The CFTC Market Participants Division (the "Division") staff provided temporary capital and financial reporting relief to non-bank swap dealers ("SDs") domiciled in Japan, Mexico, the UK and the EU.
The Division stated that it will not recommend enforcement action against a non-bank SD that is subject to a capital comparability action filed with the CFTC that complies with home country capital and financial reporting requirements in lieu of CFTC Regulations 23.100-106 ("Capital and Margin Requirements for Swap Dealers"). The relief applies to any of the following entities:
- a Mexican SD registered with the Mexican Banking and Securities Commission as a broker-dealer;
- a Japanese SD registered as a Type I Financial Instruments Business Operator with the Financial Services Agency of Japan;
- a UK SD registered as an investment firm with the UK Prudential Regulatory Authority or the Financial Conduct Authority; or
- an EU SD registered as a credit institution or investment firm in its resident member state.
In addition, the relevant SD must: submit in English to the Division any financial information required by its home jurisdiction's regulator within 15 days of the deadline, which information must include statements of financial condition, income and loss, and regulatory capital; notify the Division within 24 hours of knowing that its regulatory capital is below 120 percent of its local minimum capital requirement; and notify the Division of its intention to rely on the relief.
The relief will expire at the earlier of (i) October 6, 2022, or (ii) the issuance of a CFTC comparability determination with respect to non-bank SDs residing in Japan, Mexico, the UK and the EU.
CFTC Commissioner Dawn DeBerry Stump expressed support for the issuance of the relief.
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