CFTC Extends No-Action Relief for MAT/Futures Package Transactions

The CFTC’s Division of Market Oversight ("DMO") extended no-action relief with respect to trade execution and related requirements for swaps executed as part of package transactions that include both a made available to trade ("MAT") swap and a futures contract. 

The extension follows a joint ISDA/SIFMA request to continue no-action positions first issued in CFTC Letter 14-12 and most recently extended in CFTC Letter 22-15. The trade associations argued that practical challenges still prevent swap execution facilities ("SEFs") and designated contract markets ("DCMs") from fully complying with the Commodity Exchange Act’s ("CEAs") trade execution requirement and related CFTC rules when facilitating MAT/futures package transactions.

Under the latest letter, DMO extended no-action relief for MAT/Futures package transactions, covering (i) the CEA Section 2(h)(8) trade execution requirement for the swap component, and (ii) CFTC Rules 37.3(a)(2) ("Requirements and procedures for registration"), 37.9 ("Methods of execution for required and permitted transactions), and CEA Section 5(d)(9), which establish execution method and order book requirements for SEFs and DCMs. DMO explained that the extension will allow the CFTC to continue evaluating permanent solutions, including potential rulemaking.

DMO said the relief will stay in effect until a future CFTC rule or order addressing MAT/futures package transactions takes effect.