CFTC provides Swap Dealers transitioning away from LIBOR with Revised Regulatory Guidance - 02 September 2020

Three divisions of the Commodity Futures Trading Commission have issued updated no-action letters to reduce regulatory burdens associated with the upcoming transition for swap dealers moving away from utilizing various interbank offer rates.

The CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO), Division of Market Oversight (DMO), and Division of Clearing and Risk (DCR) each issued revised no-action letters providing additional relief to swap dealers and other market participants related to the industry-wide initiative to transition from swaps that reference the London Interbank Offered Rate (LIBOR) and other interbank offered rates to swaps that reference alternative benchmarks (CFTC Letter 20-23CFTC Letter 20-24, and CFTC Letter 20-25, all dated August 31, 2020).

Summary of the no-action relief. Each of the revised no-action letters sets forth the conditions under which counterparties will qualify for relief in connection with amending swaps to update provisions referencing LIBOR, or other IBORs. The revised letters also provide relief for additional types of amendments and refine relief previously provided based on feedback from market participants. The original no-action letters were issued on December 17, 2019. A summary of the revised relief provided from each CFTC of the divisions includes the following:

  • DSIO issued CFTC Staff Letter No. 20-23, which revises CFTC Letter 19-26 and provides relief to swap dealers from registration de minimis requirements, uncleared swap margin rules, business conduct requirements, confirmation, documentation, reconciliation requirements, and certain other eligibility requirements.
  • DMO issued CFTC Staff Letter No. 20-24which revises CFTC Letter No. 19-27 and provides time-limited relief from the trade execution requirement.
  • DCR issued CFTC Staff Letter No. 20-25, which revises CFTC letter 19-28 which provides time-limited relief from the swap clearing requirement and other related exceptions and exemptions.

The releases are CFTC Letter 20-23, CFTC Letter 20-24, and CFTC Letter 20-25.



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