CFTC Finalizes Rule Regarding LIBOR Transition Clearing Requirement Determination For Certain Interest Rate Swaps

On August 12, the Commodity Futures Trading Commission ("CFTC") issued a final rule amending its Regulation 50.4(a) clearing requirements for swaps.

The latest in a series of rulemaking that is supportive of the financial industry's transition away from interbank benchmarks, the new final rule adjusts CFTC clearing requirements to reflect this change.

(1) Effective 30 days from publication in the Federal Register:

- interest rate swaps referencing certain LIBOR rates (GBP LIBOR, CHF LIBOR, JPY LIBOR, EUR LIBOR and EONIA) no longer require clearing to a registered or exempt derivatives clearing organization (DCO);

- interest rate swaps referencing certain alternative reference rates (CHF Swiss Average Rate Overnight, JPY Tokyo Overnight Average Rate, and EUR Euro Short Term Rate (€STR)) will require clearing by a DCO;