Further Delay Of And Request For Comments On November 14, 2013 Staff Advisory Regarding Application Of CFTC Regulations To U.S. Activities Of Non-U.S. Swap Dealers - Commodities/Derivatives/Stock Exchanges

On January 3, 2014, the Commodity Futures Trading Commission ("CFTC") issued a no-action letter further delaying until September 15, 2014 the effectiveness of a November 14, 2013 advisory regarding the applicability of certain Dodd-Frank requirements to activities that occur in the United States (the "Advisory").¹ A previous no-action letter, issued on November 26, 2013, had delayed the effectiveness of the Advisory until January 14, 2014.²

The Advisory generally provides that a non-U.S. swap dealer registered with the CFTC must comply with "transaction-level" requirements³ of Dodd-Frank when entering into a swap with a non-U.S. person if the swap is "arranged, negotiated, or executed by personnel or agents" of the non-U.S. swap dealer located in the United States.⁴

In conjunction with the issuance of this latest no-action letter, the CFTC also issued a notice of request for public comment on all aspects of the Advisory.⁵

Footnotes

1. CFTC Letter No. 14-01, Re: Extension of No-Action Relief: Transaction-Level Requirements for Non-U.S. Swap Dealers (January 3, 2014); CFTC Staff Advisory No. 13-69, Applicability of Transaction-Level Requirements to Activity in the United States (November 14, 2013).

2. CFTC Letter No. 13-71, Re: No-Action Relief: Certain Transaction-Level Requirements for Non-U.S. Swap Dealers (November 26, 2013).

3. The "transaction-level" requirements include: (i) required clearing and swap processing; (ii) margining (and segregation) for uncleared swaps; (iii) mandatory trade execution; (iv) swap trading relationship documentation; (v) portfolio reconciliation and compression; (vi) real-time public reporting; (vii) trade confirmation; (viii) daily trading records; and (ix) external business conduct standards. These requirements are separated into "Category A" and "Category B" requirements, the latter of which includes solely external business conduct standards.

4. See CFTC Staff Advisory No. 13-69, Applicability of Transaction-Level Requirements to Activity in the United States (November 14, 2013).

5. Request for Comment on Application of Commission Regulations to Swaps Between Non-U.S. Swap Dealers and Non-U.S. Counterparties Involving Personnel or Agents of the Non-U.S. Swap Dealers Located in the United States (available at: http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/federalregister010314.

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