May 31, 2016

CFTC’s Division of Clearing and Risk Issues No-Action Letter for Shanghai Clearing House

Washington, DC — The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Clearing and Risk (DCR) today issued a time-limited no-action letter stating that DCR will not recommend that the CFTC take enforcement action against Shanghai Clearing House (SHCH) for failing to register as a derivatives clearing organization (DCO) pursuant to the Commodity Exchange Act (CEA).

The no-action relief applies to swaps accepted for clearing by SHCH and subject by the People’s Bank of China to mandatory clearing in the People’s Republic of China, including certain interest rate swaps denominated in renminbi. It is limited to SHCH’s clearing of the proprietary trades of U.S. clearing members and their affiliates and is effective until the earlier of May 31, 2017, or the date on which the CFTC exempts SHCH from registration as a DCO under Section 5b(h) of the CEA.

In requesting the relief, SHCH represented that it complies with the Principles for Financial Market Infrastructures and committed to petitioning the CFTC for an exemption from the DCO registration requirement no later than six months from the date of the letter.

Last Updated: May 31, 2016