CFTC Extends Relief for Swaps Cleared on Non-US DCOs

The CFTC's Division of Market Oversight ("DMO") extended no-action relief excusing certain swap counterparties from specific Part 45 swap data reporting obligations when clearing swaps through certain non-US derivatives clearing organizations ("DCOs").

The relevant DCOs operate under exemptive orders or no-action letters rather than being subject to full CFTC registration and are based in Australia, Japan, Korea, Hong Kong and Taiwan.  

As previously covered, CFTC Letter 25-18 renews no-action relief previously extended under CFTC Letter 22-18 (initially provided in 22-05, 16-85, 18-03 and 21-12) to clearinghouses that are not registered with the CFTC as DCOs pursuant to either (i) CFTC exemptive orders or (ii) CFTC Division of Clearing and Risk no-action relief. 

The DMO said the relief was appropriate because the relevant DCOs are subject to alternative reporting obligations under their exemptive or no-action terms, and the CFTC's rules would otherwise result in duplicative or conflicting reporting requirements for counterparties. The DMO also clarified that under this relief, swaps cleared through the foreign DCOs may be reported as "cleared" in relevant data fields.

The DMO said the no-action relief will remain in effect until the earlier of (i) expiration or revocation of the exemptive order or no-action letter for the applicable DCO or (ii) CFTC action that terminates the no-action position.