CFTC Staff Letter 22-12: Time-limited no-action position for Taiwan Futures Exchange with regard to Section 5b(a) of the Commodity Exchange Act and Commission regulations thereunder

CFTC LETTER NO. 22-12 NO-ACTION SEPTEMBER 15, 2022 Chairman Taiwan Futures Exchange Corporation 14F, No. 100, Sec. 2, Roosevelt Rd. Zhongzheng Dist., Taipei City 100404 Taiwan Re: No-Action Relief with Regard to Section 5b(a) of the Commodity Exchange Act and Commission Regulations Thereunder Dear Mr. Wu:
This is in response to your letter dated April 14, 2022 (“Letter”), to the Division of Clearing and Risk (“Division”) of the Commodity Futures Trading Commission (“Commission”). In the Letter, you request that the Division confirm that it will not recommend that the Commission take enforcement action against Taiwan Futures Exchange Corporation (“TAIFEX”) for failing to register as a derivatives clearing organization (“DCO”) pursuant to
Section 5b(a) of the Commodity Exchange Act (“CEA”) 1
and Commission regulations thereunder.
Under the requested relief, TAIFEX would be permitted temporarily to clear certain swaps for the proprietary trades of TAIFEX clearing members that are U.S. persons or affiliates of U.S. persons while its application for exemption from DCO registration is pending. TAIFEX has submitted to the Commission an application for exemption from the requirement to register as a DCO, pursuant to Commission regulation 39.6. 2 TAIFEX represents in its application that it meets the requirements of the Principles for Financial Market Infrastructures (“PFMIs”). 3