No-action position for foreign brokers exempt pursuant to Commission regulation 30.5 to handle U.S. futures market orders in response to the COVID-19 pandemic

Summary: No-action position for foreign brokers exempt pursuant to Commission regulation 30.5 to handle U.S. futures market orders in response to the COVID-19 pandemic

CFTC Letter No. 20-12 No-Action March 31, 2020

Division of Swap Dealer and

Intermediary Oversight

Joshua B. Sterling

Director

Re:

No-Action Position for Foreign Brokers Exempt Pursuant to

Commission Regulation 30.5 to Handle U.S. Futures Market Orders in

Response to the COVID-19 Pandemic

Ladies and Gentlemen:

This letter is in response to a request received by the Division of Swap Dealer and

Intermediary Oversight (“DSIO”) of the Commodity Futures Trading Commission

(“CFTC” or “Commission”) from the Futures Industry Association (“FIA”). The FIA

request was submitted on behalf of certain entities that are exempt from registration

with the Commission as introducing brokers (“IBs”) pursuant to Commission

regulation 30.51 (“30.5 Foreign Brokers”), and which are affiliates of futures

commission merchants (“FCMs”) registered with the Commission. Specifically, FIA

seeks a time-limited no-action position that would permit certain 30.5 Foreign Brokers

to accept orders from persons located in the United States (“U.S. persons”)2 for

execution on U.S. contract markets in the event an FCM’s registered associated persons

(“APs”) are unable to handle the order flow of U.S. customers due to their absence from

normal business sites in response to the COVID-19 pandemic.

The World Health Organization declared the coronavirus disease 2019 (“COVID-19”)

outbreak a global pandemic on March 11, 2020. DSIO understands from registrants and

their representatives that the COVID-19 pandemic may present challenges in timely

meeting certain of their obligations under the Commodity Exchange Act (“CEA”) and

Commission regulations. These registrants may have significant operations in affected

areas or areas that may become affected by the COVID-19 pandemic

reak a global pandemic on March 11, 2020. DSIO understands from registrants and

their representatives that the COVID-19 pandemic may present challenges in timely

meeting certain of their obligations under the Commodity Exchange Act (“CEA”) and

Commission regulations. These registrants may have significant operations in affected

areas or areas that may become affected by the COVID-19 pandemic. Disruptions in

transportation and limited access to facilities and support staff as a result of the COVID-

1 17 CFR 30.5. For purposes of this letter, a person is exempt from registration as an IB pursuant to

Commission regulation 30.5 if it has received confirmation of such exemption from the National Futures

Association (“NFA”) in accordance with the application procedure set forth in the regulation.

2 For purposes of this letter, U.S. persons are those persons located in the United States, its territories, or

possessions.

U.S. COMMODITY FUTURES TRADING COMMISSION

Three Lafayette Centre

1155 21st Street, NW, Washington, DC 20581

Telephone: (202) 418-5000

30.5 Foreign Broker No-Action

Page 2

19 pandemic could hamper efforts of registrants to meet their regulatory obligations. In

light of these developments, DSIO is issuing this letter to assist affected registrants with

satisfying their obligations under the CEA and Commission regulations.

I.

Regulatory Background

Pursuant to section 4d(g) of the CEA, it is unlawful for any person to be an IB, unless

such person is currently registered as an IB with the Commission. The CEA and

Commission regulation 1.3 defines an IB to include, generally, any person who, for

compensation or profit, is engaged in soliciting or accepting orders for the purchase or

sale of, among other financial products, any commodity for future delivery.3

Commission regulation 3.10(c)(4) provides an exemption from registration as an IB to

persons located outside of the U.S

ommission. The CEA and

Commission regulation 1.3 defines an IB to include, generally, any person who, for

compensation or profit, is engaged in soliciting or accepting orders for the purchase or

sale of, among other financial products, any commodity for future delivery.3

Commission regulation 3.10(c)(4) provides an exemption from registration as an IB to

persons located outside of the U.S. that are exempt from registration as an FCM in

accordance with Commission regulation 30.10 if such person:

(1)

Is affiliated with a registered FCM;

(2)

Introduces only institutional customers on a fully-disclosed basis to a registered

FCM for the purpose of trading on a designated contract market (“DCM”);

(3)

Has an affiliated FCM that files with NFA an acknowledgement that the affiliated

FCM will be jointly and severally liable for any violations of the CEA or the

Commission’s regulations committed by such person in connection with those

introducing activities; and

(4)

