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CFTC Extends Registration Relief to Chinese DCO

The CFTC Division of Clearing and Risk extended previously granted no-action relief exempting Shanghai Clearing House ("SHCH") from the requirement to register as a derivatives clearing organization ("DCO"). The relief was originally granted by CFTC Letter 16-56 (then extended by CFTC Letters 17-26, 17-62, and 18-04). The relief allows SHCH to clear certain swaps that are subject to mandatory clearing in China and are proprietary trades of SHCH clearing members that are U.S. persons or the affiliates of U.S. persons (although there are not currently any such SHCH members).

The CFTC will not grant a permanent exemption from registration requirements to SHCH until the CFTC executes a Memorandum of Understanding with the People's Bank of China, which is SHCH's principal home country regulator.

The relief last granted to SHCH was scheduled to expire on February 28, 2019. It is now extended until the earlier of (i) July 31, 2021 or (ii) the date on which the CFTC grants SHCH a permanent exemption from DCO registration.

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