December 6, 2021

Volume XI, Number 340


December 03, 2021

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CFTC Unanimously Approves Final Rule Amending SEF Requirements

On November 18, the Commodity Futures Trading Commission (CFTC) unanimously approved a final rule (Final Rule) amending CFTC regulations relating to the execution of “package transactions” on swap execution facilities (SEFs) and the resolution of error trades on SEFs.

The final rule amends part 37 of CFTC regulations to allow the swap components of certain categories of package transactions to be executed on-SEF but through flexible means of execution, as opposed to the prescribed methods of execution for “required transactions.” In addition, the Final Rule amends part 36 of CFTC regulations to provide for an exemption from the trade execution requirement for swap transactions that are executed as a component of a package transaction that also includes a new issuance bond component. The Final Rule codifies the majority of relief currently provided in CFTC No-Action Letter No. 20-31.

The Final Rule also enables SEFs to permit market participants to execute swaps transactions to correct operational or clerical errors using execution methods other than those required by CFTC regulations for required transactions. The Final Rule codifies the intent of CFTC No-Action Letter Nos. 17-27 and 20-01 to allow SEFs and market participants to correct operational or clerical errors.

The Final Rule will become effective 60 days after publication in the Federal Register.

The Final Rule is available here.

©2021 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 325

About this Author

Christian B. Hennion, Finance Attorney, Katten Muchin Law Firm

Christian B. Hennion concentrates his practice in financial services and asset management matters, including counseling fund managers, registered investment advisers and commodity trading advisors on both transactional and regulatory matters. Chris has advised a wide range of US and international managers, from start-ups to large institutions, regarding a variety of matters, including private fund launches and reorganizations, advisory engagements, Investment Advisers Act and Commodity Exchange Act compliance obligations, Securities and Exchange Commission (SEC) and Commodity Futures...

Guy Dempsey Jr., Bank Regulations Legal Specialist, Katten Muchin

Guy C. Dempsey Jr. concentrates his practice on derivatives and structured products and on bank regulation. He advises clients on derivatives transactions of all types across all asset classes, as well as on the corporate governance, regulatory, collateral, compliance, insolvency and litigation issues associated with such products.

Much of Guy’s work involves helping bank and non-bank clients analyze the details and impact of the Dodd-Frank Act. He maintains deep knowledge of the banking laws and regulations relating to capital markets activities....

Stanley V. Polit, Katten Muchin, Financial Services lawyer, Corporate Regulatory Matters Attorney

Stanley Polit concentrates his practice in transactional, corporate and regulatory aspects of financial services matters. Stan is able to provide legal services to a wide variety of clients including proprietary trading firms, hedge funds, broker-dealers, registered investment advisers, commodity trading advisers, financial institutions and general corporate clients.

Prior to joining Katten, Stan served as a council member for a national crisis management firm, where he specialized in crisis communication and merged media strategies. He has...