CFTC Extends Relief To SEFs And DCMs To Fix Trade Confirmation Errors

The CFTC Divisions of Market Oversight and Clearing and Risk (collectively, the "Divisions") extended no-action relief allowing swap execution facilities ("SEFs") and designated contract markets ("DCMs") to continue correcting trades that were rejected for clearing due to operational and clerical errors, as well as trades in which errors were discovered after swaps had been cleared (see previous coverage).

The Divisions noted that market participants continue to encounter circumstances in which trades are rejected from clearing due to readily correctible clerical and operational errors, resulting in such trades being treated as void ab initio. The Divisions also noted that errors may occur in so-called "package transactions" when DCOs clear them on a leg-by-leg basis instead of clearing all legs simultaneously. The Divisions stated that they will continue to consider a more permanent solution to these problems, but will extend the no-action relief until that goal