RegAlert2015-12-21 | CFTC Staff Letter 15-67Added · Updated
CFTC Staff Letter 15-67: AQATP Standard for SEF Cleared Swaps
The Divisions supplement the 2013 Staff Guidance by establishing that the As Quick As Technically Practicable (AQATP) standard for routing trades to Derivative Clearing Organizations (DCOs) is met if trades are received no more than 10 minutes after execution, effective August 1, 2016. This timeframe accommodates manual post-execution affirmation processes to identify errors, with industry participants indicating readiness to review all swaps within this window by May 1, 2016, and others by August 1, 2016. The letter explicitly states that swap data reporting obligations under Regulations 43 and 45 remain unaffected and require reporting as soon as technologically practicable regardless of clearing submission timing. Market participants, DCOs, SEFs, and DCMs are conditioned on not increasing current affirmation timeframes or introducing delays, with the expectation that fully automatic affirmation is used where reasonably practicable.
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U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
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Division of Clearing and Risk
Division of Market Oversight
CFTC Letter No.15-67
Other Written Communication
December 21, 2015
Division of Clearing and Risk
Division of Market Oversight
Steven Kennedy
Global Head of Public Policy
International Swaps and Derivatives Association, Inc.
1101 Pennsylvania Avenue
Suite 600
Washington, DC 20004
Re: Straight Through Processing and Affirmation of SEF Cleared Swaps Dear Mr. Kennedy, This letter responds to a letter received from the International Swaps and Derivatives Association, Inc. (“ISDA”) on July 27, 2015, that the Commodity Futures Trading Commission (“Commission”) accept ISDA’s proposed compliance with the requirement that derivatives clearing organizations (“DCOs”), swap execution facilities (“SEFs”) and designated contract markets (“DCMs”) develop rules and procedures so that DCOs can accept or reject trades for clearing as quickly after execution as would be technologically practicable if fully automated systems were used (“AQATP”). Discussion Prompt clearing reduces market risk by eliminating counterparty risk, provides certainty of execution and clearing, and reduces costs to market participants. 1 The Commission’s regulations requiring prompt clearing include: (i) Regulation 39.12(b)(7), which provides that DCOs must coordinate with each SEF and DCM in developing rules and procedures to accept or reject trades for clearing AQATP; (ii) Regulation 37.702(b), which provides that SEFs must coordinate with DCOs in developing rules and procedures to facilitate prompt and efficient
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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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