On April 18, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) issued No-Action Letter 17-22, which extends relief previously granted under CFTC No-Action Letter 17-05. CFTC No-Action Letter 17-05 allowed certain swap dealers to substitute compliance with the non-centrally cleared OTC derivative margin requirements applicable in the European Union (the “EU Rules”) for compliance with certain of the CFTC’s uncleared swap margin requirements in cross-border transactions with counterparties subject to the EU Rules. The overall CFTC framework for substituted compliance is conditioned in the case of each other jurisdiction on a determination by the CFTC that the rules of the other jurisdiction are “comparable” to the relevant CFTC rules. The effect of the relief was to suspend that condition for the EU. The no-action relief only applied to swap dealers that do not have a prudential regulator (i.e., non-bank swap dealers).
The no-action relief provided pursuant to CFTC No-Action Letter 17-05 is effective until (and excluding) May 8. As the CFTC continues to analyze whether a comparability determination with respect to the EU Rules is appropriate, DSIO is extending the previously granted relief through (and excluding) November 7.
The CFTC’s No-Action letter is available here.