U.S. COMMODITY FUTURES TRADING COMMISSION

Three Lafayette Centre 

1155 21st Street, NW, Washington, DC 20581 

Telephone: (202) 418-5430 

Facsimile: (202) 418-5547 

aradhakrishnan@cftc.gov

Division of Clearing and 

Intermediary Oversight

Ananda Radhakrishnan 

Director 

CFTC letter No. 07-15 

August 23, 2007 

No-Action 

Division of Clearing and Intermediary Oversight 

 Re: CFTC Regulation 1.65 – Transfer of Accounts 

Dear : 

 This is in response to your letter dated August 23, 2007, to the Division of Clearing and 

Intermediary Oversight (the “Division”) of the Commodity Futures Trading Commission (the 

“Commission”), concerning the transfer of accounts from “A” to your firm, “B”. You stated that 

“B” understands that this transfer is necessary because “A” is undercapitalized as a result of the 

financial problems of “C”. 

 Because of the exigent circumstances, “B” intends to accept the transfer of accounts as 

soon as possible, which could be as early as August 23, 2007. You represent that “B” has consulted with NFA on this matter and that NFA is agreeable to an immediate transfer. You have 

therefore requested a waiver of CFTC Regulation 1.65(a), 17 C.F.R. §1.65(a) (2007), concerning 

notice to and consent by customers to a bulk transfer of accounts. 

 Based upon the representations in your letter, the Division believes that granting relief 

would not be contrary to the public interest. Indeed, the Commission recognized when it 

adopted Regulation 1.65(a) that the normal ten-business-day advance notice of bulk transfers 

would not be applicable in a financial emergency. See 58 Fed. Reg. 17495, 17501 & n.27 (April 

5, 1993). 

 Accordingly, the Division will not recommend that the Commission commence any enforcement action against “B” based solely upon the failure of “B” to comply with the requirements of CFTC Regulation 1.65(a) in connection with the transfer of accounts from “A” to “B”. 

This relief is conditioned upon “B”, as soon as practicable, notifying the former customers of 

“A” that, if they do not wish to do business with “B”, they may inform “B” where they would 

like “B” to transfer their accounts. 

 This letter does not excuse “B” from compliance with any other applicable requirements 

contained in the Act or in the Commission’s regulations issued thereunder. For example, “B” 

remains subject to the other provisions of CFTC Regulation 1.65 and all applicable antifraud 
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provisions of the Act. Moreover, the position taken in this letter is applicable to “B” solely in 

connection with the transfer of customer accounts from “A” to “B”. 

 The position taken in this letter is based upon the representations that have been made to 

the Division. Any different, changed, or omitted facts or conditions might render this position 

void. You must notify the Division immediately in the event the operations or activities of “B” 

change in any material way from those represented to us. Further, this letter represents the position of this Division only and does not necessarily represent the views of the Commission or any 

other division or office of the Commission. If you have any questions concerning this correspondence, please contact Deputy Director Lawrence B. Patent at (202) 418-5439. 

 Very truly yours, 

 Ananda Radhakrishnan 

 Director