November 20, 2012

CFTC’s Division of Swap Dealer and Intermediary Oversight Issues No-Action Letter on the Pay-to-Play Rules for Swap Dealers Conducting Business with Certain Governmental Special Entities

Washington, DC – The Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued a no-action letter addressing the pay-to-play rules applicable to swap dealers who conduct business with certain governmental special entities.

The pay-to-play rules in Commission Regulation 23.451 restrict a swap dealer from engaging in certain activities with a governmental special entity, if the swap dealer (or a covered associate of the swap dealer) made or solicited contributions to an official of that governmental special entity during the preceding two years, with limited exceptions. The no-action letter provides relief to swap dealers and their covered associates for making certain contributions to officials of certain special entities that may otherwise fall within the scope of Commission Regulation 23.451. The relief provided in the no-action letter is applicable to all SDs and MSPs.

The letter also clarifies the scope of the two-year “look-back” period in Commission Regulation 23.451. Specifically, the letter states that the two-year “look-back” period does not include any time period that preceded the date on which an SD is required to register as such.

Last Updated: November 20, 2012