On Sep. 30, CFTC relief nonbank swap dealers in EU, Japan, Mexico.
CFTC issued temporary no-action letter to non-bank swap dealers domiciled in Japan, Mexico, the UK and EU, subject of pending review for comparability determinations.
Substituted compliance is acceptable for these entities, CFTC to review and compare.
Relief
To provide temporary no-action relief to 23 provisionally-registered non-bank SDs domiciled in Japan, Mexico, United Kingdom and the European Union during review.
Must remain in compliance with existing home-country capital and financial reporting requirements and provide CFTC with some financial information as required by rule.
Substituted Compliance Review
Commissioner Stump supported substituted compliance, as did acting Chair Behnam who said CFTC to review and publish comparability assessments in coming months.
Market participants will have chance to review deep CFTC analysis and comment on it.
Effectiveness
Relief to expire Oct. 6, 2022 or issuance of final capital comparability determinations.
In Jul. 2022, CFTC reported it is considering whether to extend relief, see #144005.
Aug. 2022 CFTC Extension of Relief
On Aug. 17, 2022, CFTC issued Letter No. 22-10 to extend position taken in CFTC Lt 21-20 for certain capital and financial reporting requirements for eligible swap dealers.
Follows Jul. 20, 2022 SIFMA, ISDA, IIB request for substituted compliance for capital, financial requirements for non-bank SD in Japan, Mexico, UK and European Union.
Division provided the time-limited no-action letter that expires Oct. 6, 2022, to provide time for the Commission to individually assess comparability of each jurisdiction.
Commission continues to actively consider the applications, likely to adopt proposals for public comment prior to issuing final Capital Comparability Determinations.
Due to time required for issuing the proposals for public comment, and addressing any comments received, extension of the time-limited letter is necessary and appropriate.
Extends expiration of CFTC Letter 21-20 until Oct. 1, 2024, or earlier dates as final Capital Comparability Determinations issued for each of the applicant jurisdictions.
