CFTC Extends No-Action Relief for Certain Inter-Affiliate Swaps from Trading and Clearing Requirements

The CFTC Divisions of Clearing and Risk ("DCR") and Market Oversight ("DMO") granted extensions of previously issued no-action relief for certain inter-affiliate transactions.

Letter 15-62 extends relief, which was granted previously in Letter 14-26 and extended by Letter 14-136, from the trade execution requirement for swaps between affiliates even when the conditions in CFTC Rule 50.52(b)-(d) are not satisfied. The relief was scheduled to end this year, but the new letter extends it through December 16, 2016. The requestors asked the CFTC for permanent relief originally, but the DMO said that the additional time would allow for the continued assessment of (1) whether applying trade execution requirements to inter-affiliate trades would "promote pre-trade price transparency" and (2) whether to establish a permanent solution to the issue.

Letter 15-63 extends the relief that was granted by Letter 14-135 for transactions with affiliates in foreign jurisdictions. The relief allows for reliance on the alternative compliance frameworks in CFTC Rule 50.52(b)(4)(ii)-(iii) (relating to the clearing of "outward-facing" swaps) until the earlier of: (i) December 31, 2016 or (ii) with respect to a particular jurisdiction, 60 days after the date on which the CFTC announces that it has made a comparability determination as described in Regulation 50.52(b)(4)(i).