The CFTC Division of Market Oversight ("DMO") and Division of Clearing and Risk ("DCR") extended previously issued time-limited, no-action relief from clearing and trade execution requirements for certain inter-affiliate transactions.
CFTC Letter 16-80 extends relief previously granted by CFTC Letter 15-62 and CFTC Letter 14-26 (which had been extended previously by CFTC Letter 14-136) from the trade execution requirement for swaps between affiliates even when the conditions in CFTC Rule 50.52(b)-(d) are not satisfied. The DMO continues to assess the situation involving inter-affiliate swap trading and the trade execution requirement. The DMO continues to consider establishing a permanent exemption, which has been requested by ISDA. The current exemption is now set to expire at 11:59 p.m. EST on December 31, 2017.
CFTC Letter 16-81 extends relief previously granted by CFTC Letter 15-63 and CFTC Letter 14-135 for transactions with affiliates in foreign jurisdictions. The relief allows for reliance on the alternative compliance frameworks in CFTC Rule 50.52(b)(4)(ii)-(iii) (relating to the clearing of "outward-facing" swaps) until the earlier of: (i) December 31, 2017, or (ii) with respect to a particular jurisdiction, 60 days after the date on which the CFTC announces that it has made a comparability determination as described in Regulation 50.52(b)(4)(i). The DMO noted that while significant progress has been made with regard to the implementation of mandatory clearing regimes in foreign jurisdictions, it also believes that an extension of the relief would continue to serve the purposes set forth above.
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