On March 16, the Commodity Futures Trading Commission unanimously approved a final rule removing reporting and recordkeeping requirements for trade option counterparties that are neither swap dealers nor major swap participants (“Non-SD/MSPs”). The final rule will become effective upon publication in the Federal Register.
Once the final rule becomes effective, Non-DS/MSPs will no longer be subject to the following: (1) part 45 reporting requirements in connection with trade options; (2) Form TO annual notice reporting requirements for otherwise unreported trade options (including such unreported trade options for calendar year 2015); and (3) swap-related recordkeeping requirements in connection with trade option activities. Non-SD/MSPs who transact in trade options with SDs or MSPs must still obtain a legal entity identifier and provide such identifier to their SD/MSP counterparties.
As part of the final rule, the CFTC also amends Regulation 32.3(c) to eliminate references to the now-vacated part 151 position limit requirements. The CFTC also will withdraw, upon the effective date of the final rule, CFTC No-Action Letter 13-08, which provided Non-SD/MSPs relief from certain swap-related reporting and recordkeeping requirements in connection with their trade option activities (For a more complete discussion of CFTC No-Action Letter 13-08, see the Corporate & Financial Weekly Digest edition of April 12, 2013).
The final rule is available here.