CFTC Staff Letter 14-85: Extension of No-Action Relief for LCH.Clearnet Ltd Clearing DCM/SEF Swaps

U.S. COMMODITY FUTURES TRADING COMMISSION
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Facsimile: (202) 418-5547 a aradhakrishnan@cftc.gov Ananda Radhakrishnan Director Division of Clearing and Risk CFTC Letter No. 14-85 No-Action June 25, 2014 Division of Clearing and Risk Mr. David Gilberg Sullivan & Cromwell LLP 125 Broad Street New York, New York 10004 Re: Extension of Time-Limited No-Action Relief with Regard to Clearing Swaps Executed on DCMs or SEFs Dear Mr. Gilberg:
The purpose of this letter is to inform you that the Division of Clearing and Risk (“Division”) of the Commodity Futures Trading Commission (“Commission”) is extending the expiration date of the no-action relief granted to LCH.Clearnet Ltd. (“LCH”) on September 23, 2013 (“No-Action Relief”).1 By letter dated July 30, 2013 (“Letter”), you requested on behalf of LCH, a derivatives clearing organization (“DCO”) registered under Section 5b of the Commodity Exchange Act (“CEA”),2 that the Division confirm that it would not recommend that the Commission commence an enforcement action against: (1) LCH for clearing certain swaps executed on, or subject to the rules of, designated contract markets (“DCMs”) or swap execution facilities (“SEFs”) (collectively, “DCM/SEF Swaps”), or (2) clearing members of LCH for clearing DCM/SEF Swaps through LCH. The Letter requested that the relief be effective until LCH’s existing DCO registration orders are amended to permit LCH to clear DCM/SEF Swaps, and it represented that LCH intended to apply soon for an amended DCO registration order that would permit it to clear DCM/SEF Swaps. At the time of the Letter, LCH had been clearing interest rate swaps executed on Tradeweb LLC, and on Bloomberg L.P., both of which had been operating as exempt markets under the CEA.3