Does not solicit, or handle customer funds of, any person located in the U.S. for

trading on a DCM.4

Commission regulation 30.10, upon petition, permits the Commission to exempt any

person from any requirement of the Part 30 regulations, provided such exemption

would not be contrary to the public interest or to the purposes of the provision from

which the exemption is sought.5 This regulation allows persons located and doing

business outside the U.S., who are subject to a comparable regulatory framework in the

country in which they are located, to seek an exemption from the application of certain

of the Part 30 regulations. The Commission has granted many such exemptions,

permitting persons outside the U.S. to solicit or accept orders directly from U.S.

3 See Section 1a(31) of the CEA, 7 U.S.C. 1a(31), and 17 CFR 1.3.

4 Commission regulation 3.10(c)(4), 17 CFR 3.10(c)(4).

5 17 CFR 30.10(a).

n exemption from the application of certain

of the Part 30 regulations. The Commission has granted many such exemptions,

permitting persons outside the U.S. to solicit or accept orders directly from U.S.

3 See Section 1a(31) of the CEA, 7 U.S.C. 1a(31), and 17 CFR 1.3.

4 Commission regulation 3.10(c)(4), 17 CFR 3.10(c)(4).

5 17 CFR 30.10(a).

30.5 Foreign Broker No-Action

Page 3

customers for foreign futures or options transactions and accept customer money or

other property to secure such transactions without registering as an FCM.6

Commission regulation 30.5 also permits the Commission to exempt from registration

any person not located in the United States that is required to register under Part 30 of

the Commission regulations, except those required to register as FCMs, subject to

certain conditions.7 Pursuant to Commission regulation 30.5, the Commission has

exempted many foreign brokers acting in the capacity of an IB on behalf of U.S. persons

for trading on foreign futures and options markets.

“Associated person” is defined in Commission regulation 1.3 to mean, in relevant part,

any natural person who is associated with an FCM or IB as an employee that solicits or

accepts customer orders. “Order” is defined in Commission regulation 1.3 to mean, in

relevant part, an instruction or authorization provided by a customer to an FCM or IB

regarding trading in a commodity interest on behalf of the customer. Commission

regulation 3.12(a) makes it unlawful (unless exempt) for any person to be associated

with an FCM or IB as an AP unless that person shall have registered under the CEA as

an AP of that sponsoring FCM or IB. Thus, a natural person accepting orders from

customers on behalf of an FCM or IB must be registered with the Commission as an AP

of the FCM or IB

est on behalf of the customer. Commission

regulation 3.12(a) makes it unlawful (unless exempt) for any person to be associated

with an FCM or IB as an AP unless that person shall have registered under the CEA as

an AP of that sponsoring FCM or IB. Thus, a natural person accepting orders from

customers on behalf of an FCM or IB must be registered with the Commission as an AP

of the FCM or IB. To be registered as an AP, a person must, among other things, file a

registration form with NFA, meet certain proficiency standards (i.e., pass the National

Commodity Futures Examination), and submit fingerprints for a background check in

order to ensure that such person is not be subject to a statutory disqualification.

II.

Summary of Request for Relief

Based on the request for relief and other communications with FIA and its counsel, we

understand the relevant facts to be as follows. Certain FCMs are part of international

financial services groups with operations in the United States and in other major

financial centers around the globe. Personnel of FCMs that solicit and accept orders for

futures transactions from U.S. customers to be executed on U.S. DCMs are all registered

with the Commission as APs.

Due to the disruptions caused by the COVID-19 pandemic and the social distancing

required in response, many FCMs have implemented their business continuity plans

(“BCPs”). These BCPs require certain APs to work away from the FCM’s normal

6 See Foreign Part 30 Exemptions listed on the Commission’s website at:

https://sirt.cftc.gov/sirt/sirt.aspx?Topic=ForeignPart30Exemptions.

7 These conditions include appointment of a U.S. agent for service of process, compliance with certain

disclosure (Commission regulation 30.6), and business conduct regulations (Commission regulations 1.37

and 1.57), and providing access to the Commission and the U.S. Department of Justice to certain books

and records. See 17 CFR 30.5(a), (c), and (d).

sirt.aspx?Topic=ForeignPart30Exemptions.

