Division of 

Market Oversight 

U.S. COMMODITY FUTURES TRADING COMMISSION

Three Lafayette Centre

1155 21st Street, NW, Washington, DC 20581

Telephone: (202) 418-5000

Facsimile: (202) 418-5521

CFTC Letter No. 17-37

No-Action 

August 10, 2017 

Division of Market Oversight 

Re: No-Action Relief from certain Position Aggregation Requirements under 

Commission Regulation 150.4 

Ladies and Gentlemen: 

This letter responds to requests received by the Division of Market Oversight 

(“DMO”) of the Commodity Futures Trading Commission (“Commission”) from the 

Asset Management Group of the Securities Industry and Financial Markets Association 

(“SIFMA AMG”) and the Managed Funds Association (“MFA”) (“SIFMA AMG/MFA 

Request”), as well as from the Futures Industry Association (“FIA”) (“FIA Request”), for 

relief from compliance with certain position aggregation requirements under Commission 

Regulation 150.4. DMO is issuing this letter to provide time-limited no-action relief 

from certain aspects of the position aggregation requirements under Commission 

Regulation 150.4. 

I. Background 

On December 16, 2016, the Commission published in the Federal Register a 

rulemaking entitled Aggregation of Positions, which amended Commission Regulation 

150.4.1 Amended Commission Regulation 150.4 determines which accounts and 

positions a person must aggregate for the purpose of determining compliance with the 

applicable position limit levels set forth in Commission Regulation 150.2, and includes a 

process by which a person may file with the Commission a notice seeking an exemption 

from such aggregation requirements (i.e., a process by which a person may 

“disaggregate” its positions from those of another entity with which the person has 

certain ownership or control relationships). The amendments to Commission Regulation 

150.4 became effective on February 14, 2017. 

 

1 Aggregation of Positions, 81 FR 91454 (December 16, 2016) (“Final Aggregation Rule”).
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Under Regulation 150.4 

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2

On February 6, 2017, DMO, pursuant to Commission Staff Letter No. 17-06, 

issued temporary relief from all of the notice filing requirements under Commission 

Regulation 150.4(c) to any person or entity that is eligible to rely on an exemption from 

aggregation under Commission Regulation 150.4(b). That relief expires at 12:01 a.m. on 

August 14, 2017, meaning from that point forward, an entity relying on certain 

aggregation exemptions2 would have to file a notice with the Commission pursuant to 

Commission Regulation 150.4(c), and would generally have to do so before the 

exemption from aggregation is needed, since the filing would generally be a pre-requisite 

for obtaining the exemption.

This letter involves several provisions in amended Commission Regulation 150.4, 

including: 

(1) Commission Regulation 150.4(c)(1), which requires that any notice required 

to be filed by an entity seeking an exemption from aggregation under Commission 

Regulation 150.4(b) include a “description of the relevant circumstances that 

warrant disaggregation” and a “statement of a senior officer of the entity 

certifying that the conditions set forth in the applicable aggregation exemption 

provision have been met;”

(2) Commission Regulation 150.4(c)(6), which provides that failure to timely file 

such a notice shall not constitute a violation of the aggregation requirements in 

Commission Regulation 150.4(a)(1), or position limits set forth in Commission 

Regulation 150.2, if such notice is filed “no later than five business days after the 

person is aware, or should be aware, that such notice has not been timely filed;”3

(3) Commission Regulation 150.4(b)(2), which provides that any person with an 

ownership or equity interest in an owned entity of 10 percent or greater generally 

need not aggregate the accounts or positions of the owned entity with any other 

account or position such person is required to aggregate, provided that “Such 

person, including any entity that such person must aggregate, and the owned 

entity (to the extent that such person is aware or should be aware of the activities 

 

2

 Commission Regulation 150.4(c) requires a person relying on an exemption under paragraphs (b)(1)(ii), 

(b)(2), (b)(3), (b)(4) or (b)(7) to file a notice with the Commission. 

3

 The notice required by § 150.4(c) must otherwise generally be made before the exemption from 

aggregation is needed, since the filing would generally be a pre-requisite for obtaining the exemption. 
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August 10, 2017 

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and practices of the aggregated entity or the owned entity)”

4

meet the 

150.4(b)(2)(i)(A)-(E) firewall conditions, including that they “[d]o not have 

knowledge of the trading decisions of the other;”

5

(4) Commission Regulation 150.4(b)(4), which allows an “eligible entity,” as 

defined in 150.1(d),6

to file a notice seeking a non-spot month aggregation 

 

4

 As stated in the preamble to the Final Aggregation Rule, in recognizing that an owner may not have 

knowledge of, or an ability to find out about, the trading practices of an owned entity, the Commission has 

stated that it understands the phrase “should be aware” to mean that “the owner is charged with awareness 

of the owned entity’s activities if it is, in effect, able to control the owned entity or routinely has access to 

relevant information about the owned entity.” See Final Aggregation Rule at 91468. 

