September 30, 2013
CFTC’s Division of Market Oversight Provides Time-Limited No-Action Relief for Swap Execution Facilities and Designated Contract Markets from the One Business Day Product Review Period Requirement of Commission Regulation 40.2(a)(2) for Newly-Listed Swap Products
Washington, DC – The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO or Division) today announced the issuance of a time-limited no-action letter providing relief for swap execution facilities (SEFs) and Designated Contract Markets (DCMs) from the one business day product review period requirement of Commission regulation 40.2(a)(2) for newly-listed swap products.
DMO believes that the one business day review period for self-certified product submissions required by Commission regulation 40.2(a)(2) could impede the ability of SEFs and DCMs to smoothly migrate swap products from an un-regulated to a regulated environment due to the expected large number of swap product filings in the near future, the short time before the October 2, 2013, compliance date for the SEF final rules, and the federal government’s possible shutdown.
In light of these unique circumstances, DMO believes that no-action relief from the one business day review period requirement of Commission Regulation 40.2(a)(2) is necessary to prevent market interruption and to ensure continuity in the trading of swap products. DMO has issued a no-action letter which states that the Division will not recommend that the Commission initiate an enforcement action against any current registered SEF or DCM for violation of Commission Regulation 40.2(a)(2) if it lists swap products for trading on the same day that it submits a self-certification of the product pursuant to Commission Regulation 40.2. The time limited no-action relief would commence on September 30, 2013 and expire on October 3, 2013 or, if there is a federal government shutdown on that date, the first business day after the conclusion of such shutdown.
DMO’s no-action relief does not excuse SEFs or DCMs from compliance with any other applicable requirements of the CEA or the Commission’s regulations thereunder, including all of the other provisions of Regulation 40.2 regarding self-certified swap submission. SEFs and DCMs are particularly reminded of their obligations under Commission Regulation 40.2(a)(3)(vi) to publish swap product submissions, including the terms and conditions of such products, on their websites.
Last Updated: September 30, 2013