7 These conditions include appointment of a U.S. agent for service of process, compliance with certain

disclosure (Commission regulation 30.6), and business conduct regulations (Commission regulations 1.37

and 1.57), and providing access to the Commission and the U.S. Department of Justice to certain books

and records. See 17 CFR 30.5(a), (c), and (d).

30.5 Foreign Broker No-Action

Page 4

business sites, either at alternative work sites or from home. The FCMs recognize the

possibility that these alternative work arrangements may impede the ability of their APs

to handle all U.S. customer business in a timely manner.

Certain FCMs believe that, in these circumstances, it may be more effective and more

efficient to service their U.S. customers from affiliates located in jurisdictions outside of

the U.S. Such affiliates will be properly registered in the jurisdictions in which they are

located. Moreover, such jurisdictions already have received a Commission order under

Commission regulation 30.10, pursuant to which qualified firms may be exempt from

registration as an FCM. However, FIA anticipates that not all such affiliates will have

qualified for an exemption from registration as an FCM under Commission regulation

30.10 because they may not be qualified to handle customer money in their home

jurisdiction and therefore do not qualify for 30.10 relief.. Rather, certain affiliates, i.e.,

the 30.5 Foreign Brokers, instead, have qualified for an exemption from registration as

an introducing broker in accordance with Commission regulation 30.5. As such, absent

the relief requested, these 30.5 Foreign Brokers would be unable to take advantage of

the exemption from registration provided by Commission regulation 3.10(c)(4).

In light of the above and in order to assure that all U.S

the 30.5 Foreign Brokers, instead, have qualified for an exemption from registration as

an introducing broker in accordance with Commission regulation 30.5. As such, absent

the relief requested, these 30.5 Foreign Brokers would be unable to take advantage of

the exemption from registration provided by Commission regulation 3.10(c)(4).

In light of the above and in order to assure that all U.S. FCMs are able to provide

effective and efficient services to their clients during the COVID-19 pandemic, FIA

requests that DSIO not recommend that the Commission initiate an enforcement action

against the 30.5 Foreign Brokers for violation of CEA Section 4d(g) if, subject to

appropriate conditions, such 30.5 Foreign Brokers accept orders from U.S. persons for

execution on U.S. DCMs notwithstanding that such 30.5 Foreign Brokers have not

qualified for an exemption from registration as an introducing broker in accordance

with the provisions of Commission regulation 3.10(c)(4).

FIA notes that the registration of personnel of the 30.5 Foreign Brokers (the “Covered

Personnel”) as APs of their affiliated FCMs is not practicable in light of the near-term

need and the relatively brief period of assistance that is expected to be needed. FIA does

not believe registration could be achieved quickly enough to provide the needed

assistance and believes that such registration would be unreasonably burdensome given

that Covered Personnel would only provide the assistance for a brief period during the

dislocation caused by the COVID-19 pandemic. The relief from IB registration sought

by FIA would permit the Covered Personnel to assist with servicing U.S. customers

without registering as APs of the FCMs.

In support of this request, FIA, on behalf of its member FCMs, represent that each of the

FCMs’ affiliated 30.5 Foreign Brokers:

(1)

Is duly licensed by or registered with the regulatory authority in its home

jurisdiction;

30.5 Foreign Broker No-Action

Page 5

t

by FIA would permit the Covered Personnel to assist with servicing U.S. customers

without registering as APs of the FCMs.

In support of this request, FIA, on behalf of its member FCMs, represent that each of the

FCMs’ affiliated 30.5 Foreign Brokers:

(1)

Is duly licensed by or registered with the regulatory authority in its home

jurisdiction;

30.5 Foreign Broker No-Action

Page 5

(2)

Is, although not registered with the Commission, permitted to solicit and accept

orders from U.S. persons for trading in foreign futures and options pursuant to

an exemption under Commission regulation 30.5; and

(3)

Is located in a jurisdiction for which the Commission has provided an exemption

pursuant to Commission regulation 30.10, which generally requires that the

Commission find the customer protection aspects of the laws and regulations of

such jurisdictions to be comparable to the customer protection aspects of the

CEA and Commission regulations.

I.