5

 The owned-entity exemption in § 150.4(b)(2) provides as follows: 

Any person with an ownership or equity interest in an owned entity of 10 percent or greater (other 

than an interest in a pooled account subject to paragraph (b)(1) of this section), need not aggregate 

the accounts or positions of the owned entity with any other accounts or positions such person is 

required to aggregate, provided that: 

(i) Such person, including any entity that such person must aggregate, and the 

owned entity (to the extent that such person is aware or should be aware of 

the activities and practices of the aggregated entity or the owned entity [emphasis added]): 

(A) Do not have knowledge of the trading decisions of the other; 

(B) Trade pursuant to separately developed and independent trading 

systems; 

(C) Have and enforce written procedures to preclude each from having knowledge of, 

gaining access to, or receiving data about, trades of the 

other. Such procedures must include security arrangements, including 

separate physical locations, which would maintain the independence of 

their activities; 

(D) Do not share employees that control the trading decisions of either; 

and 

(E) Do not have risk management systems that permit the sharing of its trades or its 

trading strategy with employees that control the trading decisions of the other; and 

(ii) Such person complies with the requirements of paragraph (c) of this section. 

6 The “eligible entity” definition in § 150.1(d) covers a limited set of entities which authorize an 

independent account controller independently to control all trading decisions on the eligible entity’s behalf. 

“Eligible entities” are limited to: commodity pool operators; vehicles excluded from the definition of 

“pool” or “commodity pool operator” under § 4.5; limited partners, limited members, or shareholders in a 

commodity pool, the operator of which is exempt from registration under § 4.13; commodity trading 

advisors; banks or trust companies; savings associations; insurance companies; or separately organized 

affiliates of any of the above. 
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Under Regulation 150.4 

August 10, 2017 

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exemption in certain circumstances for accounts carried by an “independent 

account controller,” as defined in 150.1(e);7and 

(5) Commission Regulation 150.4(a)(2), which includes an aggregation 

requirement for persons holding or controlling the trading of positions in more 

than one account or pool with “substantially identical trading strategies.”8

II. Requests for No-Action Relief 

A. SIFMA AMG/MFA Request 

On July 17, 2017, DMO received a request from SIFMA AMG and MFA for noaction relief from compliance with certain provisions of Commission Regulation 150.4. 

Specifically, the SIFMA AMG/MFA Request sought relief in circumstances where a 

person:9

“(1) otherwise would be in compliance with applicable position limits and 

position aggregation requirements but for the fact that the person does not submit 

a notice pursuant to Commission Regulation 150.4(c)(6) that it is relying on an 

exemption from position aggregation requirements, unless the person fails to file 

such notice within five (5) business days after receiving a request from the 

Commission or, for a contract that is subject to Commission-imposed position 

limits, a request from [a designated contract market (“DCM”)] to file such a 

notice; 

 

7 The “independent account controller” definition in § 150.1(e) covers a limited set of entities authorized by 

an “eligible entity” independently to control trading decisions on behalf of the eligible entity. “Independent 

account controllers” are limited to: persons registered as futures commission merchants, introducing 

brokers, commodity trading advisors, or an associated person of any such registrant; or general partners, 

managing members, or managers of a commodity pool, the operator of which is excluded from registration 

under § 4.5(a)(4) or § 4.13, provided that such general partner, managing member or manager complies 

with the requirements of §150.4(c). 

8

 Aggregation under § 150.4(a)(2) is not subject to the exemptions from aggregation in § 150.4(b), and § 

150.4(a)(2) does not include an ownership threshold, meaning if the accounts or pools have substantially 

identical trading strategies, a person must aggregate its positions, regardless of ownership level. See Final 

Aggregation Rule at 91477. 

9 The term “person” as used in the context of the SIFMA AMG/MFA request has the meaning set forth in 

Commission §1.3(u), 17 C.F.R. § 1.3(u), and includes, among others, individuals, partnerships, and 

corporations. 
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(2) otherwise would be in compliance with the independent account controller 

(“IAC”) exemption from aggregation but for the fact that the person is not eligible 

to rely on that exemption because: (a) the person or its independent account 

controller is an exempt commodity trading advisor (“CTA”); or (b) the person has 

authorized an independent account controller to act in a fiduciary capacity by 

independently controlling the trading in the person’s positions and accounts, but 

the person does not fall within the categories of ‘eligible entity’ set out in 

Commission Regulation 150.1(d); or 

(3) does not aggregate its positions with those of another person pursuant to the 

‘substantially identical trading strategies’ requirement of Commission Regulation 

150.4(a)(2)[], unless that person holds or controls the trading of positions in more 

than one account or pool with substantially identical trading strategies in order to 

willfully circumvent applicable position limits.”

