The CFTC Division of Market Oversight (the "Division") extended no-action relief from the trade execution requirement under CEA S ection 2(h)(8 ) ("Commission Review of Swaps for Clearing") for swaps between certain affiliated counterparties.
CFTC Letter 20-45 extends relief provided under CFTC Letter 17-67 (see previous coverage here) and is intended to bridge the gap between the expiration of CFTC Letter 17-67 on December 31, 2020 and the effective date of two new exemptions that codify the letter's no-action relief. The rule will go into effect 30 days after its publication in the Federal Register.
As previously covered, the first exemption pertains to swaps that are not required to be cleared under the exemptions or exceptions of CFTC Rules Part 50 ("Clearing Requirement and Related Rules"). The second exemption codifies the no-action relief under CFTC Letter 17-67, which is itself an extension CFTC Letters 16-80, 15-62, 14-136 and 14-26, and is applicable to cleared swaps that are entered into by certain eligible affiliate counterparties, regardless of the affiliates' eligibility for the CFTC Rule 50.52 ("Exemption for swaps between affiliates") inter-affiliate clearing exemption.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
