On November 2, 2015, the US Commodity Futures Trading Commission’s Division of Market Oversight extended time-limited no-action relief to Swap Execution Facilities from certain requirements in the definition of “block trade” in CFTC Regulation Section 43.2. Section 43.2 includes in its definition of “block trade,” a publicly reportable swap transaction that “occurs away” from a registered SEF’s trading system and executed according to the SEF’s procedures. The No-Action Letter extends time-limited relief to SEFs from the “occurring away” requirement until November 15, 2016. Overall, the extension will allow the CFTC continued time to monitor and evaluate SEF trading practices, 6 FINANCIAL REGULATORY DEVELOPMENTS FOCUS November 13, 2015 Issue 42/2015 specifically in regards to pre-execution credit checks. It will also allow the CFTC time to evaluate best practices and create a more comprehensive permanent solution for screening block trade orders for compliance with risk-based limits.
The CFTC press release is available at: http://www.cftc.gov/PressRoom/PressReleases/pr7272-15.
CFTC Staff Letter 15-60 is available at: http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/15-60.pdf.