorized to sign on

behalf of that organization.

(b) Information to be furnished in pati B of the Legacy Form 40 shall include:

( 1) Business telephone number of the repmiing trader.

(2) Employer and job title if the repmiing trader is an individual.

trader and date of signing the repmi. If the reporting trader is an

organization, the signature must be that of a partner, officer or trustee authorized to sign on

behalf of that organization.

(b) Information to be furnished in pati B of the Legacy Form 40 shall include:

( 1) Business telephone number of the repmiing trader.

(2) Employer and job title if the repmiing trader is an individual.

(3) The following information if a trader makes transactions or holds positions in a futures or

option contract where such transactions or positions normally represent a substitute for

transactions to be made or positions to be taken at a later time in a physical marketing

channel, and the transactions or positions are economically appropriate to the reduction of risks

in the conduct and management of a commercial enterprise:

(i) Commercial activity associated with use of the option or futures market (such as and

including production, merchandising or processing of a cash commodity, asset or liability risk

management by depository institutions, or security portfolio risk management).

(ii) Physical commodities underlying use of the futures or option markets.

(iii) Futures or option markets used.

( 4) The name, address, and type of any organization in which the repmiing trader patiicipates

in the management if such organization holds another futures or option trading account.

( 5) If the reporting trader is a partnership or joint tenant, the name and address of each patiner

(excluding limited partners in commodity pools) or joint tenant and the name of the patiner or

joint tenant who ordinarily places orders.

nd type of any organization in which the repmiing trader patiicipates

in the management if such organization holds another futures or option trading account.

( 5) If the reporting trader is a partnership or joint tenant, the name and address of each patiner

(excluding limited partners in commodity pools) or joint tenant and the name of the patiner or

joint tenant who ordinarily places orders.

(c) Information to be furnished in pati C of the Legacy Form 40 shall include:

(1) Whether or not the repotiing trader is organized under the laws of any state (including the

District of Columbia) or territory or possession of the United States or under the laws of any

foreign jurisdiction. Reporting traders organized outside the jurisdiction of the United States

must indicate the country of origin.

(2) The names of parent firms and whether or not they are organized under the laws of any

state (including the District of Columbia) or tenitory of possession of the United States and the

location of each headquatier' s office.

(3) Names and locations of all subsidiary firms that trade in commodity futures or options and

whether or not the subsidiary firms are organized under the law of any state (including the

District of Columbia) or tenitory or possession of the United States.

(4) Name, address, and business telephone number ofperson(s) actually controlling the trading

and, if different persons are responsible for different commodities or options, the commodities or

options for which each controller has responsibility.

t the subsidiary firms are organized under the law of any state (including the

District of Columbia) or tenitory or possession of the United States.

(4) Name, address, and business telephone number ofperson(s) actually controlling the trading

and, if different persons are responsible for different commodities or options, the commodities or

options for which each controller has responsibility.

(5) Name, office address and business telephone number of person or persons to contact

regarding trading.

14

( 6) The following information if a trader makes transactions or holds positions in a futures or

option contract where such transactions or positions normally represent a substitute for

transactions to be made or positions to be taken at a later time in a physical marketing channel

and the transactions or positions are economically appropriate to the reduction of risks in the

conduct and management of a commercial enterprise:

(i) Commercial activity associated with use of the option or futures market (e.g., production,

merchandising or processing of a cash commodity, asset/liability risk management by depository

institutions, security portfolio risk management, etc.)

(ii) Physical commodities underlying use of the futures or option markets.

(iii) Futures or option markets used.

15