CFTC Issues No-Action Relief to Certain End Users from Trade Option Filing Requirement (CFTC Letter 16-10)

The CFTC issued no-action time-limited relief to certain end users from a "trade option" filing requirement.

Under CFTC Rule 32.3(b)(2), counterparties to trade options that are not required to be reported to a swap data repository must submit a Form TO filing by March 1 following the end of the calendar year during which they entered into one or more unreported trade options. Last year, the CFTC proposed amendments to Commission Rule 32.3 in order to allow a market participant that is neither a swap dealer nor a major swap participant (a "Non-SD/MSP") to forgo reporting otherwise unreported trade options on a Form TO, and to delete Form TO from Appendix A to Part 32 of its rules. See Trade Options, Notice of Proposed Rulemaking, 80 FR 26200 (May 7, 2015).

The CFTC is considering the finalization of the proposed Trade Options Rule. During this time, the CFTC Division of Market Oversight will not recommend that the CFTC take enforcement action against a market participant that is a Non-SD/MSP for failing to report on Form TO, by April 1, 2016, its otherwise unreported trade options entered into during 2015. Additionally, the relief provided by No-Action Letter 13-08 will continue to apply to a trade option counterparty that is a Non-SD/MSP as long as the Non-SD/MSP reports its otherwise unreported trade options for 2015 on Form TO by April 1, 2016.