CFTC Issues No-Action Letter Extending Relief to SGX-DC and Its Clearing Members (CFTC Letter 14-41)

The CFTC Division of Clearing and Risk ("DCR") issued a time-limited no-action letter to the Singapore Exchange Derivatives Clearing Limited ("SGX-DC"), a registered derivatives clearing organization regarding registration requirements pursuant to CEA Section 4d(f)(1) ("Dealing by Unregistered Futures Commission Merchants or Introducing Brokers Prohibited; Duties in Handling Customer Receipts; Rules to Avoid Duplicative Regulations").

In the letter, DCR states it will not recommend enforcement action against SGX-DC's clearing members for failing to comply with CEA Section 4d(f)(1) requirements regarding futures commission merchant ("FCM") registration requirements in carrying existing positions and accepting for clearing offsetting positions in certain commodity swaps for U.S. customers or customers of FCMs that clear through an FCM omnibus customer account; or SGX-DC for engaging in activities related to its clearing members carrying and accepting for clearing such customer positions.

The DRC stated that the no-action relief is an extension that was granted to SGX-DC and its clearing members in December 2013. The relief in letter 14-41 is modified, however, with respect to clearing for customers of FCMs that clear through an FCM omnibus customer account.

The relief will expire on April 30, 2014.

See: CFTC Letter 14-41.Related news: CFTC Grants No-Action Relief to SGX-DC and Its Clearing Members (CFTC Letter 13-74) (with Lofchie Comment) (December 20, 2013).