December 20, 2013
Washington, DC — The Commodity Futures Trading Commission’s (CFTC or Commission) Division of Market Oversight (DMO) today announced the issuance of a no-action letter providing conditional time-limited relief for Australian-based trading platform Yieldbroker Pty Limited (Yieldbroker). DMO will not recommend that the Commission take enforcement action against Yieldbroker for failure to register as a swap execution facility (SEF) under section 5h(a)(1) of the Commodity Exchange Act (Act) or Commission Regulation 37.3(a)(1), or against any market participants for use of, or other relationships with, Yieldbroker, for period expiring on the earlier of (1) May 15, 2014, or (2) the date upon which Yieldbroker achieves SEF registration status. This no-action letter will supersede all terms and conditions of CFTC Letter No. 13-67, which was issued on October 30, 2013.
Yieldbroker is licensed as an exchange under an Australian Market License (AML) and is regulated by the Australian Securities and Investment Commission (ASIC). Yieldbroker operates a multilateral trading platform in Australia which brings together multiple third-party buying and selling interests in swaps. Yieldbroker currently permits direct access to U.S. persons to transact in swaps on its platform.
On September 27, 2013, Yieldbroker provided DMO with a confidential draft SEF application, which DMO is in the process of reviewing. Yieldbroker, DMO and ASIC staff are engaged in discussions regarding an arrangement whereby Yieldbroker would register with the Commission as a SEF while maintaining its AML. Such an arrangement would include Yieldbroker’s provision of an order book, a sufficient level of pre- and post-trade price transparency, non-discriminatory access by market participants, and an appropriate level of self-regulatory oversight. In addition, Commission staff and ASIC staff are developing an arrangement that provides for information sharing and other cooperation with respect to Yieldbroker.
As detailed in the letter, Yieldbroker’s time-limited no-action relief is contingent on Yieldbroker’s satisfaction of certain conditions throughout the time-limited relief period. DMO believes that predicating Yieldbroker’s relief upon satisfaction of these conditions will help foster pre- and post-trade transparency on, and impartial access to, Yieldbroker’s trading platform during the relief period while it works toward achieving SEF registration status.
Last Updated: December 20, 2013