CFTC Staff Letter 26-10: Amendment of Appendix A to Staff Letter 24-11 to Add Two UK Swap Trading Facilities

Commission Regulation 37.3(a)(1); or (b) A counterparty that is subject to the trade execution requirement pursuant to CEA section 2(h)(8), if such counterparty executes a swap that is subject to such trade execution requirement on an Eligible UK Facility” ((a) and (b), collectively, the “DMO No-Action Positions”). HMT and FCA staff have, respectively, requested that DMO amend Appendix A to CFTC Staff Letter 24-11 to include as Eligible UK Facilities an additional MTF, OptAxe Limited, and an additional OTF, Capitolis UK Limited, each of which are authorized within the UK. FCA staff have represented that OptAxe Limited and Capitolis UK Limited are, for purposes of the DMO No-Action Positions, each similarly situated to those UK MTFs and OTFs that are currently listed in Appendix A, and that OptAxe Limited and Capitolis UK Limited each meet the conditions for the DMO No-Action Positions as set forth in CFTC Staff Letter 24-11. 3 Staff Position Based on the representations of FCA staff, DMO is amending Appendix A to CFTC Staff Letter 24-11 to include OptAxe Limited and Capitolis UK Limited as additional Eligible UK Facilities. Amended Appendix A is attached to this letter and will become effective immediately upon 3 As stated in CFTC Staff Letter 24-11, the DMO No-Action Positions do not affect any other requirements under the CEA or the Commission’s regulations. In particular, swap transactions executed on Eligible UK Facilities must still comply with:
(1) The reporting requirements of Parts 43 and 45 of the Commission’s regulations, which continue to apply to counterparties that are subject to such reporting requirements; (2) The swap trading eligibility requirement of CEA section 2(e); and (3) The following clearing-related requirements:
(i) When a swap transaction executed by a U.S. person on an Eligible UK Facility is a “customer” position subject to CEA section 4d, the transaction, if intended to be cleared, must be cleared through a Commission-registered futures commission merchant (“FCM”) at a Commission-registered derivatives clearing organization (“DCO”); (ii) When a swap transaction executed by a U.S. person on an Eligible UK Facility is a “proprietary” position under Commission Regulation 1.3, the transaction, if intended to be cleared, must be cleared either through a Commission-registered DCO or a clearing organization that has been exempted from DCO registration by the Commission pursuant to CEA section 5b(h) (an “Exempt DCO”); and (iii) When a swap transaction is subject to the Commission’s clearing requirement under Part 50 of the Commission’s regulations, and is entered into by a person that, pursuant to CEA section 2(h)(1), is subject to such clearing requirement, the transaction must be cleared either through a Commission-registered DCO or an Exempt DCO; provided that, consistent with (i) above, if the transaction is a “customer” position subject to CEA section 4d, it must be cleared through a Commission-registered FCM at a Commission￾registered DCO, and cannot be cleared through an Exempt DCO. If, as a result of the clearing arrangements that an Eligible UK Facility has in place, some swap transactions executed on the Eligible UK Facility are cleared by a clearing organization that is not a Commission-registered DCO, the Eligible UK Facility must, as a condition of receiving the above no-action position from the SEF registration requirement, have a rule in its rulebook that requires the types of swap transactions described in clauses (i), (ii) and (iii) above, if intended to be cleared, to be cleared in a manner consistent with the requirements described in clauses (i), (ii) and (iii), respectively.

issuance, superseding the original Appendix A to CFTC Staff Letter 24-11. All terms of CFTC Staff Letter 24-11 not amended by this letter are unchanged and remain in effect.
III. Conclusion
This letter is provided in accordance with the Joint Statement by UK and US Authorities on Continuity of Derivatives Trading and Clearing Post-Brexit of February 25, 2019. 4

This letter, and the position taken herein, represent the views of DMO only, and do not necessarily represent the position or view of the Commission or of any other office or division of the Commission. This letter and the no-action position taken herein are not binding on the Commission. 5 The staff position taken in this letter does not excuse persons relying on it from compliance with any other applicable requirements contained in the CEA or in Commission regulations. Further, this letter, and the position taken herein, are based upon the facts and circumstances presented to DMO. Any different, changed, or omitted material facts or circumstances might render the staff position taken in this letter void. Finally, as with all staff letters, DMO retains the authority to condition further, modify, suspend, terminate, or otherwise restrict the terms of this letter, and the position taken herein, in its discretion. If you have any questions concerning this correspondence, please contact Roger Smith, DMO, at (202) 418-5344 or rsmith@cftc.gov. Sincerely, ___________________________________ Frank N. Fisanich Acting Director Division of Market Oversight 4 Available at https://www.cftc.gov/PressRoom/PressReleases/7876-19. Pursuant to the Joint Statement, the Commission committed to extending existing regulatory relief granted by the CFTC to EU firms, including UK firms, to UK firms at the point of the UK’s withdrawal from the EU. 5 See § 140.99(a)(2), 17 CFR 140.99(a)(2) (“A no-action letter binds only the issuing Division . . . and not the Commission or other Commission staff.”).

Amended Appendix A
List of UK-Authorized MTFs and OTFs covered by DMO No-Action Positions in CFTC Staff No-Action Letter 24-11 Trading Facility Name Category (MTF or OTF) Home Country 360 Trading Networks UK Limited MTF United Kingdom Bloomberg Multilateral Trading Facility Limited MTF United Kingdom BGC Brokers LP - OTF OTF United Kingdom Capitolis UK Limited OTF United Kingdom Creditex Brokerage LLP - MTF MTF United Kingdom Digital Vega MTF MTF United Kingdom Dowgate MTF United Kingdom EBS UK MTF MTF United Kingdom FX Connect - MTF MTF United Kingdom GFI Securities LTD - MTF MTF United Kingdom GFI Securities LTD - OTF OTF United Kingdom ICAP Securities OTF OTF United Kingdom Integral MTF MTF United Kingdom iSWAP MTF MTF United Kingdom Kyte Broking Limited OTF United Kingdom OptAxe Limited MTF United Kingdom OTCX UK MTF MTF United Kingdom Refinitiv Transaction Services Limited MTF United Kingdom TP ICAP UK MTF MTF United Kingdom Trad-X MTF United Kingdom Tradeweb Europe Limited MTF MTF United Kingdom Tradition OTF OTF United Kingdom Tradition-NEX OTF OTF United Kingdom Tullett Prebon Europe OTF OTF United Kingdom Tullett Prebon Europe MTF MTF United Kingdom