Release Number 7905-19

March 29, 2019

CFTC Staff Issues No-Action Relief to Facilitate Prime Brokerage Activities on SEFs

Washington, DC — The Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today announced it will provide no-action relief to facilitate prime brokerage activities on swap execution facilities (SEFs). 

“Today’s relief is intended to encourage more market participants, particularly prime brokers, to trade swaps on SEFs,” said DSIO Director Matthew Kulkin.  “Providing clarity regarding pre-trade disclosures for these trades will bring increased liquidity onto registered venues without regulatory uncertainty.”

Pursuant to Commission regulation 23.431(c), a swap dealer is excused from making certain required disclosures to its counterparty prior to entering into a swap if such swap is entered into anonymously on a swap execution facility (SEF). Under the relief provided today, a swap dealer, acting as a prime broker, which is excused from making required disclosures with respect to an on-SEF anonymous transaction entered as part of a prime brokerage arrangement will also be excused from making the required disclosures when entering into the equal but opposite transaction off-SEF with a prime brokerage client.