CFTC Grants No-Action Relief for Certain Cleared Repo Transactions

more+
less-
more+
less-
Explore:  CFTC No-Action Relief

[authors: Kevin M. Foley, Adam J. Spector]

The Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission has adopted a no-action position authorizing registered futures commission merchants (FCMs) to enter into repurchase and reverse repurchase agreements (each, a Repo) that are cleared by a securities clearing agency. Although a securities clearing agency is not a permitted counterparty under CFTC Regulation 1.25(d)(2), DCR determined that FCMs engaging in repurchase transactions, whereby the ultimate counterparty is a securities clearing agency, poses no additional credit risk to customer funds, and in fact may reduce the credit risk in the transaction.

The CFTC’s no-action letter is available here.

 

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Katten Muchin Rosenman LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×