The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") granted no-action relief to two commodity pool operators ("CPOs") from registration, provided that each CPO delegated its responsibilities under CEA Section 4m(1) to a registered CPO, subject to certain conditions.
Although the CPOs failed to meet the common control requirement of CFTC No-Action Letter 14-126 (i.e., that the Delegating CPO and the Designated CPO be under common control with each other where they are legal entities), the DSIO granted relief on the basis that the two CPOs remained jointly and severally liable for any violations of CEA and CFTC Rules.
Commentary / Steven Lofchie
The DSIO has issued a series of virtually identical no-action Letters granting relief from the common control requirement of CFTC Letter 14-126. In the new age of regulatory efficiency, DSIO should consider issuing an interpretive letter dispensing with the common control requirement, thereby relieving firms, and the CFTC itself, from having to go through the no-action process.
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