The CFTC Division of Market Oversight ("DMO") extended conditional time-limited no-action relief until September 15, 2016 to an Australian exchange operating a multilateral trading platform for interest rate swaps from the Swap Execution Facility ("SEF") registration requirement outlined in CEA Section 5h(a)(1) and CFTC Rule 37.3(a)(1). The Australian exchange, which provides direct access to U.S. persons, has been operating pursuant to relief provided in a series of no-action letters that were set to expire on May 15, 2016.
The CFTC DMO emphasized that the extension of relief will allow additional time for (i) the exchange to comply with the terms and conditions in CFTC Letter 15-29, which enables no-action relief for qualifying swaps trading platforms that are licensed in Australia and regulated by the Australian Securities and Investments Commission ("ASIC"), and (ii) the DMO to review its application for more permanent relief under Letter 15-29. The no-action relief is contingent on the Australian exchange's ability to satisfy six conditions specified in a previous no-action letter, CFTC Letter 13-76, which stipulated, inter alia, that the exchange must (i) not offer trading on its platform in any product that is subject to the trade execution mandated during the relief period, and (ii) only offer trading in Australian dollar-denominated interest rate swaps on its platform.
In its request for extension of conditional no-action relief, the Australian exchange noted that it expects to (i) complete testing of certain reporting and surveillance systems by June 10, 2016, (ii) finalize work with ASIC for approval of its amended operating rules by June 15, 2016, and (iii) submit its formal request for relief to DMO, pursuant to CFTC Letter 15-29, by July 18, 2016.
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