The Market Participants Division of the CFTC has granted an exemption to a “limited purpose” (“SD”) exchange broker from public financial disclosure requirements under Rule 23.105(i)(1) and (2) ) of the CFTC (“Public Disclosure and Non-Public Treatment of Reports”).

CFTC staff concluded:

• the SD was only an ancillary business unit of a larger private commercial agricultural enterprise that was not otherwise required to publicly disclose financial information;




• the SD was primarily used to meet the needs of agricultural clients because an “average of 90-95% of swap exposures were to non-financial commercial end users”; and




• if forced to comply, SD’s parent company would have to either establish a stand-alone subsidiary for SD—which it deemed economically unfeasible—or limit its presence in commodity hedging markets.

The relief is conditional on the SD (i) maintaining a limited-use exchange broker designation, (ii) filing unaudited monthly financial reports and NFA-audited annual financial reports with the CFTC, (iii ) discloses on its website that it maintains twice the minimum regulatory capital requirement and (iv) the provision of five-year retrospective financial information to all existing and potential swap counterparties.

Primary sources

1. No Action Letter CFTC 22-04: Regarding the No Action Position Regarding Public Disclosure of Financial Information Under Swap Broker Financial Reporting Requirements




2. Company Request Letter to CFTC: Request for No-Action Relief from Public Disclosure of Financial Reports

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