U.S. COMMODITY FUTURES TRADING COMMISSION

Three Lafayette Centre

1155 21st Street, NW, Washington, DC 20581

Telephone: (202) 418-5977

Facsimile: (202) 418-5407

gbarnett@cftc.gov

Division of Swap Dealer and

Intermediary Oversight

Gary Barnett

Director

CFTC Letter No. 13-39

No-Action

June 27, 2013

Division of Swap Dealer and Intermediary Oversight

Re: Time Limited Relief for Swap Dealers in Connection with Foreign Exchange 

Intermediated Prime Brokerage Arrangements 

Ladies and Gentlemen:

This letter is in response to requests for relief from market participants to the Division of 

Swap Dealer and Intermediary Oversight (“Division”) of the Commodity Futures Trading 

Commission (“Commission”) regarding the application of certain business conduct standards for 

swap dealers (“SDs”) with counterparties1in the context of “intermediated” prime brokerage 

arrangements2relating to certain foreign exchange transactions. Market participants have 

requested that the Division provide no-action relief to SDs from certain obligations under the 

External Business Conduct Standards described below for certain transactions executed in 

accordance with intermediated prime brokerage arrangements where the SD has allocated one or 

more of such obligations under the External Business Conduct Standards to an agent 

intermediary that is registered with the Commission as an introducing broker (“IB”) or futures 

commission merchant (“FCM”).

Subject to the conditions described herein, the relief provided in this letter applies to (i) 

foreign exchange transactions that are swaps

3

(“Swaps on FX”), other than such swaps subject 

to the clearing requirement of section 2(h)(1)(A) of the Act and part 50 of the Commission’s 

regulations, if any, and (ii) physically-settled foreign exchange forwards and swap agreements 

that have been exempted from the definition of swap by the U.S. Department of the Treasury4

(“Exempt FX Transactions” and together with Swaps on FX, the “Covered Transactions”). 

 

1

See 17 CFR §§ 23.400-23.451 and Business Conduct Standards for Swap Dealers and Major Swap Participants 

with Counterparties, 77 FR 9734, Feb. 17, 2012 (hereinafter, the “External Business Conduct Standards”).

2 As more fully described infra in the “Summary of Request for Relief.”

3

Swaps are defined in Section 1a(47) of the Commodity Exchange Act (the “Act” or “CEA”) and Commission 

regulation 1.3(xxx), 17 CFR 1.3(xxx).

4 Determination of Foreign Exchange Swaps and Foreign Exchange Forwards Under the Commodity Exchange Act, 

77 Fed. Reg. 69694 (Nov. 20, 2012) (hereinafter, the “Treasury Determination”).
FX Intermediated Prime Brokerage No-Action

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Applicable Regulatory Requirements

Section 4s(h) of the CEA provides the Commission with both mandatory and 

discretionary rulemaking authority to impose business conduct standards on SDs and major swap 

participants in their dealings with counterparties, including Special Entities. Pursuant to section 

4s(h) of the CEA, on December 22, 2010, the Commission published in the Federal Register 

proposed Business Conduct Standards for Swap Dealers and Major Swap Participants with 

Counterparties as subpart H of part 23 of the Commission’s regulations.5 There was a 60-day 

period for the public to comment on the proposing release. On May 4, 2011, the Commission 

published in the Federal Register a notice to re-open the public comment period for an additional 

30 days, which ended on June 3, 2011.6 On February 17, 2012, the Commission published in the 

Federal Register final business conduct rules for SDs and major swap participants as subpart H 

of part 23.

7

 The initial compliance date for the External Business Conduct Standards was the 

later of 180 days after the effective date of the External Business Conduct Standards or “the date 

on which swap dealers or major swap participants are required to apply for registration pursuant 

to Commission rule 3.10.”8 The Commission subsequently postponed the compliance date for a 

number of the provisions of the External Business Conduct Standards until May 1, 2013.9 

Following such compliance date, SDs and MSPs are required to comply with the External 

Business Conduct Standards when entering into Covered Transactions with non-SD, non-MSP 

counterparties.

In the adopting release for the External Business Conduct Standards, the Commission 

recognized that counterparties may enter into swaps through a prime brokerage arrangement. 

With respect to compliance with the External Business Conduct Standards in transactions entered 

into through a prime brokerage arrangement, the Commission stated in the adopting release that 

“[s]wap dealers and major swap participants will be permitted to arrange with third parties, such 

as the counterparty’s prime broker, a method of providing disclosure or verifying that a Special 

 

5 Business Conduct Standards for Swap Dealers and Major Swap Participants With Counterparties, 75 FR 80638 

(proposed Dec. 22, 2010).

