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ARTICLE · 15 JUNE 2015

CFTC Exempts Certain Wholly-Owned Securitization SPVs From Mandatory Clearing

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In a typical auto securitization, a captive finance company sells a pool of receivables (including from auto leases) to an SPV, which then sells debt securities to investors.

United StatesFinance and Banking
Nikiforos Mathews
Nikiforos Mathews
Jonas Robison
Jonas Robison
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On May 4, 2015, the Division of Clearing and Risk of the Commodity Futures Trading Commission (the "CFTC") issued a no-action letter (the "Letter")1 clarifying that securitization special purpose vehicles ("SPVs") that are wholly-owned by, and consolidated with, a "captive finance company" are eligible for the "end-user exception" in connection with clearing determinations issued by the CFTC under Section 2(h) of the Commodity Exchange Act, as amended by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("CEA").  The auto securitization industry, including Ford Motor Credit Company LLC, has been particularly focused on the interpretive relief provided by the Letter.2

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