CFTC No-Action Relief Permitting Clearing Agencies as Counterparties on Repos (with Lofchie Comment)

The CFTC Division of Clearing and Risk issued a no-action letter under CFTC Rule 1.25 (Investment of Customer Funds). In the letter, the Division confirmed that it did not object to the FCM's entering into repurchase and reverse repurchase transactions (collectively, "repos") under CFTC Rule 1.25 where the counterparty to the repo is an SEC-registered clearing agency.

Cross-Reference(s): CFTC Rule 1.25(d)(2) [Investment of Customer Funds]

Lofchie Comment: Essentially, the no-action corrects what I assume was an inadvertent omission in Rule 1.25, which is the omission of registered clearing agencies from the list of permitted counterparties.

View No-Action Letter 12-34.