Release Number 8313-20

CFTC Unanimously Approves Final Rule Amending Swap Execution Facility Requirements

November 18, 2020

— The Commodity Futures Trading Commission has unanimously approved a final rule amending certain parts of its regulations relating to the execution of “package transactions” on swap execution facilities (SEFs) and the resolution of error trades on SEFs. Both matters are currently the subject of relief in Commission staff no-action letters.

The final rule amends part 37 of CFTC regulations to allow the swap components of certain categories of package transactions to be executed on-SEF but through flexible means of execution rather than through the required methods of execution for “required transactions.” In addition, the final rule amends part 36 of CFTC regulations to include an exemption from the trade execution requirement for swap transactions that are executed as a component of a package transaction that also includes a component that is a new issuance bond. The final rule codifies the majority of relief currently provided in CFTC No-Action Letter No. 20-31.

Further, the final rule enables SEFs to permit market participants to execute swaps transactions to correct operational or clerical errors using execution methods other than those required by CFTC regulations for required transactions. The final rule codifies the intent of CFTC No-Action Letter Nos. 17-27 and 20-01 to allow SEFs and market participants to correct operational or clerical errors.

The final rule is the 32nd approved by the Commission under Chairman Heath P. Tarbert. It becomes effective 60 days after publication in the Federal Register.