10

According to the SIFMA AMG/MFA Request, without relief addressing each of 

the items listed above, certain aspects of the Final Aggregation Rule are unworkable for 

and/or impose substantial and undue burdens on investment funds, asset managers, and 

the passive investors on whose behalf they act.11 In particular, with respect to the noticefiling requirement, the SIFMA AMG/MFA Request asserts that requiring notice filings to 

be submitted on a prospective basis would impose significant operational challenges and 

burdens which would be largely avoided, without interfering with the Commission’s need 

for information, if DMO granted no-action relief from the notice filing requirement 

except in circumstances where such notice is requested by the Commission or a DCM.12

With respect to the independent account controller exemption and the definitions 

of “eligible entity” and “independent account controller,” the SIFMA AMG/MFA 

Request notes that exempt CTAs do not qualify as either an “eligible entity” or an 

“independent account controller,” and asserts that registration status for CTAs has no 

relevance to the purpose of the independent account controller exemption, and that all 

trading advisors should be able to avail themselves of the independent account controller 

exemption, regardless of their registration status.13

 The SIFMA AMG/MFA Request 

further states that a significant number of market participants (including foundations, 

 

10 SIFMA AMG/MFA Request at 2. 

11 Id. at 4. 

12 Id. at 5. 

13 Id. at 7-8. 
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endowments, and foreign pension vehicles) that grant discretionary trading authority to 

asset managers may not fall within the categories set out in the definition of an “eligible 

entity,” yet SIFMA AMG/MFA is aware of no policy rationale for their exclusion.14 

SIFMA AMG/MFA, therefore, requested that the Division grant no-action relief. 

Finally, SIFMA AMG/MFA requests relief with respect to the substantially 

identical trading requirement. The SIFMA AMG/MFA Request states that the Final

Aggregation Rule did not provide any definition or guidance as to the meaning of 

“substantially identical trading strategies,” and that absent any metrics to assess whether 

trading strategies are “substantially identical,” asset managers and investment funds 

cannot operationalize the rule in order to determine whether they are aggregating 

positions in compliance with Commission requirements.15

 

B. FIA Request 

On July 12, 2017, DMO received a letter from FIA which, among other things, 

requested relief, for substantially similar reasons as the SIFMA AMG/MFA Request, 

from compliance with the timeline for filing an aggregation exemption notice required by 

Commission Regulation 150.4(c)(6).

16

 

FIA also requested that, in regards to filing a notice within five business days of a 

Commission or DCM request, the relief DMO provides specify “that the notice filing 

would need to address the circumstances warranting disaggregation for the particular 

account or position identified in the request” [emphasis added]. SIFMA AMG and MFA 

 

14 Id. at 8. The SIFMA AMG/MFA Request states that “[a]s just one example, neither the operator of a 

foreign pension vehicle nor the pension vehicle itself is explicitly included as a category of “eligible 

entity,” even if the required separations of control and trading information are in place and observed. This 

creates an anomalous situation in which a non-US pension vehicle that is substantively similar to pension 

vehicles that are exempt under § 4.5, cannot claim the independent account controller exemption, 

notwithstanding the fact that they are substantially similar to the types of entities covered in Rule 4.5 and 

otherwise satisfy the terms of the independent account controller exemption.” Id. 

15 Id. at 9-10. 

16 For example, the FIA Request states that a “requirement that all market participants must file a notice 

before relying upon an exemption would result in thousands of filings from all types of market participants 

that in many, if not the vast majority, of cases, will not be relevant to the CFTC’s position limits 

monitoring program...By contrast, the relief that will be requested by SIFMA AMG and that is supported 

by FIA’s membership, would enable Staff to focus on information that is specifically relevant to the 

accounts or positions that prompted the CFTC’s need to review the accounts or positions for compliance 

with an applicable limit. This process would be significantly more efficient and less burdensome for Staff 

and market participants alike.” FIA Request at 2. 
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indicated their support for this request for relief.17 FIA provided the following example: 

if a market participant is relying upon the owned-entity exemption in Commission 

Regulation 150.4(b)(2), and the staff of either the Commission or a DCM ask whether the 

participant is eligible to disaggregate the owned entity, the notice filing would address 

“the circumstances warranting disaggregation for the particular owned entity” [emphasis 

added]. FIA also clarified that it was requesting that its requested relief “would not 

require that a market participant’s notice filing in response to a CFTC or DCM request 

address all accounts and positions that the participant is eligible to disaggregate.”

18

According to FIA, requiring a market participant to address all accounts and 

positions that the participant is eligible to disaggregate “would impose a substantial 

burden on industry and not provide Staff with important or necessary information. For 

example, within the context of the owned-entity exemption, FIA expects that a 

requirement to identify all owned entities in a notice filing would result in many 

participants filing notices with hundreds or thousands of owned entities, many of which 

will not trade futures or swaps. This would not provide Staff with helpful information to 

monitor compliance with position limits, but would impose a substantial burden for 

market participants to develop, file, and update notices with the list of disaggregated 

entities.”

