Debevoise & Plimpton

CFTC comparability determinations and no-action relief for certain foreign swap dealers and major swap participants

On 20 December 2013, the Commodity Futures Trading Commission (CFTC) approved a series of broad comparability determinations permitting substituted compliance for non-US swap dealers (SDs) and major swap participants (MSPs) in the following regulatory regimes: Australia, Canada, the European Union, Hong Kong, Japan and Switzerland (the enumerated jurisdictions). Substituted compliance refers to the circumstances under which the CFTC will permit such non-US SDs and MSPs to comply with ‘comparable and comprehensive’ regulatory requirements of their home jurisdictions with respect to certain of their swaps and swap-related activities in lieu of complying with the Commodity Exchange Act (CEA) and the CFTC regulations.

Also on 20 December, the CFTC issued a no-action letter (the SDR reporting rules letter). The SDR reporting rules letter granted temporary no-action relief from certain swap data reporting rules set forth in parts 45 and 46 of the CFTC regulations (collectively the SDR reporting rules) for SDs and MSPs that are non-US persons (as defined in the CFTC’s Cross-Border Guidance, dated 26 July 2013) established under the laws of the enumerated jurisdictions (other than Hong Kong) and that are not part of an affiliated group in which the ultimate parent entity is a US SD, US MSP, US bank, US financial holding company or US bank holding company.

Finally, on 20 December, the CFTC issued another no-action letter (the internal business conduct rules letter) granting temporary no-action relief from certain entity-level internal business conduct requirements that were not covered by the CFTC’s comparability determinations for SDs and MSPs established under the laws of the enumerated jurisdictions (other than Hong Kong) in order to provide such SDs and MSPs with an opportunity to prepare for compliance with such regulations…

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