November 17, 2015

CFTC Divisions Provide Time-Limited No-Action Relief for Certain Affiliated Counterparties

Washington, DC — The U.S. Commodity Futures Trading Commission’s (Commission) Divisions of Clearing and Risk (DCR) and Market Oversight (DMO) today each extended previously-issued no-action relief for certain inter-affiliate transactions. DCR is extending no-action relief that was previously provided in No-Action Letter 14-135. DMO is extending no-action relief that was previously provided in No-Action Letter 14-26 and extended by No-Action Letter 14-136.

DCR’s No-Action Letter 14-135, which responded to issues associated with the implementation of non-U.S. jurisdictions’ mandatory clearing regimes, provided that affiliate counterparties that were otherwise eligible to rely on the alternative compliance framework prescribed in Commission regulation 50.52(b)(4)(ii)-(iii), which expired on March 11, 2014, could continue to do so until December 31, 2015. DCR’s letter today extends that relief until the earlier of (i) December 31, 2016, or (ii) with respect to a particular jurisdiction, 60 days after the date on which the Commission announces that it has made a comparability determination described in regulation 50.52(b)(4)(i). DCR believes this extension will allow for an orderly transition as jurisdictions establish and implement clearing requirements.

DMO’s No-Action Letters 14-26 and 14-136 provided additional time to study the application of the trade-execution requirement to inter-affiliate swaps. The letters provided temporary relief from the trade execution requirement to affiliate counterparties that satisfy Commission regulation 50.52(a) but do not satisfy Commission regulations 50.52(b), (c) or (d) and are not exempt from clearing. DMO’s letter today extends that relief until December 16, 2016. During this period of relief, DMO will continue to evaluate whether applying the trade execution requirement to such inter-affiliate swap transactions would promote pre-trade price transparency in the swaps market.

See letters under Related Links.

Last Updated: November 17, 2015