CFTC Revises LIBOR Transition No-Action Letters
The CFTC issued revised no-action letters regarding the financial industry's transition away from LIBOR.
The Division of Clearing and Risk, Division of Market Oversight, and the Market Participants Division of the CFTC released revised no-action letters that the CFTC indicated were intended to address the current expected cessation dates of various LIBORs (in particular, that USD LIBOR will be provided through June 30, 2023).
The series of revised no-action letters are in reference to the date confirmation regarding 2023 USD LIBOR settings. The following revisions and extensions were made:
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Letter No. 21-26 revises Letter No. 20-23, addressing various requirements applicable to swap dealers and de minimis dealers, including business conduct, documentation, and de minimis counting;
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Letter No. 21-27 revises Letter No. 20-24, addressing matters relating to the trade execution requirement under CEA Section 2(h)(8); and
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Letter No. 21-28 revises Letter No. 20-25, in connection with clearing swaps.
All three of the newly issued no-action letters will remain in effect until June 30, 2023, for covered swaps that reference 2023 USD LIBOR settings.
Commentary
The CFTC notes that the revised letters come in response to a request from the Alternative Reference Rates Committee. The letters do not appear to contain material changes beyond the relevant date extensions.