On September 1, 2016, US-prescribed margin requirements for uncleared swaps took effect, even though implementation of such requirements has been delayed in certain other jurisdictions. The US Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight also issued a time-limited, no-action letter providing that it will not recommend an enforcement action against a swap dealer subject to the September 1, 2016 compliance date, subject to certain conditions, for failing to fully comply with the custodial arrangement requirements of CFTC regulation 23.157 prior to October 3, 2016. The DSIO states that it is appropriate to provide this relief when a swap dealer is making diligent, good faith implementation efforts in this period of transition.

In a statement accompanying the no-action letter, CFTC Chairman Massad highlighted that such relief may be of particular benefit to smaller firms or foreign firms that had not been able to put in place the necessary arrangements by September 1, 2016. On August 31, 2016, CFTC Commissioner J. Christopher Giancarlo also issued a statement criticizing the decision by the US authorities not to delay implementation of the margin requirement.

The CFTC staff letter is available at: http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/16-70.pdf. The statement by Chairman Massad is available at: http://www.cftc.gov/PressRoom/SpeechesTestimony/massadstatement090116 and the statement by Commissioner Giancarlo is available at: http://www.cftc.gov/PressRoom/SpeechesTestimony/giancarlostatement083116