CFTC No-Action Relief and Request for Comment for Transaction-Level Requirements of Non-U.S. Swap Dealers

9 January 2014
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Key takeaways:

  • In November 2013, the CFTC issued an advisory letter stating that a non-U.S. swap dealer regularly using personnel or agents located in the United States to arrange, negotiate or execute a swap with a non-U.S. person generally will be required to comply with the Transaction-Level Requirements set forth in Title VII of the Dodd-Frank Act (such as clearing and swap processing, portfolio reconciliation and compression, real-time reporting, trade confirmation, daily trading records and business conduct standards).
  • Following the concerns raised by various market participants regarding the advisory letter, the CFTC has issued no-action letters granting temporary relief (now through September 15, 2014) to non-U.S. swap dealers from compliance with (1) applicable Transaction-Level Requirements with respect to swaps with non-U.S. persons that are not swap dealers and are not guaranteed or conduit affiliates of a U.S. person and (2) applicable Transaction-Level Requirements other than multilateral portfolio compression and swap trading relationship documentation requirements for swaps with non-U.S. swap dealers.
  • In addition, the CFTC has also issued a request for comment to solicit comments on all aspects of the November 2013 advisory letter. Comments must be received by March 10, 2014.