DSIO No-Action Positions

DSIO recognizes that each of the 30.5 Foreign Brokers is operating in a jurisdiction that

the Commission has found to have comparable customer protections. For this reason,

and in order to support an orderly response to the COVID-19 pandemic, DSIO believes

that a time-limited no-action position is warranted. Accordingly, until September 30,

2020, DSIO will not recommend that the Commission take an enforcement action

against a 30.5 Foreign Broker for failure to register with the Commission as an IB,

subject to the following conditions:

(1)

The 30.5 Foreign Broker is an affiliate8 of an FCM registered with the

Commission;

(2)

The 30.5 Foreign Broker is appropriately licensed or registered in a jurisdiction

for which the Commission has issued an exemptive order under Commission

regulation 30.10;

action

against a 30.5 Foreign Broker for failure to register with the Commission as an IB,

subject to the following conditions:

(1)

The 30.5 Foreign Broker is an affiliate8 of an FCM registered with the

Commission;

(2)

The 30.5 Foreign Broker is appropriately licensed or registered in a jurisdiction

for which the Commission has issued an exemptive order under Commission

regulation 30.10;

(3)

The 30.5 Foreign Broker introduces on a fully-disclosed basis to FCMs registered

with the Commission only institutional customers, as defined by Commission

regulation 1.3, for the purpose of trading on a DCM;

(4)

The 30.5 Foreign Broker accepts, but does not solicit,9 orders from, and does not

handle the customer funds of, any person located in the U.S. for trading on a

DCM;

(5)

Subject to the relief provided by DSIO under CFTC Staff Letter 20-03,10 the 30.5

Foreign Broker creates and maintains the records required by Commission

8 For purposes of this letter, “affiliate” means, with respect to any person, a person controlling, controlled

by, or under common control with, such person.

9 DSIO notes in connection with this condition that the 30.5 Foreign Brokers are being provided relief so

that they may assist with U.S. customer order flows rather than to act in a sales and marketing capacity,

an activity that, for customer protection reasons, DSIO believes should only be handled by registered APs.

10 CFTC Staff Letter 20-03, available on CFTC.gov, provides relief to FCMs and IBs from certain

recordkeeping requirements until June 30, 2020, in response to the COVID-19 pandemic.

30.5 Foreign Broker No-Action

Page 6

regulation 1.35 with respect to its brokerage activities with U.S. persons, and

complies with Commission regulation 1.31 with respect thereto, including

providing prompt access thereto to representatives of the Commission and the

U.S. Department of Justice upon request;

ng requirements until June 30, 2020, in response to the COVID-19 pandemic.

30.5 Foreign Broker No-Action

Page 6

regulation 1.35 with respect to its brokerage activities with U.S. persons, and

complies with Commission regulation 1.31 with respect thereto, including

providing prompt access thereto to representatives of the Commission and the

U.S. Department of Justice upon request;

(6)

Each FCM with which the 30.5 Foreign Broker is affiliated files with NFA an

acknowledgement it will be jointly and severally liable for any violations of the

CEA or the Commission’s regulations by the 30.5 Foreign Broker in connection

with its introducing activities in which it engages in reliance on this letter; and

(7)

The 30.5 Foreign Broker provides written notice to DSIO11 both when it begins

reliance on the relief provided by this letter and, if it ceases to rely on this letter

prior to September 30, 2020, when it ceases to rely on this letter.

* * * * *

11 Such notice may be provided to DSIO by email to DSIOLetters@cftc.gov. Each notice or

acknowledgment requested in this letter is a collection of information under OMB 3038-0049. No person

is required to respond to this request for information unless a valid OMB number is displayed.

30.5 Foreign Broker No-Action

Page 7

II.

Conclusion

DSIO recognizes that due to the COVID-19 pandemic registrants and other affected

market participants may seek additional or different relief in their efforts to comply with

the requirements of the CEA and Commission regulations. As a result, any registrants

that seek other relief are encouraged to contact DSIO staff. DSIO staff will address

issues on a case-by-case basis in light of the requesting registrant’s particular fact and

circumstances

strants and other affected

market participants may seek additional or different relief in their efforts to comply with

the requirements of the CEA and Commission regulations. As a result, any registrants

that seek other relief are encouraged to contact DSIO staff. DSIO staff will address

issues on a case-by-case basis in light of the requesting registrant’s particular fact and

circumstances.

This letter, and the positions taken herein, represent the views of DSIO only, and do not

necessarily represent the position or view of the Commission or of any other office or

division of the Commission. The relief issued by this letter does not excuse persons

relying on it from compliance with any other applicable requirements contained in the

CEA or in Commission regulations. Further, this letter, and the positions taken herein,

are based upon the facts and circumstances presented to DSIO. Any different, changed,

or omitted material facts or circumstances might render the relief provided by this letter

void.

