ARTICLE
21 December 2017

Federal Register: CFTC Proposes To Allow Certain DCOs To Invest Customer Funds In Sovereign Debt

CW
Cadwalader, Wickersham & Taft LLP

Contributor

Cadwalader, established in 1792, serves a diverse client base, including many of the world's leading financial institutions, funds and corporations. With offices in the United States and Europe, Cadwalader offers legal representation in antitrust, banking, corporate finance, corporate governance, executive compensation, financial restructuring, intellectual property, litigation, mergers and acquisitions, private equity, private wealth, real estate, regulation, securitization, structured finance, tax and white collar defense.
The CFTC issued a proposed exemptive order that would allow certain derivatives clearing organizations ("DCOs") to invest futures and swap customer funds in French and German sovereign debt.
United States Finance and Banking

The CFTC issued a proposed exemptive order that would allow certain derivatives clearing organizations ("DCOs") to invest futures and swap customer funds in French and German sovereign debt. The DCOs that would qualify for the proposed relief are ICE Clear Credit LLC, ICE Clear US, Inc., and ICE Clear Europe Limited. Absent an exemption, does not permit DCOs to invest customer funds in foreign sovereign debt.

As previously covered, the DCOs also requested relief that would "expand the universe of counterparties and depositories they may use in connection with these investments given the structure of the market for repurchase agreements in euro-denominated sovereign debt." This relief would allow the DCOs to enter into reverse repo agreements with certain foreign banks, certain regulated securities dealers, or the European Central Bank and the central banks of Germany and France.

Additionally, the DCOs requested exemptive relief that would allow them to hold securities purchased through reverse repo agreements in a safekeeping account with a non-U.S. bank.

Comments on the proposal must be received by January 16, 2018.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More