Release Number 8307-20

CFTC Staff Extends Relief for SEFs from Certain Block Trade Requirements

November 13, 2020

— The Commodity Futures Trading Commission’s Division of Market Oversight (DMO) today extended temporary no-action relief to swap execution facilities (SEFs) and other market participants originally provided in 2017 by CFTC Staff Letter No. 17-60. Under the approved extension, the relief is now set to expire on the compliance date of the Part 43 Real-time Public Reporting Requirements final rule. 

The 2017 no-action relief provided that DMO will not recommend enforcement action against a SEF that has rules and/or procedures that use the SEF’s non-order book trading systems or platforms to facilitate execution of block trades for swaps that are intended-to-be-cleared, and thus are not compliant with CFTC Regulation 43.2, if certain conditions are met.

The relief was provided to allow DMO to assess swap block trades, including the potential of a permanent solution for SEFs from the requirement in CFTC Regulation 43.2 that a swap block trade must “occur away from the registered [SEF’s]… trading system or platform.” 

On September 17, 2020, the Commission approved the Part 43 Real-time Public Reporting Requirements final rule, amending certain real-time public swap reporting and dissemination requirements. [See CFTC Press Release 8247-20] The final rule codified the relief provided in CFTC Staff Letter 17-60 by amending the definition of “block trade” to allow block trades for intended-to-be-cleared swap blocks to be executed on a SEF’s non-order book trading systems or platforms.