6 Reopening and Extension of Comment Periods for Rulemakings Implementing the Dodd-Frank Wall Street 

Reform and Consumer Protection Act, 75 FR 25274 (May 4, 2011).

7

See supra note 1.

8 External Business Conduct Standards at 9734.

9

In September 2012, the Commission changed the compliance date of §§ 23.402; 23.410(c); 23.430; 23.431(a)–(c); 

23.432; 23.434(a)(2), (b), and (c); 23.440; and 23.450 to January 1, 2013. See Confirmation, Portfolio 

Reconciliation, Portfolio Compression, and Swap Trading Relationship Documentation Requirements for Swap 

Dealers and Major Swap Participants, 77 FR 55904, 55942 (Sept. 11, 2012). The Commission later changed the 

compliance date for these provisions to May 1, 2013. See Business Conduct and Documentation Requirements for 

Swap Dealers and Major Swap Participants; Extension of Compliance Date, 78 FR 17, 20 (Jan. 2, 2013).
FX Intermediated Prime Brokerage No-Action

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Entity has an independent representative to satisfy its obligations under the rules.”10 However, 

the Commission made clear that “the swap dealer or major swap participant [that offers to enter 

into a swap with the counterparty] will remain responsible for compliance with the rules.”11

With respect to the Exempt FX Transactions, pursuant to Section 1a(47)(E) of the CEA,12

the Secretary of the Treasury (“Secretary”) is vested with the authority to determine whether 

foreign exchange swaps and foreign exchange forwards should be regulated as swaps under the 

CEA, provided that the Secretary makes a written determination satisfying certain criteria 

specified in CEA Section 1b. On November 16, 2012, the Secretary issued a written 

determination that foreign exchange swaps and forwards should not be regulated as swaps under 

the CEA.13 Nonetheless, CEA Section 1a(47)(E)(iv) provides that, notwithstanding the 

Secretary’s written determination, “any party to a foreign exchange swap or forward that is a 

swap dealer or major swap participant shall conform to the business conduct standards contained 

in section 4s(h) [of the CEA].”14 Thus, SDs and major swap participants were required to 

comply with the External Business Conduct Standards with respect to Exempt FX Transactions, 

including those for which the compliance date is May 1, 2013.

On April 30, 2013, the Division issued a no-action letter that recognized the difficulty of 

complying with the External Business Conduct Standards under long-standing prime brokerage 

arrangements (the “Prime Brokerage Letter”).15 In response to the request of participants in 

such arrangements, the Division provided no-action relief to certain SDs from compliance with 

the obligations of the SD under Commission regulations §§ 23.402(b)-(f) (Know your 

counterparty, True name and owner, Reasonable reliance on representations, Manner of 

disclosure and Disclosures in a standard format, respectively), 23.430 (Verification of 

counterparty eligibility), 23.431 (Disclosures of material information), 23.432(b) (Clearing 

disclosures for swaps not required to be cleared—right to clearing), 23.434 (Recommendations 

to counterparties--institutional suitability), 23.440 (Requirements for swap dealers acting as 

advisors to Special Entities), 23.450 (Requirements for swap dealers and major swap participants 

acting as counterparties to Special Entities), and 23.451 (Political contributions by certain swap 

dealers) with respect to a Covered Transaction with a counterparty executed under a prime 

brokerage arrangement to the extent any such obligations have been allocated to another SD and 

such other SD has accepted such allocation, subject to certain conditions regarding the form of 

the prime brokerage arrangement, notice to the counterparty, and documentation of the 

allocation. Subsequent to the issuance of the Prime Brokerage Letter, market participants have 

brought to the attention of the Division the difficulty of complying with the External Business 

 

10 External Business Conduct Standards at 9741.

11 Id. at 9741.

12 7 U.S.C. 1a(47)(E).

13 See Treasury Determination, supra note 2.

14 Additionally, foreign exchange swaps and forwards are subject to reporting obligations, pursuant to Section 

1a(47)(E)(iii) of the CEA, 7 U.S.C. § 1a(47)(E)(iii).

15 See CFTC Staff Letter No. 13-11, April 30, 2013. 

http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/13-11.pdf.
FX Intermediated Prime Brokerage No-Action

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Conduct Standards under similarly long-standing intermediated prime brokerage arrangements 

with respect to Covered Transactions. Specifically, the requesting market participants have 

argued that the basic form of prime brokerage described in the Prime Brokerage Letter is not the 

only form of prime brokerage transactions that should qualify for the relief provided therein. 

