June 10, 2013
CFTC’s Division of Clearing and Risk Issues Time-Limited No-Action Relief to Banks Having Assets of Less Than $10 Billion from the Board Approval Requirement of the CEA and the End-User Exception to the Clearing Requirement
Washington, DC – The Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission (Commission) today announced the issuance of a time-limited, no-action letter granting relief to banks, savings associations, farm credit system institutions, and credit unions having assets of less than $10 billion (Small Banks), which are issuers of securities, from the board approval requirements of section 2(j) of the Commodity Exchange Act (CEA) and Commission regulation 50.50, subject to certain conditions.
The no-action letter provides that DCR will not recommend an enforcement action for a Small Bank’s election of the end-user exception from required clearing without obtaining prior board approval required by section 2(j) of the CEA and regulation 50.50, provided that as soon as practicable, and no later than July 10, 2013, a Small Bank obtains retroactive board approval for entering into uncleared swaps pursuant to the end-user exception for swaps entered into on or after June 10, 2013. Beginning on June 10, 2013, in order to elect the end-user exception to required clearing, Small Banks must be otherwise eligible to utilize Commission regulation 50.50. This no-action relief expires on July 10, 2013. DCR notes that all market participants electing the end-user exception to required clearing do not have to comply with the reporting obligations contained in regulation 50.50(b) until September 9, 2013.
Last Updated: June 10, 2013