Release Number 6481-12
December 21, 2012
CFTC’s Office of the General Counsel Issues Time-Limited, No-Action Relief for Compo Equity Total Return Swaps
Washington, DC – The Commodity Futures Trading Commission’s (Commission) Office of the General Counsel (OGC) today issued a no-action letter providing time-limited relief from requirements arising from the Commission’s joint interpretation with the Securities and Exchange Commission that compo equity total return swaps are mixed swaps.
The no-action letter provides that OGC will not recommend that the Commission commence enforcement action against any person in connection with any failure of such person to comply with any provision of the Dodd-Frank Act or the rules promulgated thereunder (other than those relating to the Commission’s anti-fraud and anti-manipulation authority) to the extent such failure arises solely because such person treats a compo equity total return swap solely as a security-based swap and not as a mixed swap. The no-action relief is subject to, among others, the following conditions: (i) market participants are required to act reasonably and in good faith in progressing to full compliance with all Commodity Exchange Act requirements and Commission regulations applicable to mixed swaps with respect to compo equity total return swaps by July 1, 2013; (ii) affected persons are also required to come into full compliance as the technical and operational issues preventing timely compliance have been resolved, even if such resolution occurs prior to July 1, 2013; (iii) during the pendency of the no-action period, and prior to reporting compo equity total return swap transaction data records to a swap data repository, affected persons must retain records with respect to all covered transactions and make such records available to the Commission for inspection and production immediately upon request to the extent provided in and in accordance with applicable law, rule, or regulation.
Last Updated: December 21, 2012