CFTC No-Action Relief from Required Clearing for Some Partial Swap Novations and Terminations

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On March 20, the CFTC issued a no-action letter providing relief from required clearing for a limited set of “stub swaps” that remain after the partial novation or partial termination of an original swap that was not required to be cleared because it was executed prior to an applicable compliance date for required clearing. Some of the conditions to the relief are: (i) the original swap must not have been cleared; (ii) the original swap was executed prior to an applicable compliance date for required clearing; (iii) the partial novation or termination may reduce only the notional amount of the original swap, with all other terms of the stub swap remaining unchanged; and (iv) the records relating to the original swap are amended solely to reflect the reduced notional amount of the swap. CFTC Release.