Financial Services Bulletin: Action At The CFTC

by Perkins Coie

CFTC Seeks Comment on Chicago Mercantile Exchange New Swap Rules

On Wednesday, November 28, 2012, the Commodity Futures Trading Commission (the "CFTC") requested public comment on a request from the Chicago Mercantile Exchange Inc. ("CME") for approval of Rule 1001 submitted pursuant to section 40.5 of the CFTC’s regulations.  Rule 1001 provides that:

“[f]or all swaps cleared by the Clearing House, and resulting positions, creation and continuation data shall be reported to CME's swap data repository for purposes of complying with applicable CFTC rules governing the regulatory reporting of swaps.  Upon the request of a counterparty to a swap cleared at the Clearing House, the Clearing House shall provide the same creation and continuation data to a swap data repository selected by the counterparty as the Clearing House provided to CME's swap data repository under the preceding sentence[.]”

Read the CFTC press release

CFTC Issues Clearing Determination for Certain Credit Default Swaps and Interest Rate Swaps

On Wednesday, November 28, 2012, the CFTC issued new rules to require certain credit default swaps and interest rate swaps to be cleared by registered derivatives clearing organizations.  The rules establish the first clearing requirement determinations by the CFTC under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act").  The rules identify four interest rate swap classes and two credit default swap classes that are required to be cleared.  Under the rules, market participants are required to submit a swap that is identified in the rule for clearing by a derivatives clearing organization as soon as technologically practicable and no later than the end of the day of execution.

Read the CFTC press release

CFTC Issues Swaps Related No-Action Letters

On Wednesday, November 28, 2012 and Friday November 30, 2012, the CFTC issued several swap related no-action letters. 

The CFTC's Division of Swap Dealer and Intermediary Oversight ("DSIO") issued a no-action letter stating that it will not recommend that the CFTC take enforcement action against the operators of family offices for failure to register as commodity pool operators under the Commodity Exchange Act and the CFTC’s regulations, subject to certain conditions described in the letter.  DSIO also issued a time limited no-action letter that states it will not recommend that the CFTC take enforcement action against a commodity pool operator of a fund of funds for failure to register as such until the later of June 30, 2013, or six months after the effective date (or compliance date, if later) of any revised guidance that DSIO issues on the application of the de minimis thresholds to funds of funds in the context of CFTC regulations 4.5 and 4.13(a)(3), provided that the commodity pool operator files a claim for no-action relief and that claim meets certain criteria specified in the letter.

The CFTC’s Division of Clearing and Risk ("DCR") issued two time-limited no-action letters granting relief from required clearing under section 2(h)(1)(A) of the Commodity Exchange Act and the CFTC’s newly adopted Part 50 regulations for certain swaps.  The first no-action letter provides that it will not recommend an enforcement action for failure to clear a swap entered into by affiliated counterparties if one of the counterparties to the swap is majority owned by the other counterparty or both counterparties are majority owned by a third party and the financial statements of both counterparties and the third party majority owner, if any, are reported for accounting purposes on a consolidated basis.  In addition, both affiliates must agree not to clear the swap.

The second DCR no-action letter provides that it will not recommend an enforcement action for failure to clear a swap entered into by a cooperative if the cooperative and the swap meet certain conditions set forth in the no-action letter.  To qualify for the no-action relief, one of the counterparties to the swap must be a cooperative whose members are either non-financial entities or cooperatives whose members are non-financial entities.  In addition, the no-action relief only applies to swaps entered into in connection with originating loans to cooperative members or that are related to loans to, or swaps with, members.

Lastly, the CFTC’s Division of Market Oversight ("DMO") issued a time-limited no-action letter granting relief for bespoke or complex swaps, as defined by the no-action letter, from certain reporting obligations under Part 43 and Part 45 of the CFTC’s regulations.  The no-action letter provides that for bespoke or complex swaps, DMO will not recommend an enforcement action against (1) a reporting party for failure to report certain data fields required by Part 43 or (2) a reporting counterparty for failure to report certain data fields required by Part 45.  In addition, for certain bespoke or complex swaps that are uncleared inter-affiliate swaps, the letter provides no-action relief from certain confirmation data reporting obligations under Part 45.  The relief will expire on the earlier of such time that the relevant data elements can be electronically represented in the FpML (Financial products Markup Language) schema or June 30, 2013.

Read the CFTC family office press release

Read the CFTC operators of certain funds of funds press release

Read the CFTC affiliated counterparties press release

Read the CFTC certain cooperatives press release

Read the CFTC bespoke or complex swaps press release

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.

© Perkins Coie | Attorney Advertising

Written by:

Perkins Coie

Perkins Coie on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*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. Or, sign up using your email address.