CFTC Grants Temporary Relief to Shanghai Clearinghouse from DCO Registration

The CFTC Division of Clearing and Risk granted time-limited no-action relief to the Shanghai Clearing House ("SHCH") from registration as a derivatives clearing organization ("DCO") pursuant to Section 5b(a). The relief allows the SHCH to clear certain swaps temporarily for its U.S. clearing members on a proprietary basis, while also allowing more time for the SHCH to prepare its petition for exemption and for the CFTC to review and assess that petition.

The relief is granted subject to certain conditions, including reporting requirements, and shall expire on the earlier of (i) May 31, 2017, or (ii) the date on which the CFTC exempts the SHCH from registration as a DCO under Section 5b(h) of the CEA.

CFTC Chair Timothy Massad expressed support for the relief as an "interim measure," which he described as "an important step" in enhancing "cooperation and dialogue between the CFTC and both the [People's Bank of China] and the China Securities Regulatory Commission."

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