Finally, as with all staff letters, DSIO retains the authority to condition further, modify,

suspend, terminate, or otherwise restrict the terms of relief provided herein, in its

discretion.

If you have any questions concerning this correspondence, please contact Frank

Fisanich, Chief Counsel, at 202-418-5949 or ffisanich@cftc.gov, or Andrew Chapin,

Associate Chief Counsel, at 202-418-5465 or achapin@cftc.gov.

Very truly yours,

___________________________________

Joshua B. Sterling

Director

Division of Swap Dealer and Intermediary Oversight

cc:

Regina Thoele, Compliance

National Futures Association, Chicago

ondence, please contact Frank

Fisanich, Chief Counsel, at 202-418-5949 or ffisanich@cftc.gov, or Andrew Chapin,

Associate Chief Counsel, at 202-418-5465 or achapin@cftc.gov.

Very truly yours,

___________________________________

Joshua B. Sterling

Director

Division of Swap Dealer and Intermediary Oversight

cc:

Regina Thoele, Compliance

National Futures Association, Chicago

BRUSSELS Office 621, Square de Meeûs 37, 1000 Brussels, Belgium | Tel +32 2.791.7571

LONDON Level 28, One Canada Square, Canary Wharf, London E14 5AB | Tel +44 (0)20.7929.0081

SINGAPORE Level 18, Centennial Tower, 3 Temasek Avenue, Singapore 039190 | Tel +65 6950.0691

WASHINGTON, DC 2001 Pennsylvania Avenue NW, Suite 600, Washington, DC 20006 | Tel +1 202.466.5460

By Electronic Mail

March 26, 2020

Joshua B. Sterling, Director

Division of Swap Dealer and Intermediary Oversight

Commodity Futures Trading Commission

1155 21st Street NW

Washington DC 20581

Re:

Request for No-Action Position – Commodity Exchange Act Section 4d(g)

Dear Mr. Sterling:

The Futures Industry Association (“FIA”)1 on behalf of its member firms that are registered as futures

commission merchants (“FCMs”), similarly situated FCMs that are not FIA member firms, and their

respective affiliates that are located outside of the US, respectfully request the Division of Swap

Dealer and Intermediary Oversight (“Division”) to confirm that it will not recommend that the

Commodity Futures Trading Commission (“Commission”) initiate an enforcement action against

such FCMs and their affiliates for apparent violation of Section 4d(g) of the Commodity Exchange

Act (“CEA”) if, subject to the terms and conditions set forth herein, such affiliates accept orders from

US persons for execution on US designated contract markets (“DCMs”) notwithstanding that such

affiliates have not qualified for an exception from registration as an introducing broker in accordance

with the provisions of Commission Rule 3.10(c)(4)

of Section 4d(g) of the Commodity Exchange

Act (“CEA”) if, subject to the terms and conditions set forth herein, such affiliates accept orders from

US persons for execution on US designated contract markets (“DCMs”) notwithstanding that such

affiliates have not qualified for an exception from registration as an introducing broker in accordance

with the provisions of Commission Rule 3.10(c)(4).

CEA Section 4d(g) provides that it is unlawful for any person to act in the capacity of an introducing

broker, unless such person is registered as such with the Commission. An introducing broker is

defined, in relevant part, to mean any person that, for compensation or profit, is engaged in soliciting

or accepting orders for the purchase or sale of any commodity for future delivery and does not accept

any money, securities, or property to margin, guarantee, or secure any trade or contracts that result or

1

FIA is the leading global trade organization for the futures, options, and centrally cleared derivatives markets,

with offices in London, Brussels, Singapore and Washington DC. FIA’s mission is to support open, transparent and

competitive markets; protect and enhance the integrity of the financial system; and promote high standards of

professional conduct. FIA’s membership includes clearing firms, exchanges, clearinghouses, trading firms and

commodities specialists from more than 48 countries, as well as technology vendors, lawyers and other professionals

serving the industry. FIA’s core constituency consists of firms that operate as clearing members in global derivatives

markets, including firms registered with the Commodity Futures Trading Commission as futures commission

merchants.

changes, clearinghouses, trading firms and

commodities specialists from more than 48 countries, as well as technology vendors, lawyers and other professionals

serving the industry. FIA’s core constituency consists of firms that operate as clearing members in global derivatives

markets, including firms registered with the Commodity Futures Trading Commission as futures commission

merchants.

