The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) granted no-action relief from the proviso in CFTC Regulation 1.57(a)(1), which requires an introducing broker (IB) that has entered into a guarantee agreement with a futures commission merchant (FCM) to open and carry each customer account solely with its guarantor FCM on a fully disclosed basis. 

As provided in the no-action letter, an entity intending to register as an IB will enter into a guarantee agreement with an FCM, and will additionally enter into arrangements to “give up” transactions for certain customers to various other FCMs. Subject to certain representations in the no-action letter, DSIO has granted relief to the entity intending to register as an IB from the proviso in CFTC Regulation 1.57(a)(1), thereby allowing it to enter into the “give-up” arrangements. 

The no-action letter is available here.