Font Size: AAA // Print // Bookmark

RELEASE: pr7636-17

  • October 31, 2017

    CFTC’s Division of Market Oversight Extends No-Action Relief from the Execution Requirement for Swaps in Certain Types of Package Transactions

    Washington, DC — The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (Division) today extended no-action relief for swaps executed as part of a package transaction in the categories described below. This extension will enable the Division to continue to assess the appropriate response for applying the trade execution requirement to swaps in certain types of package transactions. This no-action relief shall commence on the date of issuance of this letter and expire on November 15, 2020 at 11:59 pm (EDT).

    The summary of the relief provided, as explained below, is intended to be used for reference only.

    Package Transaction Category

    Relief Expiration

    MAT/New Issuance Bond: At least one individual swap component is subject to the trade execution requirement and at least one individual component is a bond issued and sold in the primary market.

    Relief from CEA section 2(h)(8). Under this relief, the swap components subject to the trade execution requirement are not required to be executed on a SEF or DCM.

    Relief from CFTC Regulation § 37.9 and CEA section 5(d)(9), which permits a SEF or DCM to offer any method of execution for the swap components.

    Relief from CFTC Regulation § 37.3(a)(2), which permits SEFs to not offer an Order Book as a minimum trading functionality for the swap components.

    MAT/Futures: At least one individual swap component is subject to the trade execution requirement and all other components are contracts for the purchase or sale of a commodity for future delivery, i.e., futures contracts. This category may include:

      o MAT swap v. Treasury futures

      o MAT swap v. Eurodollar futures

    Relief from CEA section 2(h)(8). Under this relief, the swap components subject to the trade execution requirement are not required to be executed on a SEF or DCM.

    Relief from CFTC Regulation § 37.9 and CEA section 5(d)(9), which permits a SEF or DCM to offer any method of execution for the swap components.

    Relief from CFTC Regulation § 37.3(a)(2), which permits SEFs to not offer an Order Book as a minimum trading functionality for the swap components.

    MAT/Non-MAT (Uncleared): At least one of the swap components is subject to the trade execution requirement and at least one of the components is a CFTC swap that is not subject to the clearing requirement. This category may include:

      o MAT swap v. swaption

      o MAT swap v. uncleared credit default swap

    Relief from CFTC Regulation § 37.9 and CEA section 5(d)(9), which permits a SEF or DCM to offer any method of execution for the swap components.

    Relief from CFTC Regulation § 37.3(a)(2), which permits SEFs to not offer an Order Book as a minimum trading functionality for the swap components.

    MAT/Non-Swap Instruments: At least one of the swap components is subject to the trade execution requirement and at least one of the components is not a swap. This category excludes U.S. Dollar Swap Spreads, MAT/Futures, MAT/Agency MBS, and MAT/New Issuance Bond. This category may include:

      o MAT swap v. single-name credit default swap

      o MAT swap v. bond (secondary market transaction)

    Relief from CFTC Regulation § 37.9 and CEA section 5(d)(9), which permits a SEF or DCM to offer any method of execution for the swap components.

    Relief from CFTC Regulation § 37.3(a)(2), which permits SEFs to not offer an Order Book as a minimum trading functionality for the swap components.

    MAT/Non-CFTC Swap: At least one of the swap components is subject to the trade execution requirement and at least one of the components is a swap over which the CFTC does not have exclusive jurisdiction (e.g., a mixed swap).

    Relief from CFTC Regulation § 37.9 and CEA section 5(d)(9), which permits a SEF or DCM to offer any method of execution for the swap components.

    Relief from CFTC Regulation § 37.3(a)(2), which permits SEFs to not offer an Order Book as a minimum trading functionality for the swap components.

    Last Updated: October 31, 2017