Joshua B. Sterling, Director

March 26, 2020

Page 2

may result therefrom.2 Commission Rule 3.10(c)(4) provides an exemption from registration as an

introducing broker for persons located outside of the US that satisfy the terms and conditions of the

rule. Specifically, Commission Rule 3.10(c)(4) provides that a person located outside of the US may

accept orders from persons located in the US for execution on US DCMs without being registered as

an introducing broker, provided such person:

(i)

is exempt from registration as an FCM under Commission Rule 30.10;

(ii)

is affiliated with an FCM registered with the Commission in accordance with CEA

Section 4d;

(iii)

introduces only institutional customers on a fully-disclosed basis to a registered

FCM for the purpose of trading on any DCM;3 and

(iv)

does not solicit any person located in the US for trading on a DCM, and does not

handle the customer funds of any person located in the US for the purpose of trading on

any DCM.

Further, such person’s affiliated FCM must file with the National Futures Association (“NFA”) an

acknowledgement that the affiliated FCM will be jointly and severally liable for any violations of the

CEA or the Commission’s rules committed by such person in connection with those introducing

activities.

As the Division has noted in adopting a number of recent no-action positions intended to facilitate

physical separation of personnel employed by Commission registrants,4 the COVID-19 pandemic has

challenged FCMs and other registrants in timely meeting certain of their obligations under the CEA

and Commission rules

rules committed by such person in connection with those introducing

activities.

As the Division has noted in adopting a number of recent no-action positions intended to facilitate

physical separation of personnel employed by Commission registrants,4 the COVID-19 pandemic has

challenged FCMs and other registrants in timely meeting certain of their obligations under the CEA

and Commission rules. In particular, disruptions in transportation and limited access to facilities and

support staff may hamper efforts of registrants to meet their regulatory obligations. This is

particularly the case in those States, including New York and Illinois, which have imposed “shelter-

in-place” requirements. Although a limited number of associated persons (“APs”) who accept orders

from clients continue to work from their usual locations or from back-up facilities maintained by the

FCM in accordance with their business continuity plans, a number of associated persons are

increasingly being required to work from home.

Although not an immediate issue, certain FCMs believe that, in these circumstances, it may be more

effective and more efficient at some point to service their clients from affiliates located in

jurisdictions outside of the US. Such affiliates will be properly registered in the jurisdictions in which

they are located. Moreover, such jurisdictions will have received a Commission order under Rule

2

CEA Section 1a(31); Commission Rule 1.3.

3

Commission Rule 1.3 defines “institutional customer” to mean an “eligible contract participant” as defined

in CEA Section 1a(18).

4

See CFTC Letter No. 20-02, CFTC Letter No. 20-03, CFTC Letter No. 20-04, CFTC Letter No. 20-05, CFTC

Letter No. 20-06. Each letter was issued on March 17, 2020.

ill have received a Commission order under Rule

2

CEA Section 1a(31); Commission Rule 1.3.

3

Commission Rule 1.3 defines “institutional customer” to mean an “eligible contract participant” as defined

in CEA Section 1a(18).

4

See CFTC Letter No. 20-02, CFTC Letter No. 20-03, CFTC Letter No. 20-04, CFTC Letter No. 20-05, CFTC

Letter No. 20-06. Each letter was issued on March 17, 2020.

Joshua B. Sterling, Director

March 26, 2020

Page 3

30.10, pursuant to which qualified firms may be exempt from registration as an FCM. However, we

anticipate that not all such affiliates will have qualified for an exemption from registration as an FCM.

Rather, certain affiliates, instead, have qualified for an exemption from registration as an introducing

broker in accordance with Commission Rule 30.5 (each, a “30.5 Firm”).5 As such, absent the relief

requested here, these 30.5 Firms would be unable to take advantage of the exemption from

registration provided by Commission Rule 3.10(c)(4).

In light of the above and in order to assure that all US FCMs are able to provide effective and efficient

services to their clients during the COVID-19 pandemic, we respectfully request the Division to

confirm that it will not recommend that the Commission initiate an action against certain 30.5 Firms

for apparent violation of CEA Section 4d(g) if, subject to the terms and conditions set forth below,

such 30.5 Firms accept orders from US persons for execution on US DCMs notwithstanding that such

30.5 Firms have not qualified for an exemption from registration as an introducing broker in

accordance with the provisions of Commission Rule 3.10(c)(4).

