CFTC Staff Letter 23-01: Revised No-Action Positions for Intended-to-be-Cleared Swaps

CFTC Letter No. 23-01 No-Action February 01, 2023 U.S. COMMODITY FUTURES TRADING COMMISSION Three Lafayette Centre 1155 21st Street, NW, Washington, DC 20581 Telephone: (202) 418-5000 Market Participants Amanda L. Olear Division Director Re: Revised No-Action Positions for Swaps Intended to be Cleared Ladies and Gentlemen:
This letter responds to a request received by the Market Participants Division (“MPD”) of the Commodity Futures Trading Commission (“CFTC” or “Commission”) from the International Swaps and Derivatives Association, Inc. (“ISDA”) on behalf of its members that are swap dealers (“SDs”). ISDA requested, in a letter dated May 31, 2022 (“ISDA Letter”), 1 that MPD confirm that it will not recommend an enforcement action with respect to certain business conduct and documentation requirements for swaps that are intended to be cleared. Specifically, ISDA requested that the Commission expand the scope of the swaps covered in CFTC Staff Letter 13-70 (“Letter 13-70”)2 to include: (i) all swaps that are of a type accepted for clearing at execution; and (ii) swaps that are intended to be cleared through a clearing organization that has been exempted from registration by the Commission pursuant to section 5b(h) of the Commodity Exchange Act (“CEA”)3 (an “Exempt DCO”) or that are executed on or pursuant to the rules of a swap execution facility exempted from registration by the Commission pursuant to section 5h(g) of the CEA. This letter supersedes Letter 13-70 in its entirety. No person may rely upon Letter 13-70 after the date hereof. 1 Available with this letter at https://www.cftc.gov/LawRegulation/CFTCStaffLetters/index.htm. 2 CFTC No-Action Letter No. 13-70 (Nov. 15, 2013), available at https://www.cftc.gov/LawRegulation/CFTCStaffLetters/index.htm. 3 7 U.S.C. § 7a-1(h). 4 7 U.S.C. § 7b-3(g).