On April 9, the Commodity Futures Trading Commission’s Division of Market Oversight (DMO) and Division of Swap Dealer and Intermediary Oversight jointly issued CFTC No-Action Letter No. 14-46, which modifies the conditions for relief from certain specified business conduct and swap trading relationship documentation requirements under Part 23 of the CFTC’s Regulations previously provided to (1) multilateral trading facilities (MTFs) seeking exemptions from swap execution facility (SEF) registration requirements of the Commodity Exchange Act (CEA), (2) parties executing swap transactions on qualifying MTFs from the trade execution and swap data reporting requirements of the CEA and Parts 43 and 45 of CFTC Regulations, respectively, and (3) swap dealers (SDs) and major swap participants (MSPs) executing swap transactions on MTFs. The conditional relief provided in Letter No. 14-46 generally tracks the conditional relief provided in CFTC No-Action Letter No. 14-16 (a Katten Client Advisory covering Letter No. 14-16 is available here), but makes several notable clarifications and changes to the conditions for relief, including, but not limited to, the following items: 

  • an MTF must report all swap transactions to a CFTC-registered or provisionally registered swap data repository as if it were a SEF, in compliance with Parts 43 and 45 of the CFTC Regulations, as a condition subsequent to qualifying for relief;
  • an MTF must certify that it is subject to and compliant with regulations that require all MTF participants to consent to the MTF’s jurisdiction, thereby enabling the MTF to effectively enforce its rules; and
  • qualifying MTFs must submit monthly reports to the CFTC summarizing levels of participation and volume by US persons.

For such relief to become effective, the DMO must issue a letter to the MTF acknowledging receipt of the request for relief. CFTC No-Action Letter No. 14-31, which originally provided additional time for MTFs to comply with the conditions for obtaining relief under Letter No. 14-16 but now applies to the conditions for relief under Letter No. 14-46, will expire on May 14. 

CFTC Letter No. 14-46 is available here.