CFTC No-Action Letter 13-52: LCH.Clearnet Ltd and Clearing Members

The CFTC Division of Clearing and Risk issued a time-limited no-action letter stating that it will not take enforcement action against LCH.Clearnet Ltd, a derivatives clearing organization registered under CEA Section 5b ("Derivatives Clearing Organizations"), or LCH's clearing members, for clearing certain swaps executed on, or subject to the rules of, designated contract markets or swap execution facilities.The relief will be effective until either March 31, 2014, or the date upon which the CFTC approves or denies LCH's application to clear swaps executed on a regulated market. According to the letter from the CFTC, LCH currently only has authority to clear swaps that are executed "OTC" and, thus, does not have authority to clear swaps executed on a market such as a SEF. Accordingly, the no-action relief is necessary to allow LCH to clear exchange-traded swaps. The letter does not indicate anything more substantive to the need for the exemptive relief than this technicality.

See: CFTC No-Action Letter 13-52; CFTC Press Release.