Description of FX Intermediated Prime Brokerage Arrangements

As explained by market participants, “intermediated” prime brokerage arrangements in 

Covered Transactions also are prevalent in the market. As described to the Division, 

intermediated prime brokerage arrangements currently operate in many forms, but each shares in 

common the presence of an intermediary (the “FX intermediary”) that acts as an agent for a 

prime broker that intermediates between a counterparty and an executing dealer in a Covered 

Transaction, providing the counterparty with the benefit of anonymity and access to a far larger 

pool of possible executing dealers, leading to better pricing and control of the knowledge of the 

counterparty’s market position. FX intermediaries, while ostensibly acting as agents for the 

prime broker, provide value to counterparties as brokers with superior market knowledge and 

more extensive access to liquidity through their professional expertise and extensive 

relationships with dealers and other liquidity providers. As explained to Division staff, this 

knowledge, access and expertise would be impracticable for a counterparty to develop and 

maintain on its own. As support for their argument, the requesting market participants have 

provided Division staff with numerous written testimonials from buy-side market participants, 

including asset managers and corporates, confirming that the FX intermediaries:

 Preserve anonymity of the counterparties’ trading strategies and positions;

 Provide objective, unbiased market advice because the intermediaries do not operate 

proprietary trading books;

 Have knowledge and expertise in the foreign exchange market that works to the 

advantage of counterparties when negotiating the terms of transactions, including 

knowledge of the strengths of dealers in certain types of transactions; and

 Have access to a larger pool of liquidity than is conveniently available to the 

counterparties to obtain multiple real-time prices, increasing the opportunity of obtaining 

transparent and verifiable best execution.

As described by market participants, intermediated prime brokerage transactions for the 

purposes of this letter always include a market participant who is not a SD (the “counterparty”) 

that opens an account (or otherwise enters into an arrangement) with a prime broker that is an 

SD. Prior to approving and entering into the prime brokerage arrangement, the prime broker will 

conduct due diligence and know-your customer reviews with respect to the counterparty. 

In the most basic form of prime brokerage prevalent in the market for Covered 

Transactions, the prime broker may grant limited agency powers to the counterparty, enabling 

the counterparty, as an agent for the prime broker, to negotiate Covered Transactions with a 

number of approved executing dealers, subject to specified limits and parameters. However, the 

prime broker may also grant such limited agency powers to an FX intermediary, and provide 

such intermediary with a list of the prime broker’s approved counterparties and executing 
FX Intermediated Prime Brokerage No-Action

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dealers. In such case, the FX intermediary is then free to establish relationships with one or 

more of the approved counterparties and executing dealers and to negotiate Covered 

Transactions for such counterparties with one or more of such executing dealers, as a limited 

agent of the prime broker.

With this information, an FX intermediary, on behalf of a counterparty or an asset 

manager or other representative of a counterparty, will seek bids or offers for a desired Covered 

Transaction from one or more of the approved executing dealers within the parameters 

established by the prime broker for the counterparty and executing dealers. Once the FX 

intermediary has negotiated the terms of one or more Covered Transactions between a 

counterparty and one or more executing dealers, the FX intermediary will provide a notice of the 

terms of the Covered Transaction to the prime broker. 

As long as the Covered Transaction is with an approved counterparty and an approved 

executing dealer, the terms are within the parameters established by the prime broker, and other 

conditions that may have been agreed among the parties are satisfied, upon receiving notice of 

the negotiated terms the prime broker will be obligated, either by contract or custom, to face the 

counterparty in a Covered Transaction with the same terms agreed upon by the executing dealer 

and counterparty (as negotiated by the FX intermediary), and to enter into a second Covered 

Transaction with equal but opposite terms with the executing dealer. As explained by the 

requesting market participants, the counterparty and the executing dealers need not know each 

other’s identities, preserving the anonymity of the counterparty and keeping its market position 

confidential. The FX intermediary never acts as principal to a trade and has no proprietary 

trading book, and thus does not compete with the counterparty or the executing dealers. The FX 

intermediary is compensated by the prime broker for whom it acts as agent under any one of a 

variety of compensation arrangement, including being remunerated on the basis of a spread on 

the Covered Transaction or on a fee basis.

