CFTC Staff Letter 20-46: Extension of No-Action Relief for Shanghai Clearing House

CFTC LETTER NO. 20-46 NO-ACTION DECEMBER 17, 2020

Mr. Karl Chen
Chief Financial Officer
Shanghai Clearing House
No. 2 East Beijing Road
Huangpu District
Shanghai, People’s Republic of China
Re: Extension of No-Action Relief with Regard to Section 5b(a) of the Commodity Exchange Act and Commission Regulations Thereunder Dear Mr. Chen:
By letter dated May 31, 2016 (CFTC Letter No. 16-56), the Division of Clearing and Risk (“Division”) of the Commodity Futures Trading Commission (“Commission”) first provided relief to Shanghai Clearing House (“SHCH”), stating that the Division would not recommend that the Commission take enforcement action against SHCH for failure to register as a derivatives clearing organization (“DCO”) pursuant to the requirements of Section 5b(a) of the Commodity Exchange Act (the “CEA”) and Commission regulations thereunder, subject to certain conditions described in the letter. 1 The relief was set to expire on July 31, 2021. The Division is hereby extending the relief for one additional year, and is expanding the scope of products covered by the relief, for the reasons discussed below. Under the terms of the relief, SHCH is permitted to clear certain swaps subject to mandatory clearing in the People’s Republic of China for the proprietary trades 2 of SHCH clearing members that are U.S. persons or affiliates of U.S. persons. The relief was provided to