May 19, 2015

CFTC Staff Issues an Updated Enabling No-Action Letter for Qualifying Australian Licensed Markets and Issues a Conditional No-Action Letter to Yieldbroker Pty Limited to Provide Additional Time for Compliance with its Requirements

Washington, DC — The U.S. Commodity Futures Trading Commission’s (CFTC or Commission) Divisions of Market Oversight (DMO) and Swap Dealer and Intermediary Oversight (DSIO) today announced that Yieldbroker Pty Limited (Yieldbroker) has confirmed with Commission staff that it intends to apply for relief and achieve compliance by October 15, 2015, under an updated enabling no-action letter (Letter 15-29) for qualifying swaps trading platforms that are licensed in Australia and overseen by the Australian Securities & Investments Commission (ASIC) (Qualifying Australian Licensed Markets or QALMs).

If Yieldbroker’s application for relief pursuant to Letter 15-29 is approved by CFTC staff, then Yieldbroker would become the first Australian swaps trading platform that permits direct access to U.S. persons to qualify under this framework. The framework provides for long-term no-action relief from the requirement to register as a swap execution facility (SEF) or designated contract market (DCM) under section 5h(a)(1) of the Act and Commission Regulation 37.3(a)(1).

Pursuant to CFTC No-Action Letter No. 15-30 (Letter 15-30), DMO will not recommend that the Commission take enforcement action against Yieldbroker for failure to register as a SEF or DCM, or against any market participants for use of, or other relationships with Yieldbroker for the period expiring October 15, 2015. Such no-action relief will allow Yieldbroker additional time within which to comply with the terms of Letter 15-29 for Qualifying Australian Licensed Markets, and shall remain contingent on Yieldbroker’s satisfaction of six conditions specified in CFTC No-Action Letter No. 13-76 throughout the time-limited relief period.

Today, the CFTC announced the issuance of two no-action letters that will facilitate Yieldbroker’s application for long-term no-action relief:

(1) DMO and DSIO jointly issued Letter 15-29, which is an enabling no-action letter for QALMs and which replaced CFTC No-Action Letter 14-117 (Letter 14-117); and

(2) DMO issued Letter 15-30 to extend conditional, short-term no-action relief for Yieldbroker, which is a swaps trading platform located and regulated in Australia that permits direct access to U.S. persons to transact swaps.

Previously, on September 15, 2014, DMO and DSIO jointly issued Letter 14-117 to provide conditional no-action relief to:

• QALMs from the SEF/DCM registration requirement;
• Parties executing swap transactions on QALMs from the trade execution mandate; and
• Swap dealers and major swap participants executing swap transactions on QALMs from certain business conduct requirements.

The conditional relief provided in Letter 15-29 generally tracks the conditional relief provided in Letter 14-117, but contains several notable clarifications and changes to the conditions for relief, including relaxation of certain trading methodology and reporting requirements.

Like Letter 14-117, Letter 15-29 is an enabling no-action letter that requires an Australian Licensed Market to affirmatively undertake to DMO that it will comply with the conditions set out in the letter. Relief would not be triggered until DMO reviews the applicant’s certification and issues a responsive relief letter jointly with DSIO.

Last Updated: May 19, 2015