CFTC Staff Letter 14-16: Conditional No-Action Relief for Swaps Trading on Qualifying Multilateral Trading Facilities Overseen by EU Member States

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CFTC Letter No. 14-16
No-Action
February 12, 2014
Division of Market Oversight
Division of Swap Dealer and Intermediary Oversight Conditional No-Action Relief with respect to Swaps Trading on Certain Multilateral Trading Facilities Overseen by Competent Authorities Designated by European Union Member States The Divisions of Market Oversight (“DMO”) and Swap Dealer and Intermediary Oversight (“DSIO”) (together, the “Divisions”) of the Commodity Futures Trading Commission (“CFTC” or “Commission”) are jointly issuing this letter to provide conditional no-action relief for: (1) qualifying multilateral trading facilities overseen by competent authorities designated by European Union Member States (“Qualifying MTFs”) 1 from the swap execution facility (“SEF”) registration requirement set out in section 5h(a)(1) of the Commodity Exchange Act (“CEA” or “Act”) 2 and Commission regulation 37.3(a)(1); 3 (2) parties executing swap transactions on Qualifying MTFs from (i) the trade execution mandate set out in section 2(h)(8) of the Act; 4 and (ii) their obligations to report such transactions in the methods and manners prescribed in applicable part 43 and 45 regulations; 5 and (3) swap dealers (“SDs”) and major swap participants (“MSPs”) executing swap transactions on Qualifying MTFs from (i) certain business conduct requirements under subpart H to part 23 of the Commission’s regulations, which sets forth business conduct standards for SDs and MSPs in their dealings with counterparties (the “External BCS”); 6 (ii) the confirmation requirement under Commission regulation 23.501; 7 and (iii) the swap trading relationship documentation requirements under Commission regulation 23.504. 8