In addition to the foregoing form of intermediated prime brokerage in Covered 

Transactions, many others have been described to the Division. For example, the FX 

intermediary may act for one prime broker while the executing dealer may use a separate prime 

broker that has a relationship with the first, allowing the FX intermediary to negotiate a 

transaction for a counterparty with an executing dealer that does not have a direct relationship 

with the first prime broker. This type of intermediated trade is booked as a transaction between 

the counterparty and its prime broker, a transaction between such prime broker and the executing 

dealer’s prime broker, and another transaction between the executing dealer’s prime broker and 

the executing dealer.

Summary of Request for Relief 

Despite the many forms of FX intermediated prime brokerage arrangements, it is only the 

FX intermediary that communicates with the counterparty prior to the time terms of a Covered 

Transaction are agreed. Thus, market participants have represented to the Division that it would 

be impracticable for prime brokers and executing dealers that are SDs to fully comply with the 

External Business Conduct Standards in such intermediated arrangements, as each entity has 
FX Intermediated Prime Brokerage No-Action

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access to different information at different points of time, and only the FX intermediary is in 

communication with the counterparty prior to determining the final terms of the transaction. 

Market participants have represented that only the prime broker usually maintains 

detailed credit and other portfolio information regarding the counterparty. On the other hand, the 

executing dealer will often not know the identity of the underlying counterparty in an 

intermediated transaction. It is the FX intermediary that represents the counterparty in 

negotiation of the terms of a Covered Transaction with the executing dealer, providing the 

counterparty with its desired anonymity. Thus, market participants argue that the prime broker is 

in the best position to take responsibility for compliance with the External Business Conduct 

Standards that relate to the general relationship between the SD and its counterparty, such as 

“know-your-counterparty” obligations under § 23.402, while the FX intermediary, but not the 

prime broker, will have access to timely trade information and information about the inherent 

risks relating to the transaction. As a result, market participants argue that the FX intermediary 

is in the best position to take responsibility for compliance with transaction-specific External 

Business Conduct Standards, such as providing the pre-trade mid-market quote and risk 

disclosures under § 23.431. 

To facilitate compliance with the External Business Conduct Standards in the context of 

intermediated prime brokerage arrangements in Covered Transactions, market participants have 

proposed that SDs be permitted to allocate responsibility for compliance with one or more 

business conduct obligations between themselves and an FX intermediary that is either an 

introducing broker (“IB”) or futures commission merchant (“FCM”) registered with the 

Commission, on the same terms as SDs are permitted to allocate such obligations between 

themselves under the Prime Brokerage Letter. The Division notes that there is no request to 

relieve SDs from, or permit an allocation of, the anti-fraud, fair dealing, confidentiality, and 

other general conduct requirements under the External Business Conduct Standards, which 

would be complied with by each of the SD acting as prime broker, an SD acting as executing 

dealer, and an FX intermediary (as required by the conditions of this letter) as applicable to their 

activities. 

Market participants have represented to the Division that unless SDs are permitted to 

allocate compliance with certain External Business Conduct Standards between the prime broker 

and the FX intermediary, it will be impossible to continue existing intermediated prime 

brokerage arrangements or, at a minimum, such arrangements will be significantly impacted. 

Requesters argue that in order to comply with the External Business Conduct Standards, trading 

that currently occurs through intermediated prime brokerage arrangements would need to occur 

under classic prime brokerage arrangements involving only prime brokers and executing dealers, 

or bilaterally between the executing dealer and the counterparty in full compliance with the 

External Business Conduct Standards. Since many executing dealers do not, and, due to risk 

limits, will not, have bilateral contractual relationships covering compliance with the External 

Business Conduct Standards with many counterparties, they would need to negotiate and enter 

into the necessary documentation or forego transacting with prime brokerage customers, which 

would, if a significant number of executing dealers did forego such transactions, decrease price 

competition and, at a minimum, disrupt trading for a significant period of time. 
FX Intermediated Prime Brokerage No-Action

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In sum, counterparties that currently depend on intermediated prime brokerage 

arrangements to meet their needs fear that requiring compliance with the totality of the business 

conduct obligations by prime brokers will eliminate or severely curtail their ability to seek prices 

from as wide a range of executing dealers and destroy their anonymity, leaving them with only 

their prime broker(s) as potential counterparties. Indeed, the Division has been informed by 

requesting market participants that some FX intermediaries have already been contacted by 

prime brokers informing them that the prime broker will no longer allow such FX intermediaries 

to intermediate Covered Transactions. Counterparties that use the services of FX intermediaries

recognize that the loss of FX intermediaries may lead to higher prices for the counterparty. 

