The CFTC Division of Market Oversight and Market Participants Division ("MPD") extended no-action relief in CFTC Letter 21-24 to swap dealers and granted an exemption to certain trading facilities from registering with the CFTC as swap execution facilities in connection with Brexit.
The relief supersedes CFTC Letters 21-17 and 20-39 (see previous coverage here, here and here). The UK government adopted the European Union (Withdrawal) Act, which incorporated certain EU law and regulations into UK law and regulations, as well as supervisory powers to UK regulatory authorities. As a result, the MPD recommended that the CFTC not take action against a swap dealer for complying with the UK laws and regulations incorporated under the European Union (Withdrawal) Act instead of complying with CFTC regulations. Such relief will expire upon the earlier of either a comparability determination by the CFTC for the United Kingdom or December 31, 2022.
The CFTC also determined that multilateral trading facilities ("MTFs") and organized trading facilities ("OTFs") under the EU regulatory framework satisfy the standard in CEA Section 5h(g) ("Registration Exemptions") for granting an exemption from the requirement to register as a SEF. The CFTC listed MTFs and OTFs exempt from registration in an Appendix.
Primary Sources
- CFTC Letter 21-24: Extended No-Action Relief in Connection with Certain Previously Granted Commission Determinations and Exemptions, in Response to the Withdrawal of the United Kingdom from the European Union
- CFTC Press Release: CFTC Staff Extends Existing Temporary No-Action Relief Related to Brexit
- CFTC Staff Letter No. 21-24: Extended No-Action Relief in Connection with Certain Previously Granted Commission Determinations and Exemptions, in Response to the Withdrawal of the United Kingdom from the European Union
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