CFTC No-Action Relief from Clearing Swaps Resulting from Multilateral Portfolio Compression Exercises (CFTC Letter No. 13-01)

The CFTC's Division of Clearing and Risk (Division) issued a no-action letter that provides relief from required clearing for a limited set of swaps that are generated as part of a multilateral portfolio compression exercise. The Division will not recommend that the CFTC take enforcement action against any person for failing to clear (1) swaps that are amended in order to reduce notional value as part of a multilateral portfolio compression exercise and (2) new swaps that are entered into to replace the original swaps as a result of a multilateral portfolio compression exercise, provided that the original swaps were executed prior to the date on which the counterparties must begin complying with the clearing requirement (and therefore, not required to be cleared). Both the multilateral portfolio compression exercise and the resulting amended or replacement swaps must meet a variety of conditions specified in the letter.

Click here to view letter in full (links externally to CFTC website).