December 19, 2016

CFTC Staff Issues Time-Limited No-Action Relief for Entities Submitting Swaps for Clearing with Derivatives Clearing Organizations Acting under Exemptive Orders or No-Action Relief

Washington, DC — The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (Division) today announced time-limited no-action relief to entities submitting swaps for clearing by derivatives clearing organizations (DCOs) operating under CFTC exemptive orders or no-action relief that CFTC staff provided (Relief DCOs). Today’s action relieves entities submitting such swaps for clearing (Relief DCO Counterparties) of obligations to terminate the original “alpha” swap and to report any swaps between the Relief DCO Counterparties and the Relief DCO. Relief DCOs are required to report such resulting swap data by the terms of their exemptive or no-action relief. This action also provides relief for counterparties to report certain primary economic terms (PET) data fields for swaps intended to be cleared by a Relief DCO (Relief ITBC Swaps) as a cleared swap.

The letter announcing the relief states that the Division will not recommend that the CFTC take an enforcement action against a Relief DCO Counterparty for failure to report continuation data on the original swap cleared by the Relief DCO, or for failure to report creation or continuation data on swaps between the Relief DCO and Relief DCO Counterparty. This relief is conditioned on the Relief DCO Counterparty providing certain information to the Relief DCO to allow the Relief DCO to fulfill its reporting obligations. This relief will expire on the earlier of (a) January 31, 2018; (b) the effective date of any CFTC Regulation altering the reporting obligations of any entities with respect to the reporting of such swaps; (c) the revocation or expiration of any exemptive order issued to that Relief DCO; or (d) the revocation or expiration of any no-action letter issued to that Relief DCO.

The no-action letter also states that the Division will not recommend that the CFTC take an enforcement action against any entity reporting a Relief ITBC Swap as a cleared swap in certain PET data fields on that swap. The relief is conditioned on the reporting entity consistently reporting all such Relief ITBC Swaps as if they are to be cleared with a CFTC-registered DCO. The relief granted to reporting entities on PET data fields will expire on the earlier of (a) January 31, 2018; (b) the effective date of any CFTC Regulation altering or amending the “Clearing indicator” or “Clearing venue” PET data fields in Part 45, or the “Cleared or Uncleared” data field in Part 43; (c) the revocation or expiration of any exemptive order issued to that Relief DCO; or (d) the revocation or expiration of any no-action letter issued to that Relief DCO.

[See the letter under Related Links.]

Last Updated: December 19, 2016