RegAlert2024-02-20 | CFTC Staff Letter 24-02Added · Updated
CFTC Staff Letter 24-02: No-Action Position for Swap Dealers and Major Swap Participants Regarding Pre-Trade Mid-Market Mark Disclosure for SOFR OIS
The Market Participants Division will not recommend enforcement against registered swap dealers and major swap participants for failing to disclose a pre-trade mid-market mark for Covered SOFR Overnight Index Swaps, provided that real-time tradeable bid and offer prices are available electronically to the counterparty and the counterparty agrees in writing in advance to waive this disclosure. This relief applies specifically to USD-denominated overnight index swaps referencing the Secured Overnight Financing Rate with a remaining term of no more than 50 years that meet the specifications of 17 CFR 50.4. The position does not apply to other contracts or obligations, such as the requirement to provide a daily mark, and remains subject to modification or revocation if market conditions change.
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CFTC LETTER NO. 24-02 NO-ACTION FEBRUARY 20, 2024 Market Participants Division Amanda L. Olear Director Re: Request for No-Action Position for Swap Dealers and Major Swap Participants Regarding the Obligation to Provide a Pre-Trade Mid-Market Mark for Certain Transactions Referencing the Secured Overnight Financing Rate Ladies and Gentlemen:
This letter responds to a request (“Request”) received by the Market Participants Division (“MPD”) of the Commodity Futures Trading Commission (“CFTC” or “Commission”) from the Alternative Reference Rates Committee’s (“ARRC”) regulatory working group subcommittee and its member firms (“ARRC RWG”), in which ARRC RWG requested that MPD provide a noaction position similar to that in CFTC Staff Letter 12-58 1 (“Letter 12-58”) for registered swap dealers and major swap participants (“Swap Entities”) that enter into certain overnight index swaps (“OIS”) referencing the Secured Overnight Financing Rate (“SOFR”) without disclosing a pre-trade mid-market mark (“PTMMM”) to the counterparty of the transaction as required under § 23.431(a)(3)(i), 2 as further described below. 3
I. Background
A. Regulatory Background
Section 4s(h)(3)(B) of the Commodity Exchange Act (“CEA”) 4
directs the Commission to adopt business conduct standards for Swap Entities that:
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Lineage: In force
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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