September 10, 2010
CFTC Grandfather Relief to Exempt Commercial Markets and Exempt Boards of Trade
Washington, DC – The Commodity Futures Trading Commission (CFTC) today issued separate orders to permit exempt commercial markets (ECMs) and exempt boards of trade (EBOTs) to continue to operate as ECMs or EBOTS temporarily after the deletion of the ECM- and EBOT-enabling provisions from the Commodity Exchange Act (CEA) by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The CFTC anticipates that many entities that currently operate as ECMs or EBOTs will seek to become either swap execution facilities (SEFs) or designated contract markets (DCMs) when the CFTC adopts regulations implementing the Dodd-Frank Act’s requirements for those facilities. Although the Commission will be adopting new SEF and DCM regulations prior to July 15, 2011 – the effective date for deleting the ECM and EBOT provisions from the CEA – it also anticipates that, concurrent with the implementation of those new provisions, it will have to process a large number of SEF and DCM applications from ECMs, EBOTs and other interested parties. To ease this congestion of applications and to facilitate the transition of current ECM and EBOT businesses to the new regulatory regime mandated by the Dodd-Frank Act, the Commission determined that it is appropriate to provide grandfather relief to certain ECMs and EBOTs to temporarily continue their ECM and EBOT operations after July 15, 2011.
The two orders set forth various conditions for receiving grandfather relief, including the filing of both a relief petition and a SEF or DCM application with the CFTC.
The orders will become effective upon publication in the Federal Register.
R. David Gary
Last Updated: September 10, 2010