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CFTC no-action letter eases registration requirements for swaps-using business development companies

Dec 05 2012 Regulatory Intelligence news team

The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight on Wednesday issued a no-action letter to operators of business development companies. The letter states that the division will not recommend that the CFTC take enforcement action against the operators of business development companies for failure to register as commodity pool operators under the Commodity Exchange Act and the CFTC's regulations. The exemption is subject to certain conditions described in the letter, including compliance with a de minimis trading threshold. The CFTC said in the letter that under the Dodd-Frank financial regulatory overhaul, business development companies that participated in even one swaps contract could be required to register as commodity pool operators. But the CFTC said the division was trying to strike a balance between its regulatory objectives and "the operational circumstances facing certain specialized funds." It said the no-action relief would

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