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Law360 (June 10, 2020, 5:34 PM EDT ) The Commodity Futures Trading Commission said Wednesday it is extending pandemic-related relief from certain requirements such as voice recording and time stamp regulations, citing ongoing work-from-home measures.
Previous relief provided in March by the CFTC's Divisions of Swap Dealer and Intermediary Oversight and Division of Market Oversight will be extended until Sept. 30, the commission's announcement said. The measures, which provided no-action relief from requirements such as recording oral communications and certain time stamp procedures, were originally set to expire June 30.
"This time-limited extension recognizes the reality that work-from-home arrangements are likely going to be commonplace for the foreseeable future," DSIO Director Joshua Sterling and DMO Director Dorothy DeWitt said in a statement. "During this extended period, however, we expect that registrants will take the necessary steps to come into full compliance with CFTC regulations, such as those related to voice recordings and time stamps."
The measures from the Divisions of Swap Dealer and Intermediary Oversight apply to futures commission merchants, introducing brokers, swap dealers, retail foreign exchange dealers and floor brokers. The relief for floor brokers also covers some of the commission's location requirements.
The Division of Market Oversight also extended certain audit trail requirements for members of designated contract markets and regulations about recording voice communications for swap execution facilities.
In an official letter dated Tuesday that accompanied the announcement, the commission stressed that those affected should remain vigilant to ensure that bad actors don't take advantage of the relaxed rules.
"[The Division of Market Oversight] reiterates that it expects [members of designated contract markets] relying on the relief extended by this letter to remain particularly vigilant in their self-regulatory functions and to implement compensating controls designed to ensure that the extended relief does not facilitate or allow floor brokers, or other registrants, and unregistered members of [designated contract markets] … to take advantage of market volatility to engage in improper trading," the letter said.
The CFTC has expressed concern before about the potential for fraud during the pandemic. The commission in March issued an alert asking the public to be on the lookout for fraudsters trying to profit from the market volatility, adding the commission plans to "aggressively pursue" misconduct.
--Additional reporting by Al Barbarino. Editing by Rebecca Flanagan.
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