RegAlert2013-03-20 | CFTC Staff Letter 13-02Added · Updated
CFTC Staff Letter 13-02: No-Action Relief from Required Clearing for Partial Novation and Partial Termination of Swaps
The Division of Clearing and Risk will not recommend enforcement against persons failing to clear a stub swap resulting from the partial novation or partial termination of an original swap executed prior to the applicable compliance date. This relief applies provided the original swap was not cleared, was executed before the relevant compliance date, and specific operational conditions regarding recordkeeping and the clearing of the novated portion are met. The Division confirms that fully terminated or fully novated original swaps are not subject to the clearing requirement, while the novated swap itself remains subject to clearing obligations.
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U.S. COMMODITY FUTURES TRADING COMMISSION
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Facsimile: (202) 418-5547 aradhakrishnan@cftc.gov a Ananda Radhakrishnan Director Division of Clearing and Risk CFTC Letter No. 13-02 No-Action March 20, 2013 Division of Clearing and Risk Mr. Robert G. Pickel Chief Executive Officer International Swaps and Derivatives Association, Inc. 1001 Pennsylvania Avenue, NW, Suite 600 Washington, D.C. 20004 Re: No-Action Relief from Required Clearing for Partial Novation and Partial Termination of Swaps Dear Mr. Pickel:
This letter is in response to a request dated March 10, 2013, from The International Swaps and Derivatives Association, Inc. (ISDA), on behalf of its members and other similarly situated persons, to the Division of Clearing and Risk (Division) of the Commodity Futures Trading Commission (Commission), in which ISDA requested an interpretative letter regarding whether the remaining portion of a swap between the original counterparties that is partially novated or partially terminated is subject to the clearing requirement under section 2(h)(1)(A) of the Commodity Exchange Act (CEA) and part 50 of the Commission’s regulations. The request is limited to the partial novation or partial termination of swaps that were executed prior to the date on which counterparties must begin complying with the clearing requirement (and therefore, not required to be cleared). 1
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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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