19

Finally, FIA requested additional clarity regarding the scope and content of any 

notice filing required to be submitted by market participants relying upon the owned 

entity exemption in Commission Regulation 150.4(b)(2).20 In particular: the required 

contents of the notice filing in light of preamble language which distinguishes between 

circumstances where the owner is aware, and should be aware, or is not aware, and 

should not be aware, of the owned entity’s “activities and practices.”21

 To further clarify 

 

17 SIFMA AMG/MFA Request at 7. SIFMA AMG and MFA note that they “understand that, generally 

speaking, FIA requests that, in order for an entity to rely on the owned-entity aggregation exemption where 

the owner is not aware, and should not be aware, of the derivatives trading activity of a particular owned 

entity: (1) neither the owner nor the owned entity needs to file a notice under Commission Regulation 

150.4(c) unless the Commission requests such a filing, and (2) the notice filing must provide only 

information certifying that the owner meets the conditions to disaggregate the positions of the specific 

owned entity or entities identified by the CFTC.” Id.

18 Id.

19 Id. 

20 FIA Request at 1-3. 

21 “The Commission understands the phrase “should be aware” to mean that the owner is charged with 

awareness of the owned entity’s activities if it is, in effect, able to control the owned entity or routinely has 

access to relevant information about the owned entity. If the owner is not aware, and should not be aware, 
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Under Regulation 150.4 

August 10, 2017 

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the meaning of this language, the FIA Request provided for DMO’s consideration for 

sufficiency under Commission Regulations 150.4(c) and 150.4(b)(2) examples of two 

notice filings, one which would be used in situations where the owner is aware, and 

should be aware, of the owned entity’s activities and practices, and one where the owner 

is not aware, and should not be aware, of the owned entity’s activities and practices.22

 

The example notice filings proposed by FIA include representations regarding control 

and access to information that are limited to control of, or access to information about, 

“derivatives trading.”

23

III. Discussion of Requests for Relief 

After reviewing each request for relief from SIFMA AMG/MFA and FIA, DMO 

has determined to grant the requests for the reasons outlined below. Section IV of this 

letter will describe the no-action relief provided, including the two-year term and 

conditions of the relief. 

A. Timing and Contents of the Notice Filing for Exemption from Aggregation 

With respect to the notice filing requirement in Commission Regulation 150.4(c), 

including the timing of when the notice is due and the contents of the required notice, 

DMO preliminarily believes that the no-action relief granted below will reduce burdens 

on market participants by streamlining the notice filing requirements in a manner that is 

consistent with the underlying purpose of the Final Aggregation Rule, while ensuring that 

Commission staff can continue to effectively monitor compliance with position limits. 

In Commission Staff Letter No. 17-06, DMO granted time-limited no-action relief 

until August 14, 2017 from the notice requirements in Commission Regulation 150.4(c),

based in part on representations from SIFMA AMG and others that it would not be 

 

of the owned entity’s activities, it would not have to certify as to the owned entity.” Final Aggregation Rule 

at 91468. 

22 See § 150.4(b)(2)(i). FIA provides “Example 1—Owner May Rely On Awareness Clause” in § 

150.4(b)(2)(i), and “Example 2—Owner May Not Rely On Awareness Clause.” DMO understands that 

the “awareness” clause referred to by FIA is the provision in § 150.4(b)(2)(i), described above, which 

provides that the owner of 10% or greater in an owned entity need not aggregate the accounts or positions 

of the owned entity with its accounts provided that “Such person, including any entity that such person 

must aggregate, and the owned entity (to the extent that such person is aware or should be aware of the 

activities and practices of the aggregated entity or the owned entity)...” complies with the firewall 

conditions in 150.4(b)(2)(i)(A)-(E). 

23 FIA Request at 3. 
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Under Regulation 150.4 

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practicable to comply with the new notice filing and certification requirements by the 

February 14, 2017 effective date of the Final Aggregation Rule.24 Since issuing that 

relief, DMO staff has worked with market participants and exchanges to better 

understand the implications associated with the notice filing requirement going into 

effect, and to learn about which particular elements of the notice requirement in 

Commission Regulation 150.4(c) were causing potential difficulties for market 

participants. 

One issue that was identified during those discussions was the requirement that 

the notice must generally be submitted before the exemption from aggregation is needed, 

and that the notice must address all disaggregated entities. In its letter requesting relief, 

SIFMA AMG/MFA stated that requiring such notice filings to be submitted on a 

prospective basis would impose significant operational challenges and burdens.25 

For example, in the context of the owned-entity exemption in Commission 

Regulation 150.4(b)(2), SIFMA AMG/MFA stated that “prospectively providing a 

description of the relevant circumstances that warrant disaggregation, certifying that the 

conditions of the owned-entity exemption have been met, and updating those notices 

when material changes occur with respect to all direct and indirect entities for which 

disaggregation may be permitted would consume substantial resources of asset managers, 

investment funds, and other persons,” and that whether a passive investor’s ownership 

interest percentage meets the 10 percent threshold requiring aggregation (and thus 

triggering the need to make an owned-entity disaggregation notice filing) could change 

on a real time basis.26 In the context of the independent account controller exemption in 

