CFTC Issues No-Action Letter on the Treatment of Swap Transactions by Certain Non-U.S. Persons for Purposes of Making Calculations under the Swap Dealer Definition (CFTC Letter 13-64)

The CFTC's Division of Swap Dealer and Intermediary Oversight ("DSIO") issued a no-action letter that provides relief for certain non-U.S. persons that are not themselves guaranteed or conduit affiliates of U.S. persons with respect to counting, toward their de minimis calculation, a swap with a foreign person that is itself a guaranteed affiliate and that is intending to register as a swap dealer, subject to conditions.

The relief provided in the letter states that DSIO will not recommend that the Commission take an enforcement action against any non-U.S. person that is not a guaranteed or affiliate conduit of a U.S. person for failure to include, in its de minimis calculations, for purposes of the swap dealer definition under CFTC Rule 1.3(ggg)(4) ("De Minimis Exception"), a swap executed with a guaranteed affiliate of a U.S. person on or before the date such non-U.S. person is required to register with the Commission as a swap dealer under CFTC Rule 1.3(ggg)(4)(iii), provided that:

1. the guaranteed affiliate is affiliated with a swap dealer registered with the Commission;
2. the guaranteed affiliate has crossed the de minimis threshold; and
3. the guaranteed affiliate represents in writing, with a copy thereof delivered to DSIO no later than 48 hours after execution of such swap using the email address [email protected], that:
   (a) such guaranteed affiliate intends to register as a swap dealer; and(b) the date on which its registration is required under CFTC Rule 1.3(ggg)(4)(iii).

See: CFTC No-Action Letter 13-64.