The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight has issued No-Action Letter 13-70 providing relief to swap dealers (SDs) and major swap participants (MSPs) from (1) trading relationship documentation obligations under CFTC regulation 23.504, and (2) certain external business conduct rules, in each case with respect to swaps that are intended to be cleared (ITBC swaps). The relief is similar to the relief  provided by CFTC No-Action Letter No. 13-33, but the conditions for that relief have been significantly modified in light of changed market circumstances and improved processing of swaps from execution to clearing. As a result, No-Action Letter 13-33 has been superseded and is no longer valid.

No-Action Letter 13-70 identifies four different situations in which relief is available and  itemizes the business conduct standards covered by the  letter in Tables 1 and 2.  The specific relief afforded in the context of a particular ITBC swap depends on relevant circumstances and conditions, including whether or not the SD or MSP knows the counterparty’s identity prior to execution, whether or not the swap is executed on or subject to the rules of a swap execution facility or designated contract market, and whether or not the swap is currently cleared by a derivatives clearing organization (DCO) or subject to a mandatory clearing determination by the CFTC. In all cases, the SD or MSP must be a clearing member of the DCO where the ITBC swap will be submitted or has entered into an agreement with a DCO clearing member that clears the same types of swaps as the ITBC swap, and the SD or MSP cannot require the counterparty or its clearing futures commission merchant to enter into a breakage agreement or similar agreement as a condition to executing the swap.

CFTC Letter No. 13-70 is available here.