Alert December 18, 2012

CFTC Provides No-Action Relief from Fingerprinting Requirement for Certain Non-U.S. Principals

The CFTC’s Division of Swap Dealer and Intermediary Oversight (the “Division”) issued a no-action letter providing relief from the requirement that certain applications to register with the CFTC be accompanied by fingerprint cards for certain non-U.S. principals.  Specifically, the relief applies with respect to those principals who have not resided in the United States since reaching 18 years of age (“Non-U.S. Principals”).  The relief letter notes that the National Futures Association (“NFA”), which receives the fingerprint cards, submits them only to the FBI.  The letter also acknowledges that the fingerprint requirement may violate the privacy laws of certain non-U.S. jurisdictions.

The relief provides that an applicant for registration may submit, for non-U.S. Principals, either (i) a fingerprint card or (ii) a certification, signed by a person with authority to bind the applicant, that a reasonable criminal history background check using a reputable commercial service was conducted and did not reveal matters that would result in disqualification (other than those disclosed); the certification must also state that the applicant will maintain records documenting the performance and results of the background check.  Registrants that wish to avail themselves of the relief must list each Non-U.S. Principal on its application, submit a Form 8-R for each along with the certification, and notify the NFA within 30 days after the filing of the Form 8-R that it has not submitted a fingerprint card.  The no-action letter notes that the Division will continue to explore alternatives to the fingerprint requirement in the context of Non-U.S. Principals, and may revisit the guidance set forth in the letter at a future date, but without prejudice to those who have already relied on the letter.