On August 14, 2014, the Commodity Futures Trading Commission’s Division of Market Oversight (DMO) granted no-action relief to swap execution facilities (SEFs) from the confirmation and recordkeeping requirements set forth in CFTC Regulations 37.6(b), 37.1000, 37.1001, and 45.2. On April 22, DMO extended and expanded the relief to additionally include confirmation data reporting requirements set forth in CFTC Regulation 45.3(a).

Pursuant to the relief, the staff will not recommend that the CFTC bring an enforcement action if, in a confirmation provided pursuant to CFTC Regulation 37.6(b), a SEF incorporates by reference terms from previously negotiated agreements between the counterparties without having first obtained copies of such agreements. Further, DMO also will not recommend enforcement action against a SEF for failing to maintain copies of the agreements incorporated by reference in the SEF’s confirmation, as required under CFTC Regulations 37.1000, 37.1001 and 45.2(a).

In addition, the no-action relief excuses a SEF from reporting confirmation data that would otherwise be required to be reported pursuant to CFTC Regulation 45.3(a) if such data is contained solely in the terms of the underlying agreements that are incorporated by reference. However, a SEF must continue to report all terms the SEF is currently reporting pursuant to Part 45 of CFTC Regulations, even if such terms are contained in the incorporated agreements.

This relief applies only to non-cleared swap transactions executed on or pursuant to the rules of a SEF and is subject to certain conditions, including: (1) the inclusion of certain rules in the SEF’s rulebook regarding the treatment and availability of the underlying agreements and (1) the continued reporting of all primary economic terms data as required under CFTC Regulation 45.3(a)(1).

This relief is set to expire on March 31, 2016.

CFTC Letter No. 15-25 is available here.