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CFTC Seeks Comment on IBOR-Related Swap Clearing Requirement's picture
Commentary by Nihal Patel

The CFTC requested information and comment on potential modifications to CFTC Rule 50.4 ("Classes of Swaps Required to Be Cleared") to address benchmark reform.

The CFTC is seeking information on, among other things, the ability of derivatives clearing organizations ("DCOs") to offer clearing services for a variety of currency and rate transactions, including certain non-U.S. currencies and USD LIBOR Rates. The CFTC requested that DCOs file a submission pursuant to CFTC Rule 39.5 ("Review of Swaps for Commission Determination on Clearing Requirement") for any swaps that are not currently subject to the clearing requirement.

While the CFTC requested comment in general on the swap clearing requirement and any other rules that may be impacted by the IBOR transitions, it is seeking comment specifically on (i) information on alternative reference rate-referencing swaps and whether to impose a clearing mandate for such swaps, (ii) documentation requirements for new swap products, (iii) swap classifications under the swap clearing requirement and (iv) cost-benefit factors to consider.

Comments on the request must be submitted within 60 days of its publication in the Federal Register.


The text of the CFTC request is primarily descriptive. It highlights the history of the clearing requirement and ongoing transition efforts away from IBOR. The questions themselves are broad in scope and suggest the CFTC may be taking the occasion of benchmark reform to reassess a number of questions around what swaps are or should be subject to mandatory clearing.

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