Commission Regulation 150.4(b)(4), the SIFMA AMG/MFA Request states that the 

“likely result of a prospective notice filing requirement....is that asset managers’ clients 

who qualify as “eligible entities” will submit disaggregation notice filings as a 

prophylactic measure out of an abundance of caution....given the Commission’s resource 

limitations and budgetary constraints, it is not clear the Commission will be able to 

review the flood of notice filings it may receive as it seeks to identify potential position 

limits issues.”27 

 

24 See Commission Staff Letter No. 17-06 at 2-3.

25 SIFMA AMG/MFA request at 4. 

26 Id. at 5. 

27 Id.
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DMO staff discussed the validity of these concerns with several DCMs, which, 

like the Commission, also conduct surveillance over their markets, including for 

compliance with position limits. These DCMs have indicated that for contracts not 

subject to federal limits, they generally allow notice filings to be submitted to the DCM 

within five business days after receiving a request from the DCM. DMO’s understanding 

is that this process has worked well both for DCMs and for market participants, and has 

not hindered the DCMs’ ability to monitor position limit compliance and conduct 

surveillance. 

In issuing the no-action relief delineated below, DMO has sought to strike a 

balance between the concerns outlined above and the Commission’s ability to perform 

surveillance functions and monitor positions for compliance with federal limits. DMO 

has determined that granting no-action relief allowing notice filings to be made upon 

request, rather than before the exemption from aggregation is needed, and allowing notice 

filings to address only the circumstances warranting disaggregation for the particular 

account or position identified in the request, would ease the burdens described above, and 

would be in line with existing practices to which market participants are accustomed at 

several DCMs.28 In addition, DMO preliminarily believes that doing so would not hinder 

the Commission’s ability to conduct surveillance. 

B. Definitions of “Eligible Entity” and “Independent Account Controller”

With respect to the definitions used in the independent account controller 

exemption in Commission Regulation 150.4(b)(4), the Commission has previously 

indicated that it was considering comments requesting an expansion of the definition of 

the term “eligible entity,” and may take such comments up in a later proceeding.29

 The 

no-action relief set forth below will provide DMO with an opportunity to evaluate during 

the term of the relief whether any negative consequences result from the temporary 

expansions of the definitions of “eligible entity” and “independent account controller.” 

C. Substantially Identical Trading Requirement 

With respect to the substantially identical trading requirement in Commission 

Regulation 150.4(a)(2), DMO acknowledges the concerns raised by SIFMA AMG/MFA. 

 

28 In fact, DMO’s understanding is that these DCMs either already apply, or intend to apply, the same 

policy with respect to notice filings contained in the relief granted herein and require submission of 

disaggregation notice filings only after a DCM’s request for such a filing. 

29 See Final Aggregation Rule at 91480. 
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During the term of the no-action relief delineated below, DMO will evaluate the 

appropriateness of granting more permanent relief with respect to this requirement. 

D. Owned Entity Exemption 

As described above, the two examples of owned entity exemption notice filings 

included in the FIA Request include representations relating to the independence of the 

owner and the owned entity. FIA’s representations address control of, or access to 

information about, “derivatives trading,” rather than addressing control of, or access to 

information about, trading more broadly (such as cash market trading). While the Final 

Aggregation Rule does not directly address the scope of the relevant trading, the rule 

does include language regarding trading that is broader than the language used in the FIA 

Request, particularly in the context of the criteria for meeting the owned-entity 

exemption,30 and in connection with the “aware or should be aware” language and its 

associated preamble discussion.31 Although not stated explicitly in the FIA Request, 

DMO understands the implication of the two examples provided by FIA32 to be that FIA 

is seeking relief which would allow a person seeking an owned entity exemption to: (1) 

satisfy the firewall condition for the exemption in 150.4(b)(2)(i)(A) only with respect to 

derivatives trading, rather than in connection with trading more broadly; (2) provide a 

notice filing that contains a certification in regards to controlling the owned entity or 

having routine access to relevant information about the owned entity that addresses only 

derivatives trading; and (3) in circumstances where the owner is not aware, and should 

not be aware, of the derivatives trading activity of the owned entity, provide certifications 

only with respect to the owner, but not the owned entity. 

 

30 For example, the first criteria for the owned entity exemption in § 150.4(b)(2)(i)(A) refers to knowledge 

of “trading decisions” broadly, rather than to knowledge of derivatives trading decisions. 

31 The preamble discussion of the “aware or should be aware” language in § 150.4(b)(2)(i) discussed 

“trading practices” of an owned entity, and refers to an ability “to control the owned entity or routinely has 

access to relevant information about the owned entity” noting further that if the owner is not aware, and 

should not be aware, “of the owned entity’s activities, it would not have to certify as to the owned entity.” 

