CFTC No-Action Relief for Correcting Operational or Clerical Errors in Swaps

U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-5000
Facsimile: (202) 418-5521 www.cftc.gov
CFTC Letter 15-24
No-Action
April 22, 2015
Division of Market Oversight
Division of Clearing and Risk
Re: No-Action Relief for Swap Execution Facilities and Designated Contract Markets in Connection with Swaps with Operational or Clerical Errors Executed on a Swap Execution Facility or Designated Contract Market Ladies and Gentlemen:
This letter responds to a request received by the Division of Market Oversight and the Division of Clearing and Risk (together, the “Divisions”) of the Commodity Futures Trading Commission (the “Commission”) from the Wholesale Markets Brokers’ Association, Americas (“WMBAA”) 1 for no-action relief for swap execution facilities (“SEFs”) from certain of the requirements under Commission Regulations 37.9(a)(2) and 37.203(a) 2 to enable SEFs to correct clerical or operational errors of swaps that have been rejected for clearing and separately to correct operational or clerical errors identified after clearing. 3 The no-action relief, which applies to SEFs and designated contract markets (“DCMs”), 4 shall commence on the date of issuance of this letter and shall expire at 11:59 p.m. (Eastern Time) June 15, 2016. Background Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) 5 amended the Commodity Exchange Act (“CEA”) to establish a comprehensive new regulatory framework for swaps. Among other things, CEA section 2(h)(8) requires that transactions involving swaps subject to the CEA section 2(h)(1) clearing requirement be executed on or pursuant to the rules of a DCM or SEF, unless no DCM or SEF