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US CFTC Provides COVID-19 Reporting Relief for Commodity Pool Operators

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CFTC Covid 19

The US commodity futures trading commission (CFTC) last week unveiled a number of no-action measures aimed at providing temporary relief for commodity pool operators (CPOs).

The measures, which include extending filing deadlines for CPOs facing compliance challenges, are part of nearly a dozen actions the CFTC has rolled out in response to the COVID-19 crisis, as asset managers and market makers begin to grapple with working remotely. 

Responding to the concerns of a number of market participants, Joshua B. Sterling, Director of the Division of Swap Dealer and Intermediary Oversight (DSIO) at the CFTC, wrote on 20 March that ‘in order to support an orderly response to the COVID-19 pandemic, DSIO believes that the no-action positions set forth herein are warrant.’ 

The no action relief measures include: 

  • Form CPO-PQR: Small and mid-size filers must file their annual Form CPO-PQR by 15 May 2020. Larger filers (who were already required to deliver their annual Form CPO-PQR) may file their Q1 2020 Form CPO-PQR by 15 July.
  • Pool Annual Reports – CFTC Rule 4.7(b)(3) and 4.22(c): Annual reports due on or before 30 April 2020 may now be delivered to the NFA and pool participants no later than 45 days after the original date. CPOs will also be permitted additional time to file – up to 180 days from fiscal year end – under the “hardship” provisions of Rule 4.22(f).
  • Pool Periodic Account Statements – Commission Regulations 4.7(b)(2) or 4.22(b): Monthly or quarterly account statements for reporting periods ending on or before 30 April 2020 may now be delivered to pool participants within 45 days after the end of the reporting period.

However, the CFTC added that those relying on a temporary reprieve must establish and maintain a sufficient supervisory system that can supervise the activities of personnel while working from alternative or remote locations during the COVID-19 pandemic. In addition, CPOs are expected to comply with all ordinary CFTC rules as soon as the pandemic abates. 

The CFTC has extended similar measures to retail foreign exchange dealers, swap dealers, floor brokers and others, as well as setting up a designated COVID-19 page outlining the Commission’s response.

While many regulators, including the ESMA and SEC, have allowed some temporary relief measures, nearly all have stepped up their monitoring of regulated firms as markets and liquidity risks remain high.

‘We will increase monitoring of derivatives markets and their participants,’ said CFTC Chairman, Heath Tabart, in a video update online. ‘Vigilint oversight of these markets takes on a heightened importance today.’

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