CFTC Adopts Amendment To Inter-Affiliate Clearing Rule

The CFTC voted unanimously to adopt amendments to the exception from clearing for swaps between affiliates.

The final rule amends CFTC Rule 50.52 ("Exemption for swaps between affiliates") to make permanent certain temporary alternative compliance frameworks that are "intended to make this anti-evasionary condition workable for international corporate groups in the absence of foreign clearing regimes determined to be comparable to CFTC requirements." The CFTC further noted that the rulemaking would "effectively codify CFTC Letter No. 17-66."

The final rule will go into effect 30 days after the date of publication in the Federal Register.

Commentary

The change by the CFTC is sensible, though it more or less retains the status quo, given the current no-action relief. As noted before, this particular aspect of the rule never made a great deal of sense.