The CFTC staff granted Brexit-related no-action relief intended to preserve the status quo following Brexit.
In Letter 19-08, the CFTC Division of Market Oversight ("DMO") and the Division of Swap Dealer and Intermediary Oversight ("DSIO") provided relief that elements of pre-existing CFTC relief for EU entities will continue to be available for UK entities following Brexit. In particular, the letter covers: (i) swap dealer comparability determinations for (a) entity-level requirements, (b) transaction-level requirements and (c) margin requirements; and (ii) exemptive relief from swap execution facility registration for multilateral trading facilities. The relief distinguishes between a "no-deal" and "soft" Brexit, and each case is time-limited.
In Letter 19-09, DMO and DSIO, along with the Division of Clearing and Risk, provided time-limited no-action relief to extend certain current staff no-action relief covering EU-related matters. The letter provides that, in the event of either a no-deal or soft Brexit, relevant existing relief will apply to the the UK, its laws and regulators, and UK businesses to the same extent as applies to the EU, its laws and regulators and EU businesses. In particular, the letter covers:
- Letter 12-70 (relief from introducing broker status for certain swap dealer employees);
- Letter 13-45 (relief for swap dealers subject to certain EU risk mitigation requirements);
- Letter 17-64 (time-limited relief for certain reporting requirements);
- Letter 17-66 (relief from the "outward-facing" condition for the inter-affiliate clearing exception); and
- Letter 17-67 (extension of relief from clearing for swaps between certain affiliates).
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