December 20, 2018

CFTC Staff Acts to Expand U.S. Customer Options for Clearing Swaps

Washington, DC — The U.S. Commodity Futures Trading Commission’s (CFTC) staff today issued permission to Eurex Clearing AG (Eurex) to begin clearing swap transactions on behalf of customers of futures commission merchants (FCMs), providing U.S. customers with another option for clearing their swap transactions. CFTC staff permission was issued in the form of three letters from the Division of Clearing and Risk and the Division of Swap Dealer and Intermediary Oversight.

The first letter, issued by the Division of Clearing and Risk, confirms that Eurex has demonstrated compliance with the straight-through-processing requirements of Regulation 39.12(b)(7) and approves certain Eurex rules.  Compliance with the CFTC’s straight-through-processing requirements was a condition of the February 2016 order granting registration to Eurex as a derivatives clearing organization for the purpose of clearing swap transactions.  Prior to the issuance of this letter, Eurex could clear proprietary swap transactions for U.S. persons pursuant to staff no-action relief, but could not clear swap transactions on behalf of customers of FCMs.

The second letter, issued jointly by the Divisions, provides conditional relief from certain Commission regulations to allow Eurex’s FCM clearing members to deposit and hold customer margin in the form of securities at Clearstream Banking AG, a central securities depository based in Germany. 

The third letter, issued by the Division of Clearing and Risk, provides no-action relief permitting modifications to the acknowledgment letter that Eurex is required to obtain from the Deutsche Bundesbank in order to deposit customer margin in the form of cash at the Deutsche Bundesbank.