April 5, 2013

CFTC’s Division of Market Oversight and Division of Clearing and Risk Issue Joint No-Action Relief for Swaps Between Affiliated Counterparties from Certain Swap Reporting Requirements

Washington, DC – The Commodity Futures Trading Commission’s (“Commission”) Division of Market Oversight and Division of Clearing and Risk (“Divisions”) today issued no-action relief for swaps entered into between affiliates of certain wholly-owned and majority-owned market participants from the requirement to report their intra-group swaps to a registered swap data repository (“SDR”), under parts 45, 46, and regulation 50.50(b) of the Commission’s regulations, subject to several conditions.

The Divisions are granting relief from certain reporting requirements of part 45 and the end-user exception to mandatory clearing for intra-group swaps involving wholly-owned affiliates. The no-action letter provides that the Divisions will not recommend that the Commission take enforcement action against wholly-owned affiliated counterparties, that are neither swap dealers (“SDs”) or major swap participants (“MSPs”) nor affiliated with an SD or MSP, for failure to comply with obligations to report swap data for certain intra-group swaps to an SDR, provided that, among other things, the swap is not executed on a trading facility, all outward-facing swaps with unaffiliated counterparties are reported to an SDR, and the affiliated counterparties retain records of the intra-group swaps. This relief does not apply to the reporting requirements under the inter-affiliate exemption from mandatory clearing that the Commission adopted on April 1, 2013.

The Divisions also are granting relief from reporting requirements of part 45 and the end-user exception to mandatory clearing for intra-group swaps involving majority-owned affiliates. Reporting for swaps between majority-owned affiliates will be permitted on a quarterly basis, subject to similar conditions as applicable to wholly-owned affiliates. This relief does not apply to the reporting requirements under the inter-affiliate exemption from mandatory clearing.

The no-action relief also provides both wholly-owned and majority-owned affiliates with certain relief from reporting historical swap data for intra-group swaps to an SDR under part 46, subject to each of the conditions provided in the letter.

Last Updated: April 5, 2013