CFTC Chairman Heath P. Tarbert on the Use of Staff Letters and Guidance

November 2nd | 2020

CFTC Chairman Heath P. Tarbert recently made public remarks on the Use of Staff Letters and Guidance. In his statement, the Chairman speaks to the differences between various types of agency guidance including No-Action Letters; Interpretive Letters; Staff Guidance, Advisories, and FAQs; and Exemptive Letters. Below are a brief summaries of the various types and the high points of the guidance offered by the CFTC Chairman to the Commission’s staff and the to the public.

No-Action Letters

A no-action letter is a statement issued by a division or office that it will not recommend enforcement action with respect to a proposed transaction or activity for failure to comply with a specific provision of the Commodity Exchange Act or CFTC rule, regulation, or order.

• Only binding on the issuing division or office

• Not binding on any other office of the Commission itself

• May only be relied upon by the recipient

• Should not establish a new policy

Interpretive Letters

An interpretive letter is a written statement with respect to a specific provision of a Commission regulation, provided in the context of a proposed transaction or activity. It is the vehicle by which staff explains its interpretation of ambiguous terms in the regulation.

• Only binding on the issuing division or office

• May be relied upon by the public

• Not binding on the public, taking a different approach is not necessarily a violation of the underlying requirements

• Should not establish a new policy

Staff Guidance, Advisories, and FAQs

Staff guidance, advisories, and FAQs communicate staff’s expectation regarding how regulated parties may comply with a particular requirement, or inform regulated parties about staff’s regulatory priorities.

• Only binding on the issuing division or office

• Not binding on the public, taking a different approach is not necessarily a violation of the underlying requirements

• Should explain how the law would apply to a unique circumstance or market event.

Exemptive Letters

• An exemptive letter is a written grant of relief issued by a division or office when the Commission itself has exemptive authority that has been delegated to the staff.

• Binding on the Commission

• Only the addressee of the letter may rely upon the relief.

• The public may not rely upon the letter, but may help them understand the views of the issuing division or office with regard to the particular course of conduct

The CFTC Chairman’s public remarks consistently emphasize transparency and this latest effort is on brand for him.