CFTC Extends Relief From Clearing And Trade Execution Requirements For Certain Inter-Affiliate Transactions

The CFTC Divisions of Market Oversight ("DMO") and of Clearing and Risk ("DCR") issued no-action letters extending and modifying previously granted relief from the swap clearing and trade execution requirements for certain affiliated counterparties. The letters are related to CFTC Rule 50.52 (Inter-affiliate exemption for swaps from clearing requirements).

The DCR letter exempts entities from certain mandatory clearing and trade execution requirements. The letter also extends previous relief permitting certain affiliated counterparties to rely on alternative compliance frameworks where such counterparties operate in non-U.S. jurisdictions that have not yet implemented mandatory clearing regimes. That relief allows the counterparties to either (i) pay and collect full variation margin on all swaps with unaffiliated counterparties, or (ii) pay and collect full variation margin on all swaps with all other eligible affiliate counterparties.