CFTC No-Action Relief from SEF Trading for Package Transactions

Eversheds Sutherland (US) LLP
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Eversheds Sutherland (US) LLP

Earlier this week, the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight extended existing no-action relief from trading on a swap execution facility for package transactions until November 15, 2020. 

A “package transaction” is a transaction involving two or more instruments: (1) that is executed between two or more counterparties; (2) that is priced or quoted as one economic transaction with simultaneous or near simultaneous execution of all components; (3) that has at least one component that is a swap that is made available to trade and therefore is subject to the Commodity Exchange Act (CEA) section 2(h)(8) trade execution requirement; and (4) where the execution of each component is contingent upon the execution of all other components. 

The no-action relief that was previously granted from trading on a swap execution facility for package transactions was scheduled to expire later this month, on November 15, 2017. The new expiration date is November 15, 2020.

The prior and, now, extended, no-action relief applies to the following types of package transactions:

 

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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.

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