The CFTC Division of Clearing and Risk extended the no-action relief that was previously granted to the Shanghai Clearing House ("SHCH") from the requirement to register as a derivatives clearing organization ("DCO") (pursuant to CEA Section 5b(a)). The relief was originally granted by CFTC Letter 16-56 and extended by CFTC Letter 17-26. The relief allows for the SHCH to clear certain swaps subject to mandatory clearing in China for the proprietary trades of U.S. clearing members.
In granting the temporary relief, the Division noted that it is currently engaging in talks with the People's Bank of China (SHCH's home-country regulator) regarding a Memorandum of Understanding that would potentially allow for an exemption from DCO registration.
The temporary relief, which was originally set to expire on November 30, 2017, is now extended until the earlier of (i) February 28, 2018 or (ii) the date on which the CFTC grants SHCH a registration exemption.
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