United States: CFTC Division Grants No Action Relief related To DCO Reporting Obligations

The CFTC Division of Market Oversight ("DMO") granted time-limited no-action relief, subject to certain conditions, to (i) entities submitting swaps for clearing by derivatives clearing organizations ("DCOs") that operate under exemptive orders of no-action relief provided by CFTC staff ("Relief DCOs") (CFTC Staff Letter 16-85), and (ii) DCOs and reporting entities from certain swap reporting obligations (CFTC Staff Letter 16-86).

CFTC Staff Letter 16-85 provides that the DMO will not recommend enforcement action under CFTC Rules 45.3-45.5 against a Relief DCO Counterparty for failure to (i) report continuation data on the original swap cleared by the Relief DCO, (ii) report creation or continuation data on swaps between the Relief DCO and Relief DCO Counterparty, or (iii) generate unique swap identifiers for swaps created through the clearing process. In addition, Letter 16-85 permits an entity to identify swaps that are intended to be cleared by a Relief DCO as a cleared swap in certain primary economic terms ("PET") data to be reported on that swap. The relief will expire on the earlier of (a) January 31, 2018, (b) the effective date of any CFTC modification to regulations regarding the reporting obligations with respect to Relief DCO swaps, or (c) the revocation or expiration of any exemptive order or no-action letter issued to that Relief DCO.

CFTC Staff Letter 16-86 provides that the DMO will not recommend enforcement action under CFTC Rule 45.4 against a registered DCO for failure to report (i) continuation data on original swaps accepted for clearing by the DCO, and (ii) the new PET data fields added by the Cleared Swap Rule. The relief is subject to numerous conditions, including the requirement that Relief DCOs must collect certain information (e.g., legal entity identifiers) from submitting counterparties and provide CFTC staff with a weekly data file. The continuation data relief expires on the earlier of (i) June 27, 2017 or (ii) the date on which all DCOs that report original swap terminations to a swap data repository ("SDR") have successfully tested such reporting. The PET relief expires on the earlier of (i) March 27, 2017 or (ii) the date on which the relevant SDR has updated its standards and is accepting relevant PET data fields.

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