CFTC Issues No-Action Relief to Applicant Seeking Temporary Registration as an SEF (CFTC Letter 13-63) (with Lofchie Comment)
The CFTC Division of Market Oversight ("DMO") issued a no-action letter providing time-limited relief for LatAm SEF, LLC ("LatAm"). DMO will not recommend that the CFTC take action against LatAm for failure to register as a swap execution facility ("SEF") under CEA Section 5h(a)(1) or CFTC Rule 37.3(a)(1), or against any market participants for use of, or other relationships with, LatAm, based on LatAm's failure to register as a SEF.
LatAm currently operates a U.S.-based multilateral trading platform which brings together multiple third-party buying and selling interests in Mexican Peso interest rate swaps.
On September 25, 2013, LatAm submitted to the CFTC an application for SEF registration. In a letter, dated October 2, 2013, LatAm requested that DMO not recommend that the CFTC take enforcement action against LatAm for failure to register as an SEF. As part of its request, LatAm represented that it would, during the pendency of its no-action relief:
- comply with all of the substantive requirements applicable to SEFs under the Act and the CFTC's regulations, and
- comply with any CFTC staff-issued guidance and no-action relief applicable to SEFs issued on or after September 26, 2013.
This no-action relief will commence on October 17, 2013, and expire upon the earlier of: (1) the date on which the CFTC grants or denies temporary SEF registration to LatAm, or (2) November 19, 2013, at 12:01 a.m. EST.
Lofchie Comment: This further demonstrates the lack of any reason for the arbitrary October 2nd date.
See: CFTC No-Action Letter 13-63.