CFTC Proposes To Simplify Exemptive Process For Foreign Clearing Organizations

The CFTC proposed amendments to codify policies and procedures for organizations located outside of the U.S. to obtain an exemption from registration as a derivatives clearing organization ("DCO"). Currently, foreign DCOs seeking such an exemption are required to apply for no-action relief.

The proposal, which is part of the CFTC's Project KISS regulatory modernization efforts, would amend CFTC Parts 39 and 140, which, among other things, address procedures for registration as a DCO. The CEA also allows the CFTC to exempt a non-U.S. clearing organization from registration for clearing swaps if it determines the clearing organization to be subject to "comparable, comprehensive supervision and regulation" by government authorities in the clearing organization's home country.