CFTC Slowing Down?: More Deferrals for Swaps, Business Conduct Rules

CFTC Slowing Down?: More Deferrals for Swaps, Business Conduct Rules

The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) yesterday issued a time-limited no-action letter that exempts floor trading from counting toward the notional amount of swaps, which could lead to registration requirements and fees for a given entity. The relief expires on July 1, 2013:

More Deferrals and No-Action Letters?

The new delays come as the CFTC is balancing the implementation of recently approved Dodd-Frank Rules. The Commission has signed 51 “no action” letters so far this year, compared with eight last year and nine in 2010, according to the CFTC website.

From the CFTC Statement

“During that limited time period, the Division will not recommend that the Commission take an enforcement action against an entity for failure to include, in its calculation of the aggregate gross notional amount of swaps connected with its swap dealing activity” the CFTC’s no-action letter stated.

The exemption is effective for entities today, provided that:

(1) the entity does not have a registered swap dealer affiliate;

(2) the entity entered into the swap using proprietary funds for its own account; and

(3) the entity complies with the requirements set forth in Commission Regulations

In order to obtain the relief granted by the no-action letter, an entity must file a claim with the DSIO by the end of the year.

CFTC Establishes Compliance Date for Business Conduct and Documentation Rules

The CFTC also approved yesterday interim final rules yesterday. Approved via seriatim in a 5-0 vote, the rules apply for:

Swap dealers (SDs) and major swap participants (MSPs) who would otherwise be required to comply with certain business conduct and documentation requirements found in provisions of subpart F, subpart H, and subpart I to part 23 of the Commission’s Regulations.

In particular, requirements for portfolio reconciliation and swap trading relationship documentation have been deferred until July 1, 2013. Additional rules are deferred until May 1, 2013.

See the statement here.

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About The Author


Elan Mendel

Elan Mendel

Elan Mendel is an associate with Shipkevich PLLC, and has done registration, compliance, and enforcement defense work for commodities, futures and forex firms registered with the CFTC and NFA as FCMs, RFEDs, and others. Elan also specializes in domestic and cross-border insolvency issues.

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