CFTC Revises LIBOR Transition No-Action Letters

The CFTC issued revised no-action letters regarding the financial industry's transition away from LIBOR.

The Division of Clearing and Risk, Division of Market Oversight, and the Market Participants Division of the CFTC released revised no-action letters that the CFTC indicated were intended to address the current expected cessation dates of various LIBORs (in particular, that USD LIBOR will be provided through June 30, 2023).

The series of revised no-action letters are in reference to the date confirmation regarding 2023 USD LIBOR settings. The following revisions and extensions were made:

• Letter No. 21-26revises Letter No. 20-23, addressing various requirements applicable to swap dealers and de minimis dealers, including business conduct, documentation, and de minimis counting;
• Letter No. 21-27revises Letter No. 20-24, addressing matters relating to the trade execution requirement under CEA Section 2(h)(8); and
• Letter No. 21-28revises Letter No. 20-25, in connection with clearing swaps.

All three of the newly issued no-action letters will remain in effect until June 30, 2023, for covered swaps that reference 2023 USD LIBOR settings.

Commentary

The CFTC notes that the revised letters come in response to a request from the Alternative Reference Rates Committee. The letters do not appear to contain material changes beyond the relevant date extensions.

Primary Sources

1. CFTC No-Action Letter 21-26: Revised No-Action Positions to Facilitate an Orderly Transition of Swaps from Inter-Bank Offered Rates to Alternative Benchmarks
2. CFTC No-Action Letter 21-27: Extension of Certain Staff No-Action Relief from the Trade Execution Requirement to Facilitate an Orderly Transition from Inter-Bank Offered Rates to Alternative Risk-Free Rates
3. CFTC No-Action Letter 21-28: Revised Staff No-Action Relief from the Swap Clearing Requirement for Amendments to Legacy Uncleared Swaps to Facilitate an Orderly Transition from Inter-Bank Offered Rates to Alternative Risk-Free Rates
4. CFTC Press Release: CFTC Staff Revises No-Action Letters Regarding Market Participants Transitioning from LIBOR

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