CFTC releases no-action draft for Dodd-Frank relief

The CFTC has released a draft of a no-action letter intended to supplement the recent proposed order regarding Dodd-Frank relief. The letter addresses three specific Dodd-Frank provisions that, while they fall under the Category 2 exemption, may not actual qualify for the extension proposed in the order.

The affected provisions are:

  • Section 742(c) amends Commodities Exchange Act (“CEA”) Section 4s(1) to create segregation requirements on collateral collected by swap dealers and major swap participants for uncleared swaps.
  • Section 725(c) amends CEA section 5b(a) to prohibit derivatives clearing organizations (“DCOs”) from clearing swaps unless they are registered with the Commission.
  • Section 731 creates a new CEA section 4s(k) outlining the duties and designation of a swap dealer and major swap participant chief compliance officers (“CCOs”).

The Division of Clearing and Intermediary Oversight (“DCIO”) and the Division of Market Oversight¬† (“DMO”) state in the no-action draft that they “will not recommend that the Commission commence an enforcement action against any person for failure to comply with the above referenced provisions” between July 16th and the expiration of the order of relief on Decemebr 31, 2011.

Read more about the proposed CFTC Dodd-Frank no-action letter.

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