CFTC Proposes Amendments to SEF Confirmation Rule
The CFTC proposed amendments to rules governing confirmation of transactions on swap execution facilities ("SEFs").
The proposal, which is intended to codify no-action relief originally granted in CFTC Letter No. 17-17, would amend CFTC Rule 37.6 ("Enforceability") as well as a conforming change to Rule 23.501 ("Swap Confirmation"). The proposal would address technological and practical issues with obtaining copies of relationship documentation between persons executing swaps on a SEF. In addition, the amendments would address technical problems with the timing aspects of the rules (e.g., by making confirmation required as soon as technologically practicable after execution, rather than "at the same time as execution").
Comments on the proposed amendments must be submitted within 60 days of the proposal’s publication in the Federal Register.
Statements
- CFTC Commissioner Christy Goldsmith Romero. Ms. Romero cautioned that the CFTC should be careful about proposing rulemakings that only codify no-action relief, especially when the relief has been extended for years.
- CFTC Commissioner Kristin N. Johnson. Ms. Johnson said the proposed amendments address "a decade of concerns voiced by SEFs."
Commentary
Changes to the SEF confirmation rules are long overdue and would effectively maintain the status quo under the no-action relief. The rulemaking is a bit of a victory (better late than never!) for CFTC Commissioner Summer Mersinger, who repeatedly criticized the CFTC approach to this issue, most notably by making statements related to it in connection with the registration of a handful of SEFs.
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