January 8, 2020

CFTC’s Division of Market Oversight Supplements No-Action Relief to SEFs and DCMs from Certain CFTC Regulations for Correction of Errors

Washington, DC — The U.S. Commodity Futures Trading Commission’s Division of Market Oversight today announced that it has issued a no-action letter supplementing the relief provided in CFTC Letter 17-27 [See CFTC Press Release No. 7563-17], which provided relief from certain CFTC regulations to permit swap execution facilities (SEFs) and designated contract markets (DCMs) to correct clerical or operational errors discovered after a swap has been cleared.

Specifically, this no-action letter provides an alternative error correction process by which SEFs and DCMs may permit counterparties to determine that an error has occurred and correct the error, subject to ex post facto review by the SEF or DCM. The relief is subject to the terms and conditions in the letter. In addition, this letter supplements, and does not replace, CFTC Letter 17-27. SEFs and DCMs may continue to implement a trade correction policy pursuant to CFTC Letter 17-27 and its original conditions.

Consistent with CFTC Letter 17-27, this relief will expire on the effective date of revised CFTC regulations that establish a permanent, practicable solution for swaps with operational or clerical errors executed on a SEF or DCM.

-CFTC-