See Final Aggregation Rule at 91468. 

32 DMO staff confirmed this understanding during a phone call with FIA’s counsel. FIA counsel explained 

that it used the term “derivatives” in its request for relief to refer to the term “referenced contract,” as used 

in the Commission’s reproposal to amend Part 150. See Position Limits for Derivatives, 81 Fed. Reg. 

96704, 96966, (Dec. 30, 2016) (proposed definition) (“Reproposal”); see also Reproposal at 96734-35 

(discussing the proposed definition). Since the relief here is provided in response to FIA’s request, the term 

“derivatives,” for purposes of the relief provided in this letter, is defined as proposed by FIA. 
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After consideration of the FIA Request, DMO is currently of the view that it 

should provide a term of no-action relief to allow staff to evaluate whether or not 

granting relief would hinder its ability to conduct surveillance, thereby impacting the 

policy purposes of the Final Aggregation Rules. If the Commission’s surveillance 

functions or other policy goals appear to be impacted, DMO can modify the terms of 

relief provided. 

The relief provided below, therefore, allows for a narrower firewall condition in 

150.4(b)(2)(i)(A) that is limited to knowledge of “derivatives trading decisions,” allows 

for a notice filing with narrower representations limited to derivatives trading, and allows 

for certifications pertaining only to the owner when the owner is not aware, and should 

not be aware, of the owned entity’s derivatives trading activity, for the period of the noaction relief. The relief is available provided that all other applicable regulatory 

requirements have been satisfied, including, among others, that the conditions set forth in 

Commission Regulation 150.4(b)(2)(i)(B)-(E) are met, that the Commission can continue 

to rely on its authority to request additional information under Commission Regulation 

150.4(c)(3), and that two or more persons acting pursuant to an expressed or implied 

agreement or understanding will aggregate their positions in compliance with 150.4(a)(1). 

As a related matter, DMO notes that in the Final Aggregation Rule, the 

Commission includes in the “should be aware” language in Commission Regulation 

150.4(b)(2) those persons who are “able to” control the owned entity (and, consequently, 

have the authority, if desired, to control trading),33 rather than the more narrow language 

offered by FIA in the example it provided (“controls the derivatives trading of the owned 

entity” and “routine access to the derivatives trading of the owned entity”).34

 Absent the 

relief granted below, an owner would have to certify that it had no ability to control the 

owned entity, and that it had no ability to routinely access relevant information about the 

owned entity. 

In regards to the use of the term “able” in the preamble to the Final Aggregation 

Rule (as in “able to control the owned entity or routinely have access to relevant 

information about the owned entity”),35 DMO notes that the Commission was speaking in 

 

33 In the Final Aggregation Rule, the Commission stated that it “understands the phrase ‘should be aware’ 

to mean that the owner is charged with awareness of the owned entity’s activities if it is, in effect, able to 

[emphasis added] control the owned entity or routinely has access to relevant information about the owned 

entity. If the owner is not aware, and should not be aware, of the owned entity’s activities, it would not 

have to certify as to the owned entity.” Final Aggregation Rule at 91468. 

34 See FIA Request Letter at 3. 

35 See Final Aggregation Rule at 91468. 
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the abstract in the preamble, and that it would be possible that an owner that did not 

control an owned entity at one point in time might at some future point control the trading 

of that owned entity, or might use its ownership interest to receive routine and timely 

trading information about the owned entity. While the preamble uses broad language 

when discussing an ability to control the owned entity, the certification required under the 

relief set forth below is narrower in that it only requires that the owner certify that it does 

not (rather than is not able to) control the derivatives trading of the owned entity, and that 

it does not (rather than is not able to) have routine access to the derivatives trading 

information of the owned entity. Such a certification would constitute a direct 

commitment by the owner—if that certification ceases to remain true (i.e. if the owner 

does at some point control the derivatives trading of the owned entity, or does at some 

point gain routine access to the derivatives trading information of the owned entity), the 

no-action relief granted herein would no longer be applicable. 

To provide the additional clarity requested by FIA and SIFMA AMG/MFA, and 

to provide an example of how the various elements of the no-action relief delineated 

below might function together in practice in connection with the owned-entity exemption, 

DMO notes the following: in circumstances where the owner is not aware, and should 

not be aware, of the owned entity’s activities and practices, the owner seeking an owned 

entity exemption under Commission Regulation 150.4(b)(2) would be required to submit 

a notice filing that addresses only the owner’s circumstances that warrant disaggregation 

of the owned entity identified by the Commission or a DCM (but not the owned entity’s 

circumstances). The notice must also include a certification from a senior officer which 

states that the owner: (i) does not control the derivatives trading of the owned entity; (ii) 

does not have routine access to the derivatives trading information of the owned entity; 

(iii) does not have knowledge of the derivatives trading decisions of the owned entity; 

and (iv) meets the conditions specified in Commission Regulation 150.4(b)(2)(i)(B)-(E). 

