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SEC Proposes to Amend Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Customer Information

On March 15, 2023, the SEC issued a release (the “Release”) containing proposed amendments to Regulation S-P (the “Proposals”) that, if adopted, would require broker-dealers, registered investment companies (with business development companies, “registered funds”) and investment advisers to adopt written policies and procedures creating an incident response program to deal with unauthorized access to customer information, including procedures for notifying persons affected by the incident within 30 days. The Proposals would be in addition to the SEC’s other pending cybersecurity regulations.

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CFTC Staff Extends No-Action Relief from Certain Position Aggregation Requirements

Practices: Asset Management, Derivatives & Commodities, Hedge Funds, Investment Management, Private Funds

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The U.S. Commodity Futures Trading Commission’s (the “CFTC”) Division of Market Oversight recently issued CFTC Letter No. 19-19, which extends until August 12, 2022 the relief from certain position aggregation requirements it had granted previously in CFTC Letter No. 17-37. The relief was set to expire on August 12, 2019. As a result, market participants will continue to enjoy relief from many of the requirements under CFTC Rule 150.4 including:

  • Relief from the advance notice filing requirement applicable to persons relying on certain aggregation exemptions;
  • Streamlined notice filings for persons relying on the owned entity aggregation exemption;
  • An expanded scope of entities that qualify as independent account controllers; and
  • The limited application of the aggregation requirement for “substantially identical trading strategies.”

In addition, the CME Group has published Advisory Notice RA1907-5, which provides relief to market participants from the rules of the CME Group exchanges that would otherwise conflict with CFTC Letter No. 19-19. 

For additional information regarding the relief extended by CFTC Letter No. 19-19, see our prior Alert.

While the extension remains in effect, the CFTC staff will continue to evaluate the effect of the relief on the CFTC’s policy goals and ability to monitor market participants, and will consider long-term solutions implemented by rulemaking. It is likely that any future relief or rulemaking will take into account the CFTC’s long-anticipated derivatives position limits rules. Newly appointed CFTC Chairman Heath Tarbert indicated in a recent opinion article published on that issuing such rules is a top priority.

Please contact Deborah A. Monson, Jeremy A. Liabo or the Ropes & Gray attorney who usually advises you with any questions you may have or if you would like any further information.

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