CFTC Issues Conditional No-Action Relief with Respect to Swaps Trading on Multilateral Trading Facilities on European Exchanges (CFTC Letter 14-46)
The CFTC Divisions of Market Oversight ("DMO") and Swap Dealer and Intermediary Oversight ("DSIO") jointly issued CFTC No-Action Letter 14-46, which replaces No-Action Letter 14-16.
After the CFTC issued Letter 14-16, its staff members continued to engage in a dialogue with staff members of the European Commission and the Financial Conduct Authority of the United Kingdom, as well as with facility operators and market participants, concerning certain terms and conditions in Letter 14-16.
As a result of these conversations, the CFTC's staff issued No-Action Letter 14-46 to clarify positions taken in the previous no-action letter. The clarifications include the following:
- an MTF must report all swap transactions to a CFTC-registered or provisionally registered swap data repository as if it were a SEF, in compliance with Part 43 ("Real-Time Public Reporting") and Part 45 ("Swap Data Recordkeeping and Reporting Requirements) of CFTC Rules;
- an MTF must certify that it is subject to and compliant with regulations that require all MTF participants to consent to the MTF's jurisdiction;
- qualifying MTFs must submit monthly reports to CFTC staff summarizing levels of participation and volume by U.S. persons; and
- reporting obligations must be fulfilled by counterparties to swap transactions executed on or pursuant to the rules of a qualifying MTF.
The CFTC noted that the issuance of No-Action Letter 14-46 was preceded by the issuance of CFTC No-Action Letter 14-31, which provides additional time for MTFs to comply with the conditions for obtaining relief under Letter 14-46. The short-term no-action relief provided by Letter 14-31 will expire on May 14, 2014.
See: No-Action Letter 14-46; Press Release.Related news:CFTC Issues No-Action Relief for Swaps Trading on Multilateral Trading Facilities Overseen by Competent Authorities Designated by EU Member States (CFTC Letter 14-31) (March 21, 2014); CFTC Releases Joint Statement with EC and Two No-Action Letters for European Exchanges (CFTC Letters 14-15 and 14-16) (with Lofchie Comment) (February 12, 2014).