CFTC Staff Letter 14-62: No-Action Relief for Package Transactions Including Swaps Subject to Trade Execution Requirements

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 No.14-62
No-Action
May 1, 2014
Division of Market Oversight
Division of Clearing and Risk
No-Action Relief from the Commodity Exchange Act Sections 2(h)(8) and 5(d)(9) and from Commission Regulation § 37.9 for Swaps Executed as Part of Certain Package Transactions and No-Action Relief for Swap Execution Facilities from Compliance with Certain Requirements of Commission Regulations § 37.9(a)(2), § 37.203(a) and § 38.152 for Package Transactions Ladies and Gentlemen:
This letter responds to requests received from multiple parties by both the Division of Market Oversight ("DMO") and the Division of Clearing and Risk ("DCR") (together "the Divisions") of the Commodity Futures Trading Commission ("Commission" or “CFTC”) for no￾action relief from the trade execution requirement in Commodity Exchange Act (“CEA”) section 2(h)(8) and from certain requirements of § 37.9(a)(2), § 37.203(a) and § 38.152 of the Commission’s regulations for package transactions, as defined herein. 1
I. Time Limited No-Action Relief from the Commodity Exchange Act Sections 2(h)(8)
and 5(d)(9) and from Commission Regulation § 37.9 for Swaps Executed as Part of Certain Package Transactions Trade Execution Requirement Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) 2 amended the 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 a designated contract market (“DCM”) or swap execution facility (“SEF”), unless no DCM or SEF makes such swap