Non-U.S. Exchanges - Comments on ET Guidance

LCH.Clearnet: LCH offered its strong support of the policy goals underpinned by the proposed guidance and the statutory provisions contained in Title VII of the Dodd-Frank Act, but made several requests, including that the Commission clarify the reach of the CFTC's clearing mandate when clearing occurs on a registered DCO, and that the Commission reconcile statements in the proposed guidance on the applicability of the swap data repository reporting rules with the actual text of those rules in situations in which two non-U.S. persons (neither of whom is required to register as a swap dealer or major swap participant) enter into a swap outside the U.S. and the swap is cleared on a registered DCO.

London Metal Exchange Limited (LME): The General Counsel Head of Enforcement of the LME submitted a comment letter to CFTC recommending that the Commission adopt the unequivocal position that the clearing of a swap, entered into by any counterparty, by a derivatives clearing organization that is subject to a comparable regulatory regime will satisfy the clearing requirements of the DFA as to both the counterparties and the DCO, regardless of whether the counterparties are U.S. swap dealers and/or U.S. Persons (as defined in the Proposed Interpretive Guidance) or affiliates of U.S. Persons. In addition, LME urged the Commission to adopt the position that clearing such swaps on a DCO which is affiliated with a registered Foreign Board of Trade and satisfies the requirements contained in the FBOT rules applicable to such a DCO will be deemed conclusively to be subject to a comparable regulatory regime without further action required.

Additional Letters: Available here.

Cross-Reference(s): Dodd-Frank Act Title VII.

View Release in full here (links externally to CFTC website).