I am very pleased that the Commission voted to finalize necessary amendments to the Commission’s regulations addressing longstanding issues with the uncleared swap confirmation requirements under Rule 37.6(b).  During the initial implementation of part 37, SEFs informed the CFTC that the confirmation requirement for uncleared swaps was operationally and technologically difficult and impractical to implement.  In light of these challenges, the Division of Market Oversight provided targeted no-action positions for SEFs with respect to certain provisions of Commission regulations throughout the last decade.[1]

As there was no workable solution that could effectuate the original language of the relevant rule, the Commission has voted to amend Rule 37.6(b) to codify the longstanding staff no-action position.  The amendment enables SEFs to incorporate terms by reference in an uncleared swap confirmation without being required to obtain the underlying, previously negotiated agreements between the counterparties.  An amendment to Rule 23.501 will clarify the consistent treatment of trades executed away from a SEF or designated contract market (DCM) and permit confirmation of all terms of a swap transaction as soon as technologically practicable following execution, as opposed to requiring confirmation “at the same time as execution.”[2]

This final rule is an example of my continuing focus on providing market participants with clarity and certainty by, where possible, codifying existing staff no-action positions.