The Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission has issued no-action relief to swap dealers (SDs) from certain business conduct standards in dealing with counterparties that are structured finance special purpose vehicles (SPVs). The relief applies if an SD has entered into a swap with an SPV counterparty prior to October 11, 2013 and, subsequently, ratings triggers in the swap agreement between the SD and SPV require the SD to take specified remedial actions. Ordinarily, the SD would have to comply with CFTC business conduct standards in taking such remedial actions because they could cause the original swap to be considered as a new swap for regulatory purposes. In CFTC Letter No. 15-21, however, DSIO has ruled that an SD does not need to comply with the external business conduct standards in taking such actions so long as certain conditions are met (including the condition that any remedial actions taken will not alter the material economic terms of the relevant swap).

CFTC Letter No. 15-21 is available here.