This is a welcome "de-cluttering" rulemaking that rationalizes and codifies prior CFTC no-action letters granting CFTC-registered swap dealers relief from certain external business conduct standards and swap trading relationship documentation requirements (the "Business Conduct and Documentation Requirements"). The CFTC's adopting release provides a good overview of the multiple no-action letters issued by the CFTC since enactment of the Dodd-Frank Act to address challenges encountered by…

This letter is of particular relevance to private commodity pools offered to "qualified purchasers" in reliance on the exclusion from registration as an investment company under Section 3(c)(7) of the Investment Company Act. Unlike the de minimis exemption in CFTC Rule 4.13(a)(3), the relief for QEP Pools does not impose any limits on the volume of derivatives trading and is thus available to private funds pursuing speculative commodity derivatives trading strategies. 

In 2014, the CFTC issued CFTC Letter 14-111 permitting Fannie Mae and Fredie Mac to rely on CFTC Rule 4.13(a)(3), the de minimis exemption from CPO registration, in connection with credit risk transfer ("CRT") structures that transferred mortgage credit risk from Fannie Mae and Freddie Mac to institutional investors via an SPV. CFTC Letter 25-37 provides similar relief to regulated financial institutions in connection with qualifying CRT structures that transfer financial exposures held on…

This action highlights the importance of (i) accurate programming of data feeds used to generate research disclosures, and (ii) ongoing supervision of those data feeds to ensure the accuracy of those disclosures. Failure to catch errors early may result in repeat violations and significant fines. 

Separately, FINRA sanctioned the firm for transactions by a research analyst in "third-party managed accounts" which were inconsistent with the analyst’s stock rating. FINRA Rule 2241…