On January 8, the Division of Clearing and Risk (Division) of the Commodity Futures Trading Commission issued no-action relief from the swap clearing requirements of Section 2(h)(1)(A) of the Commodity Exchange Act to certain bank holding companies (BCHs), savings and loan holding companies (SLHCs), and Community Development Financial Institutions (CDFIs).
Pursuant to CFTC Letter No. 16-01, the Division will not recommend that the CFTC take enforcement action against a BHC or SLHC for failure to comply with the clearing requirements if: (1) the aggregate value of the assets of all of the BHC’s or SLHC’s subsidiaries on the last day of each subsidiary’s most recent fiscal year does not exceed $10 billion; and (2) such BHC or SLHC complies with the same conditions with which a bank or savings association must comply under CFTC Regulation 50.50 in order to elect not to clear a swap subject to the CFTC’s clearing requirement.
Pursuant to CFTC Letter No. 16-02, the Division will not recommend that the CFTC take enforcement action against a CDFI for failure to comply with the clearing requirements with respect to certain products if: (1) such CDFI maintains certification from the US Department of Treasury as a CDFI; (2) such products are limited to interest rate swaps in the fixed-to-floating swap class and forward rate agreement class denominated in US dollars that are subject to the clearing mandate according to CFTC Regulation 50.4(a); (3) interest rate swaps and forward rate agreements exempted from the clearing requirements do not exceed $200 million of total aggregate notional value per year; (4) such CDFI does not elect not to clear more than 10 such swap transactions per year; and (5) such CDFI satisfies the other conditions and requirements of CFTC Regulation 50.50 (including filing a notice of election and additional information, as described in CFTC Regulation 50.50(b)).