July 19, 2013

CFTC’s Division of Clearing and Risk Issues Extension of Time-Limited No-Action Relief from Required Clearing for Swaps Entered into by Certain Cooperatives

Washington, DC — The Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission (Commission) today announced the issuance of a time-limited, no-action letter granting relief from required clearing under section 2(h)(1)(A) of the Commodity Exchange Act and part 50 of the Commission’s regulations for certain swaps entered into by qualifying cooperatives.

The no-action letter provides that DCR will not recommend an enforcement action for a cooperative’s failure to clear a swap if the cooperative and the swap meet certain conditions set forth in the no-action letter. To qualify for the no-action relief, one of the counterparties to the swap must be a cooperative whose members are either non-financial entities or other cooperatives whose members are non-financial entities. In addition, the no-action relief only applies to swaps entered into in connection with originating loans to cooperative members, or swaps that hedge or mitigate commercial risk related to loans to, or swaps with, members.

The conditions are substantially similar to the conditions included in the proposed cooperative exemption rule published by the Commission in the Federal Register on July 17, 2012, as well as the conditions in prior no-action relief granted by DCR to qualifying cooperatives on November 28, 2012, June 7, 2013, and June 21, 2013. The proposed cooperative exemption rule is not yet final. This extension of the no-action relief will remain in effect until the earlier of August 16, 2013, or the effective date of a Commission rulemaking finalizing the proposed cooperative exemption.

Last Updated: July 19, 2013