Market participants argue that as a result of the foregoing, the market will suffer reduced

liquidity through a sudden drop in the number of participants in the markets, the management of 

counterparty credit risk will be more difficult for non-SD market participants, and such non-SD 

market participants will experience decreased collateral efficiency. 

Division No-Action Position

Based on the representations made by market participants, the Division believes that noaction relief is warranted with respect to the External Business Conduct Standards as they relate 

to Covered Transactions executed under intermediated prime brokerage arrangements where the 

prime broker is an SD and the FX intermediary is either an IB or FCM. However, the Division 

has determined to limit the business conduct obligations that may be allocated between an SD 

and an FX intermediary, as compared to those subject to allocation between SDs under the Prime 

Brokerage Letter. Thus, the Division is not granting relief to an SD acting as prime broker with 

respect to its obligations under §§ 23.402(b) and (c) (Know your counterparty, and True name 

and owner, respectively) or 23.430 (Verification of counterparty eligibility). These obligations 

must remain with the prime broker that is an SD. The remainder of the business conduct 

obligations subject to allocation remain the same as those in the Prime Brokerage Letter. 

Accordingly, the Division will not recommend that the Commission commence an 

enforcement action against a SD for failure to comply with the obligations of the SD under 

§§ 23.402(d)-(f) (Reasonable reliance on representations, Manner of disclosure, and Disclosures 

in a standard format, respectively), 23.431 (Disclosures of material information), 23.432(b)

(Clearing disclosures for swaps not required to be cleared—right to clearing), 23.434

(Recommendations to counterparties--institutional suitability), 23.440 (Requirements for swap 

dealers acting as advisors to Special Entities), 23.450 (Requirements for swap dealers and major 

swap participants acting as counterparties to Special Entities), and 23.451 (Political contributions 

by certain swap dealers) (the “apportionable business conduct obligations”) with respect to a 

Covered Transaction with a counterparty executed under an intermediated prime brokerage 

arrangement to the extent any such obligations have been allocated to an IB or FCM registered as 

such with the Commission (a “Registrant Intermediary”) and such IB or FCM has accepted 

such allocation, subject to the following conditions:
FX Intermediated Prime Brokerage No-Action

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(a) The intermediated prime brokerage arrangement meets the following description: An 

arrangement between or among an SD, a Registrant Intermediary, an executing dealer, 

and the counterparty evidenced by written agreements pursuant to which:

(1) A Registrant Intermediary negotiates and obtains agreement of the counterparty to 

the material terms and conditions of a Covered Transaction and then the 

Registrant Intermediary negotiates and obtains agreement of one or more 

executing dealers to the material terms and conditions of a Covered Transaction

(with substantially equal but opposite terms);

(2) Upon satisfaction of conditions agreed upon between the SD, one or more 

executing dealers, the counterparty, and the Registrant Intermediary, the SD (the 

“prime broker”) is required to enter into two Covered Transactions, one with the 

counterparty and one with the executing dealer (or another prime broker or 

executing dealer that directly or indirectly enters into a matching Covered 

Transaction with the executing dealer); and

(3) As a result of the foregoing:

(i) The prime broker and the counterparty are parties to a Covered 

Transaction in which all material terms and conditions are substantially 

identical (other than adjustments attributable to intermediation fees) to the 

terms and conditions to which the counterparty and the executing dealer 

previously committed through the Registrant Intermediary; and

(ii) The prime broker and the executing dealer (or another prime broker or 

executing dealer that directly or indirectly enters into a matching Covered 

Transaction with the executing dealer) are parties to a Covered 

Transaction with substantially equal but opposite terms and conditions to 

the Covered Transaction between the prime broker and the counterparty.

(b) The apportionable business conduct obligations with respect to the counterparty are 

allocated between the SD and the Registrant Intermediary and no apportionable business 

conduct obligation is left unallocated between such SD and Registrant Intermediary.

(c) The counterparty with respect to which apportionable business conduct obligations have 

been so allocated (or its duly authorized representative) is provided with notice of the 

apportionable business conduct obligations that have been allocated to the SD and the 

Registrant Intermediary prior to the time at which any such obligation is required to be 

performed.

