CFTC Swap No-Action Relief for Registration and Compliance

On July 13, the CFTC announced time-limited no-action relief for commodity pool operators (CPOs) and commodity trading advisors (CTAs) who have been exempt or excluded from registration but, because of recent amendments to Commission Regulations 4.13 and 4.5, now need to register and satisfy compliance obligations. Under the relief, the CFTC will not take will not take enforcement actions against CPOs or CTAs for failure to register until December 31, subject to satisfaction of requirements including filing of a notice. CFTC Release.

NY Appellate Court Affirms Dismissal of Walnut Place’s Claims Against BofA and Countrywide

On June 28, 2012, the New York Appellate Division, First Department, affirmed the dismissal of Walnut Place’s $1.1 billion RMBS suit against Countrywide and Bank of America. Walnut Place sued derivatively on behalf of an RMBS trustee seeking to compel repurchase of securitized loans due to alleged breaches of representations and warranties about the loans in the pooling and servicing agreement (“PSA”). The court held that the “no-action” clause in the PSA precludes the investor plaintiffs from bringing any action related to the PSA other than for an “event of default,” which is defined to include only loan servicing-related claims and does not include the representation and warranty claims plaintiffs attempted to assert. Order.

SEC Custody Rule No-Action Letter

On July 21, the SEC provided no-action relief under Section 206(4) of the Investment Advisers Act of 1940 to investment advisers that for purposes of compliance with Rule 206(4)-2 (the “Custody Rule”), engage auditors for broker-dealers to: (i) perform surprise examinations required by the Custody Rule; (ii) prepare internal control reports; or (iii) audit the financial statements of a pooled investment vehicle. This no-action relief will expire upon the earlier of the approval of a permanent Public Company Accounting Oversight Board inspection program for broker-dealer auditors or December 13, 2013. SEC No-Action Letter.