RegAlert2013-12-23 | CFTC Staff Letter 13-81Added · Updated
CFTC No-Action Relief for SEF Basis Risk Mitigation Services Execution Methods
Registered Swap Execution Facilities (SEFs) providing basis risk mitigation services are exempt from the requirement to execute Required Transactions on an Order Book or Request for Quote System, provided the service adheres to specific operational conditions. These conditions mandate impartial platform access, a minimum participant threshold of five for major currencies and three for others, and an all-or-nothing execution model where any participant's refusal terminates the session. The relief is time-limited until December 31, 2014, and does not grant exemptions from other Commodity Exchange Act or Commission regulation requirements, including Part 43 reporting obligations.
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U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
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Division of
Market Oversight
CFTC Letter No. 13-81
No-Action
December 23, 2013
Division of Market Oversight
Re: Time-Limited No-Action Relief from Required Transaction Execution Methods for Transactions that Result from Basis Risk Mitigation Services Ladies and Gentlemen, This letter is in response to a request dated July 31, 2013 and supplement dated December 6, 2013 (together the “Request”) from ICAP plc (“ICAP”), both to the Division of Market Oversight (the “Division”) of the Commodity Futures Trading Commission (the “Commission”), in which ICAP requested relief from the Division in connection with certain “basis risk reduction services” offered by ICAP. 1 Specifically, ICAP requested that: (1) Required Transactions 2 that result from basis risk reduction services may be executed in accordance with a swap execution facility’s (“SEF”) basis risk reduction service rule, as described in the Request, rather than on an Order Book or RFQ System and (2) in the event the Division grants the requested relief with respect to item (1) above, ICAP may continue its basis risk reduction services operations as they occur today until January 31, 2014 in order to permit it to effectuate an orderly transition of those operations to the ICAP SEF in accordance with the specifications set forth in the Request (and/or as otherwise specified by the Division in its provision of relief). 3
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Source: Commodity Futures Trading Commission — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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