(d) The allocation of the apportionable business conduct obligations is in writing and 

includes an agreement by the SD and Registrant Intermediary that:
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(1) Each of the SD and Registrant Intermediary will severally comply with the 

prohibition on fraud, manipulation, and other abusive practices in accordance with 

§ 23.410, and the duty to communicate with counterparties in a fair and balanced 

manner in accordance with § 23.433 with respect to their own actions and 

communications in relation to Covered Transactions executed under an 

intermediated prime brokerage arrangement;

(2) It will perform or otherwise be responsible for each apportionable business 

conduct obligation it has agreed to be allocated to it to the full extent of such 

obligation; 

(3) The SD will not be responsible for the compliance of the Registrant Intermediary 

with the apportionable business conduct obligations allocated solely to the 

Registrant Intermediary, including compliance with § 23.433 in relation to the 

Registrant Intermediary’s communications with the counterparty; 

(4) The Registrant Intermediary will not be responsible for the compliance of the SD 

with the apportionable business conduct obligations allocated solely to the SD;

and

(5) The counterparty (or its duly authorized representative) will be provided notice of 

any expiration or termination of the allocation of apportionable business conduct 

obligations no later than 30 days prior to such expiration or termination, and the

SD and Registrant Intermediary will remain responsible for fulfilling all 

applicable apportionable business conduct obligations allocated to it until such 

expiration or termination.

(e) Each of the SD and the Registrant Intermediary makes and retains a record of the 

applicable intermediated prime brokerage arrangement, the written allocation of 

apportionable business conduct obligations, and the delivery of notice of such written 

allocation to the applicable counterparty (if the obligation to deliver such notice shall 

have been allocated to it) in accordance with Commission regulation § 23.203 or § 1.31, 

as applicable, and makes such records available to the Commission upon request.

(f) The Registrant Intermediary executes in writing an undertaking by which the Registrant 

Intermediary consents to the jurisdiction of the Commission to investigate and take 

enforcement action against the Registrant Intermediary or any employee of the Registrant 

Intermediary engaged in any intermediation of a Covered Transaction described in this 

letter or the performance of the apportionable business conduct obligations allocated to 

the Registrant Intermediary in reliance on this letter for any violation of such 

apportionable business conduct obligations, the CEA or Commission regulations

(including §§ 23.410 and 23.433). The Registrant Intermediary must provide each SD 

and counterparty for which an allocation of apportionable business conduct obligations 

has been accepted by the Registrant Intermediary with an executed copy of the 

undertaking (either directly or pursuant to an industry protocol to which the SD and 
FX Intermediated Prime Brokerage No-Action

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counterparty have adhered) and maintain the undertaking at its main business office and 

in accordance with § 1.31.

The Division recognizes that the conditions of the no-action relief described above may 

require SDs and Registrant Intermediaries to complete new documentation and provide certain 

notices to qualify for such relief. To allow time for such conditions to be met and to avoid 

market disruption in the meantime, the Division will not recommend that the Commission 

commence an enforcement action against a SD for failure to comply with any apportionable 

business conduct obligations (as defined in this letter) with respect to Covered Transactions until 

July 19, 2013, provided that such Covered Transactions are conducted under intermediated prime 

brokerage arrangements of such SD in existence on the date of this letter. Such relief does not 

apply to Covered Transactions with any counterparty not executed under an intermediated prime 

brokerage arrangement in existence on the date of this letter. All relief in this letter is timelimited and will end at 12:01 eastern time on the later of the effective date or the compliance date 

of any final rule or final order providing relief from the External Business Conduct Standards as 

they relate to Covered Transactions executed under intermediated prime brokerage 

arrangements, as described in this letter.

This letter, and the positions taken herein, represent the view of the Division only, and do 

not necessarily represent the position or view of the Commission or of any other office or 

division of the Commission. The relief issued by this letter does not excuse the affected persons 

from compliance with any other applicable requirements contained in the CEA or in the 

Commission’s regulations issued thereunder. Specifically, the relief issued by this letter does not 

relieve any person from an obligation to report a swap or information concerning a swap under 

part 43 or part 45 of the Commission’s regulations. Further, this letter, and the relief contained 

herein, is based upon the information made available to the Division. Any different or changed 

material facts or circumstances might render this letter void.

Should you have any questions, please do not hesitate to contact me at (202) 418-5977; 

Frank Fisanich, Chief Counsel, at (202) 418-5949; or Jason Shafer, Attorney-Advisor, at (202) 

418-5097.

Very truly yours,

Gary Barnett

Director

Division of Swap Dealer and Intermediary Oversight

cc: Regina Thoele, Compliance

National Futures Association, Chicago
FX Intermediated Prime Brokerage No-Action

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Jamila A. Piracci, OTC Derivatives

National Futures Association, New York