The owner also must provide additional information, if any, requested by the 

Commission or Commission staff, to the extent required by 150.4(c)(3). 

In circumstances where the owner is aware, or should be aware, of the owned 

entity’s activities and practices, the owner must submit a notice filing that addresses both 

the owner’s and the owned entity’s circumstances that warrant disaggregation of the 

owned entity identified by the Commission or a DCM. The notice must also include a 

certification from a senior officer which states that both the owner and the owned entity 

do not have knowledge of the derivatives trading decisions of the other and meet the 

conditions specified in Commission Regulation 150.4(b)(2)(i)(B)-(E). The owner also 

must provide additional information, if any, requested by the Commission or 

Commission staff, to the extent required by 150.4(c)(3). 
No-Action Relief Regarding Position Aggregation Requirements 

Under Regulation 150.4 

August 10, 2017 

14

IV. Relief Provided

After consideration of the requests for relief, DMO has determined that it is 

appropriate to provide no-action relief, as detailed below. During the period of the relief, 

DMO intends to continue to evaluate whether the relief granted is hindering Commission 

staff’s ability to conduct surveillance, and may alter the relief if the surveillance functions 

or other policy goals appear to be impacted. DMO believes that the two-year period of 

no-action relief set forth below will provide DMO with a reasonable period of time in 

which it can assess the impact of the relief and consider long-term solutions that must, 

appropriately, be implemented by a notice and comment rulemaking. 

Therefore, DMO will not recommend that until August 12, 2019, during the 

period the no-action relief is in effect, the Commission commence an enforcement 

action against any person for violating any position aggregation requirement in 

Commission Regulation 150.4, or any applicable position limit, where the person: 

(1) otherwise would be in compliance with the applicable position limits in 

Commission Regulation 150.2 and position aggregation requirements under 

Commission Regulation 150.4(b) but for the fact that the person does not submit a 

notice pursuant to Commission Regulation 150.4(c)(6) that it is relying on an 

exemption from position aggregation requirements, unless the person fails to file 

such a notice within five business days after receiving a request from the 

Commission, Commission staff,36 a DCM, or DCM staff37 (“Commission or a

DCM”), to file such a notice; 

(2) otherwise would be in compliance with the applicable position limits in 

Commission Regulation 150.2 and position aggregation requirements under 

Commission Regulation 150.4(b) and Commission Regulation 150.4(c) but for 

36 DMO notes that, as is currently the case for calls for additional information under § 150.4(c)(3), under 

the relief provided here, Commission staff would have the discretion, where Commission staff deems it 

warranted, to extend the five-business day period for submitting a disaggregation notice in response to a 

request from the Commission. 

37 DMO’s understanding is that several DCMs intend to apply the same policy with respect to notice filings 

contained in the relief granted herein and require submission of disaggregation notice filings only after 

receipt of a request for such a filing by the DCM. Moreover, certain DCM rules currently provide for some 

of the relief being addressed here. Under those rules, DCM staff has discretion to extend the DCM’s

deadline for submitting a disaggregation notice required by that DCM’s rules. DMO observes that the 

Commission’s regulations do not inhibit the discretion that DCM staff may have with respect to the DCM’s 

processing of applications for exemptions from the aggregation requirements. 
No-Action Relief Regarding Position Aggregation Requirements 

Under Regulation 150.4 

August 10, 2017 

15

the fact that in its notice filing, the person addresses the circumstances warranting 

disaggregation only for the particular account or position identified by the 

Commission or a DCM in the request;38

(3) otherwise would be in compliance with the applicable position limits in 

Commission Regulation 150.2 and position aggregation requirements under 

Commission Regulation 150.4(b)(2) but for the fact that the person complies with 

150.4(b)(2)(i)(A) only in connection with derivatives trading; 

(4) otherwise would be in compliance with the applicable position limits in 

Commission Regulation 150.2 and position aggregation requirements under 

Commission Regulation 150.4(b)(2) and Commission Regulation 150.4(c) but for 

the fact that in its notice filing seeking an owned entity aggregation exemption 

under Commission Regulation 150.4(b)(2), the person’s certification: 

(a) in regards to controlling the owned entity or having routine access to 

relevant information about the owned entity addresses only derivatives 

trading; 

(b) provides that it does not control derivatives trading of the owned entity 

nor have routine access to derivatives trading information about the owned 

entity with no mention of whether it is able to do so; or 

(c) only addresses the owner, and not the owned entity, in circumstances 

where the owner is not aware, and should not be aware, of the derivatives 

trading activity of the owned entity; 

(5) otherwise would be in compliance with the independent account controller 

exemption in Commission Regulation 150.4(b)(4) but for the fact that the person 

is not eligible to rely on that exemption because either: (a) the person or the 

person’s independent account controller does not meet the definition of an 

“eligible entity” or an “independent account controller” because it is a CTA that is 

not registered as such by virtue of meeting the criteria for an exemption from 

 