We note that the registration of personnel of the 30.5 Firm (the “Covered Personnel”) as APs of

their affiliated FCMs is not practicable in light of the exigency of the near-term need and the relatively

brief period of assistance that is expected to be needed

t qualified for an exemption from registration as an introducing broker in

accordance with the provisions of Commission Rule 3.10(c)(4).

We note that the registration of personnel of the 30.5 Firm (the “Covered Personnel”) as APs of

their affiliated FCMs is not practicable in light of the exigency of the near-term need and the relatively

brief period of assistance that is expected to be needed. We do not believe registration could be

achieved quickly enough to provide the needed assistance and believe that such registration would be

unreasonably burdensome given that Covered Personnel would only provide the assistance for a brief

period during the dislocation caused by the COVID-19 pandemic. The relief from introducing broker

registration sought by FIA would permit the Covered Personnel to assist with servicing US customers

without registering as APs of the FCMs.

Unless extended by the Division, the relief requested herein would be time-limited and will expire on

September 30, 2020 and would be subject to the following terms and conditions:

(1)

The 30.5 Firm is an affiliate of an FCM registered with the Commission;

(2)

The 30.5 Firm is appropriately licensed or registered in a jurisdiction for which the

Commission has issued an exemptive order under Commission Rule 30.10;

(3)

The 30.5 Firm introduces on a fully-disclosed basis to FCMs registered with the

Commission only institutional customers, as defined by Commission Rule 1.3, for the

purpose of trading on a DCM;

5

Commission Rule 30.5 provides that a person acting in the capacity of an introducing broker with respect to

foreign futures and foreign options customers, i.e., a person that solicits or accepts orders for or involving any foreign

futures contract or foreign options transaction, and that in connection therewith, does not accept any money, securities,

or property (or extend credit in lieu thereof) to margin, guarantee, or secure any trade or contracts that result or may

result therefrom, may be exempt from registration

d foreign options customers, i.e., a person that solicits or accepts orders for or involving any foreign

futures contract or foreign options transaction, and that in connection therewith, does not accept any money, securities,

or property (or extend credit in lieu thereof) to margin, guarantee, or secure any trade or contracts that result or may

result therefrom, may be exempt from registration as a introducing broker, if such person files a Form 7-R with NFA

and designates an agent for service of process in accordance with Rule 30.5(b).

Joshua B. Sterling, Director

March 26, 2020

Page 4

(4)

The 30.5 Firm accepts, but does not solicit, orders from, and does not handle the

customer funds of, any US person for trading on a DCM;

(5)

Subject to CFTC Letter No. 20-03, the 30.5 Firm creates and maintains the records

required by Commission Rule 1.35 with respect to its brokerage activities with U.S.

persons, and complies with Commission Rule 1.31 with respect thereto, including

providing prompt access thereto to representatives of the Commission and the US

Department of Justice upon request;

(6)

Each FCM with which the 30.5 Firm is affiliated files with NFA an

acknowledgment that it will be jointly and severally liable for any violations of the CEA

or Commission rules by the 30.5 Firm in connection with its activities involving US

persons in which it engages in in reliance on this letter; and

to to representatives of the Commission and the US

Department of Justice upon request;

(6)

Each FCM with which the 30.5 Firm is affiliated files with NFA an

acknowledgment that it will be jointly and severally liable for any violations of the CEA

or Commission rules by the 30.5 Firm in connection with its activities involving US

persons in which it engages in in reliance on this letter; and

(7)

The 30.5 Firm provides notice to the Division both before it begins to rely on the

relief provided by this letter and, if it ceases to rely on this letter prior to September 30,

2020 (or any later date authorized by the Division), when it ceases to rely on this letter.

* * * *

Thank you for your consideration of this request. If you have any questions or require any additional

information, please contact me at 202.772.3057 or alurton@fia.org.

I hereby certify that the material facts set forth in this letter are true and complete to the best of my

knowledge.

Sincerely,

Allison P. Lurton

General Counsel and Chief Legal Officer

cc:

Division of Swap Dealer and Intermediary Oversight

Frank N. Fisanich, Chief Counsel

Andrew V. Chapin, Associate Chief Counsel

Signature of Allison P. Lurton, General Counsel and Chief Legal Officer