On August 4, the Division of Swap Dealer and Intermediary Oversight, Division of Clearing and Risk and Division of Market Oversight of the Commodity Futures Trading Commission extended no-action relief (Relief) from certain transaction-level requirements previously granted to certain non-US swap dealers (SDs). Transaction-level requirements include: (1) required clearing and swap processing; (2) mandatory trade execution; (3) swap trading relationship documentation; (4) portfolio reconciliation and compression; (5) real-time public reporting; (6) trade confirmation; (7) daily trading records; and (8) external business conduct standards.
Pursuant to the Relief, non-US SDs that use personnel or agents located in the United States to arrange, negotiate or execute swaps with non-US persons that are not SDs, are exempt from the transaction-level requirements for such swaps. In the case of a swap with another non-US SD, the relief from transaction-level requirements is qualified such that the SD relying on the Relief would be required to comply with the multilateral portfolio compression and swap trading relationship requirements under CFTC Regulations 23.503 and 23.504, respectively.
The Relief expires the earlier of: (1) September 30, 2017, or (2) the effective date of any CFTC action addressing certain compliance issues implicated by transaction-level requirements.
CFTC Letter No. 16-64 is available here.