On October 27, the Chairman of the Commodity Futures Trading Commission issued a public directive to clarify the CFTC’s use of staff letters and guidance. In his remarks, Chairman Tarbert highlighted the purpose and binding nature of no-action letters, interpretive letters, staff guidance (including advisories and FAQs) and exemptive letters. Specifically:

  • Chairman Tarbert emphasized that staff letters should be limited to those circumstances that are not suitable for general rulemaking and instructed staff to consider whether rulemaking would be a more appropriate vehicle for responding to an inquiry where a situation is encountered on a repeated basis and has industry-wide implications.
  • Chairman Tarbert clarified that a no-action letter may be relied upon only by the addressee of the letter, and that the public at large may not otherwise rely upon the letter, but rather should look to the letter as instructive of the views of the staff with respect to that particular matter.
  • With respect to interpretive letters, Chairman Tarbert clarified that this is a vehicle through which the staff can explain its interpretation of ambiguous terms in the regulation, but unlike a no-action letter, this letter may be relied upon by the public.
  • Staff guidance, advisories, and FAQs (collectively, Guidance) communicate the staff’s expectation regarding how regulated parties may comply with a particular requirement, or inform regulated parties about staff’s regulatory priorities. The CFTC’s issuance of Guidance is neither binding on the division nor the public.
  • Chairman Tarbert distinguished the above letters from exemptive letters, through which staff exercises exemptive authority that the CFTC has delegated to the staff. Similar to no-action letters, an exemptive letter may be relied upon only by the recipient, but the public may look to the letter as instructive of the views of the issuing division or office with regard to the particular matter, and as a basis for understanding the views of the CFTC.

Finally, the Chairman confirmed that the CFTC may issue staff letters in response to requests from trade associations or groups that represent similarly situated persons (i.e., persons or entities that share the same or substantially the same facts and circumstances).

Chairman Tarbert’s full statement is available here.