The CFTC Division of Market Oversight ("DMO") provided no-action relief from certain reporting requirements related to the shift in the discounting rate for cleared interest rate swaps.
The DMO provided relief to Chicago Mercantile Exchange, Inc. (Letter 20-33) and LCH Limited (Letter 20-32) from certain real-time reporting requirements under CFTC Rule 43.3 ("Method and timing for real-time public reporting") in connection with swaps executed as part of upcoming auctions held to facilitate the transition in the discounting rate used by the clearinghouses from the Effective Federal Funds Rate to the Secured Overnight Financing Rate (or "SOFR").
The relief, which extends to participants in the relevant auctions, permits transaction and pricing data for swaps entered into as part of the auction process to be reported no later than November 19, 2020.
The CFTC staff has repeatedly shown a willingness to be flexible as to various regulatory requirements in order to facilitate benchmark transition. This particular relief is consistent with recommendations made by a subcommittee of the CFTC Market Risk Advisory Committee, which suggested that real-time reporting could disincentivize participation in the clearinghouse auctions.
- CFTC No-Action Letter 20-32: No-Action Relief from Certain Reporting Requirements in Connection with the Transition from Effective Federal Funds Rate to Secured Overnight Financing Rate for Discounting for Certain LCH Limited Cleared Swap Products
- CFTC No-Action Letter 20-33: Staff No-Action Relief from Certain Reporting Requirements in Connection with the Transition from Effective Federal Funds Rate to Secured Overnight Financing Rate for Price Alignment
- CFTC Press Release: CFTC Staff Provides Reporting Relief for Swaps Related to Upcoming DCO Auctions as Part of the Industry-Wide Initiative to Transition Away from LIBOR
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