38 For example, if a person is relying upon the owned-entity exemption in § 150.4(b)(2), and the 

Commission or a DCM ask whether the participant is eligible to disaggregate the owner’s positions from 

those of a particular owned entity, the notice filing must address the circumstances warranting 

disaggregation for that particular owned entity, but not for all accounts and positions that the owner is 

eligible to disaggregate. DMO notes that this relief does not in any way circumscribe the number and range 

of owned entities about which the Commission or DCM staff can ask an owner to file a § 150.4(c) notice. 
No-Action Relief Regarding Position Aggregation Requirements 

Under Regulation 150.4 

August 10, 2017 

16

registration; or (b) the person has authorized an independent account controller to 

act in a fiduciary capacity by independently controlling the trading in the person’s 

positions and accounts, but the person does not fall within the categories of 

“eligible entity” set out in Commission Regulation 150.1(d);39 or 

(6) does not aggregate its positions with those of another person pursuant to the 

“substantially identical trading strategies” requirement in Commission Regulation 

150.4(a)(2), unless that person holds or controls the trading of positions in more 

than one account or pool with substantially identical trading strategies in order to 

willfully circumvent applicable position limits. 

Upon the expiration of this no-action relief: each person or entity that intends to 

rely on an exemption from aggregation under paragraphs (b)(1)(ii), (b)(2), (b)(3), (b)(4), 

or (b)(7) of Commission Regulation 150.4(b) must file a notice as required under 

Commission Regulation 150.4(c); each person or entity that intends to rely on the 

independent account controller exemption in Commission Regulation 150.4(b)(4) must 

meet the definition of an “eligible entity” or an “independent account controller” in 

Commission Regulation 150.1, as appropriate; each person or entity that intends to rely 

on the owned entity exemption in Commission Regulation 150.4(b)(2) must meet the 

criteria in 150.4(b)(2)(i)(A)-(E) and must file a notice as required under Commission 

Regulations 150.4(b)(2) and 150.4(c); and each person or entity that does not aggregate 

its positions with those of another person pursuant to the “substantially identical trading 

strategies” requirement in Commission Regulation 150.4(a)(2) would be in violation of 

Commission Regulation 150.4(a), and any applicable position limits, as appropriate. 

DMO notes that this no-action relief would not preclude a person from filing an 

aggregation exemption notice with the Commission prior to being contacted by the 

Commission or by a DCM should it choose to do so. 

V. Conclusion 

The no-action relief provided by this letter shall remain in effect until 12:01 a.m. 

eastern standard time on August 12, 2019. 

 

39 While the independent account controller exemption in § 150.4(b)(4) requires an eligible entity, rather 

than an independent account controller, to make a notice filing, if the Commission nonetheless requests a 

filing from an independent account controller in connection with the independent account controller 

exemption, then the independent account controller need only identify the relevant eligible entity or 

entities, and the eligible entity shall have five business days to make such notice filing after the date it 

receives a request from the Commission, or a DCM, to submit such filing. 
No-Action Relief Regarding Position Aggregation Requirements 

Under Regulation 150.4 

August 10, 2017 

17

The no-action relief provided by this letter is limited to the notice filing 

requirements of Commission Regulation 150.4(c), the definitions of “eligible entity” and 

“independent account controller” referenced in the independent account controller 

exemption in Commission Regulation 150.4(b)(4), the “aware or should be aware 

language” in 150.4(b)(2), the firewall conditions for the owned entity exemption in 

150.4(b)(2)(i)(A), and the substantially identical trading requirement in Commission 

Regulation 150.4(a)(2), and does not excuse persons relying on it from compliance with 

any other applicable requirements contained in the Commodity Exchange Act (“CEA”) 

or in the Commission regulations issued thereunder. The relief also does not address 

issues related to aggregation for other purposes under the CEA and regulations, including 

manipulation or other abusive practices. 

This letter and the position taken herein represent the views of DMO only, and do 

not necessarily represent the views of the Commission or of any other division or office 

of the Commission. Further, this letter, and the relief contained herein, is based upon the 

representations made to DMO by both SIFMA AMG/MFA, in the SIFMA AMG/MFA 

Request, and FIA, in the FIA Request. It should be noted that any different, changed, or 

omitted material facts or circumstances might render this letter void. Finally, as with all 

no-action letters, DMO retains the authority to condition further, modify, suspend, 

terminate, or otherwise restrict the terms of the relief provided herein in its discretion. 

If you have any questions regarding this staff no-action letter, please contact 

Aaron Brodsky at abrodsky@cftc.gov, 202-418-5349; Riva Spear Adriance at 

radriance@cftc.gov, 202-418-5494; or Stephen Sherrod at ssherrod@cftc.gov, (202) 418-

5452. 

 

Sincerely, 

_____________________ 

Amir Zaidi 

Director 

Division of Market Oversight