CFTC Extends Relief for SEFs From Certain Block Trade Requirements
Saturday, November 21, 2020

On November 13, the Commodity Futures Trading Commission’s Division of Market Oversight (DMO) issued CFTC Staff Letter No. 20-35, which extends temporary no-action relief to swap execution facilities (SEFs) and other market participants originally provided by CFTC Staff Letter No. 17-60. (For additional information regarding CFTC Staff Letter No. 17-60, please refer to the November 17, 2017 edition of Corporate & Financial Weekly Digest.) Staff Letter No. 17-60 provided that DMO would not recommend enforcement action against a SEF that has rules and/or procedures that use the SEF’s non-order book trading systems or platforms to facilitate the execution of block trades for swaps that are intended-to-be-cleared, and thus are not compliant with CFTC Regulation 43.2, subject to certain conditions being met.

The relief provided by CFTC Staff Letter No. 20-35 will expire on the compliance date of the Part 43 Real-time Public Reporting Requirements final rule, which codified the relief provided in CFTC Staff Letter No. 17-60 by amending the definition of “block trade” to allow block trades for intended-to-be-cleared swap blocks to be executed on a SEF’s non-order book trading systems or platforms.

CFTC Staff Letter No. 20-35 is available here.

 

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