September 21, 2022

CFTC Grants No-Action Relief from DCO Registration Requirements to Taiwan Futures Exchange

The CFTC Division of Clearing and Risk granted Taiwan Futures Exchange's ("TAIFEX") request for no-action relief from the requirement to register as a derivatives clearing organization ("DCO") pursuant to CEA Section 5b(a) ("Derivatives clearing organizations").

Under the relief granted by the no-action letter, TAIFEX would be temporarily permitted to "clear certain swaps for the proprietary trades of TAIFEX clearing members that are U.S. persons or affiliates of U.S. persons while its application for exemption from DCO registration is pending." The CFTC stated that the relief does not apply to customer clearing and should not be interpreted as a permanent exemption for TAIFEX from registration as a DCO. The CFTC also stated that the relief is contingent upon TAIFEX demonstrating its ability to comply with the conditions set forth in the no-action letter.

The no-action letter will remain in effect until the earlier of (i) September 15, 2023 or (ii) the date on which the CFTC grants TAIFEX's application for exemption from registration as a DCO under CEA Section 5b(h) ("Derivatives clearing organizations — Exemptions").

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