The CFTC extended the expiration datefor the relief from swap trade confirmation requirements.This new letter extends the relief until March 31, 2018, or the effective date of revised CFTC rules that establish a permanent confirmation solution for swap execution facilities ("SEFs"). The original relief was providedin CFTC No-Action Letter 14-108, then extended first in CFTC Letter 15-25 and again in CFTC Letter 16-25.
The letter grants relief for SEFs from:
- CFTC Rule 37.6, which requires an SEF to obtain documents that are incorporated by reference in a trade confirmation issued by the SEF prior to issuing the confirmation;
- CFTC Rules 37.1000, 37.1001 and 45.2(a), which require that SEFs maintain such documents as records; and
- CFTC Rule 45.3(a), which requires the reporting of swap creation data.
Commentary / Bob Zwirb
When this relief was originally sought in 2014, we observed that the request appeared to have arisen from "the ambiguities related to the highly complicated nature of the CFTC's SEF confirmation and reporting requirements."Two and a half years later, little seems to have changed, with outside parties seeking a further extension "[d]ue to the complexity of the issue," and SEFs' inability to develop "a practicable and cost-effective method" for dealing with "every underlying previously-negotiated freestanding agreement between counterparties."As with previous forms of relief granted and then extended on a serial basis, this one was granted just one week prior to the previous extension's scheduled expiration. Needless to say, regulation by punting is not optimal for market participants.Here the relief will expire on "the earlier of (1) March 31, 2018, or (2) the effective date of revised Commission regulations that establish a permanent SEF confirmation solution."Let's hope that it is the latter.
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