On July 23, the CFTC staff issued No-Action Letter 14-95 (available here) extending the compliance date from August 15, 2014 to February 11, 2016 for use of new Forms 40/40S—reports solicited from market participants by “special call” of the CFTC—and the CFTC’s automated filing interface for such Forms.
We published a recent Client Alert, here, with a discussion of the No-Action Letter and a background on the new Form 40/40S. We also provide a summary below.
Under the CFTC Rules regarding large trader reporting, futures commission merchants , and certain other intermediaries, make periodic reports to the CFTC regarding accounts of customers that hold large positions in exchange traded futures and options. Once an account reaches a reportable size, the CFTC may then contact the customer directly and require that the trader file a Form 40 with more detailed information.
In 2011, the CFTC revised its Large Trader Reporting Rules to solicit information about certain swap positions. The CFTC then began receiving reports from swap dealers that identify the swap dealers’ counterparties to swaps that are linked to certain commodity futures contracts or the physical commodities underlying those contracts. The CFTC may then contact the swap counterparty directly and require that the counterparty file a “Form 40S,” the swap version of Form 40. The CFTC requirement for a company to file a Form 40 or Form 40S is called a “special call.”
In November 2013, the CFTC published its final new Large Trader Reporting FORMS—including new Form 40/40S to be used for its special call authority in respect of “swaps.” The new Form 40/40S requirements differ in several ways from the prior Form 40 rules. For example, once effective, the new CFTC rules will require Form 40/40S to be submitted electronically to the CFTC via an automated web interface. The new Form 40/40S rules also require the commercial entity that receives such a special call once to CONTINUE TO SUPPLEMENT AND UPDATE its Form 40S, whether or not the entity receives another periodic special call from the CFTC.
The CFTC has not yet developed the necessary automated web interface and as a result has extended the compliance date for the use of the new Form 40/40S to February 11, 2016. Note that if a company receives a special call, it still must comply through the use of the old Form 40 or otherwise following the CFTC directions in the special call.
The Swap Report