The CFTC Division of Clearing and Risk granted an extension of no-action relief to the Shanghai Clearing House ("SHCH") (see previous coverage of the original relief) from registration as a derivatives clearing organization ("DCO"), pursuant to CEA Section 5b(a). The temporary relief, which allows the clearing of proprietary trades by U.S. clearing members, was scheduled to expire on May 31, 2017, but will be extended until the earlier of (i) November 30, 2017 or (ii) the date on which SHCH is granted a registration exemption under CEA Section 5b(h).
In its ongoing review of the SHCH exemption application, the CFTC is examining two key issues: (i) whether China's current regulatory regime allows SHCH to provide all requisite information to the regulators, and (ii) the likely effects that China's impending cybersecurity legislation may have on SHCH's ability to comply with reporting U.S. requirements.
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