On December 18, the Division of Swap Dealer and Intermediary Oversight (DSIO), the Division of Market Oversight (DMO) and the Division of Clearing and Risk (DCR) each issued a no-action letter providing relief to market participants in preparation for the transition away from the London Interbank Offered Rate (LIBOR) and other interbank offered rates (collectively with LIBOR, IBORs). The letters identify the terms and conditions pursuant to which counterparties may be eligible for relief in connection with amending swaps to replace provisions referencing discontinued IBORs with alternative benchmarks.
Specifically, in Letter 19-26, DSIO grants relief to swap dealers from the registration de minimis threshold requirements; uncleared swap margin requirements; certain business conduct standards; requirements relating to confirmation, swap trading relationship documentation and reconciliation; and certain other eligibility requirements.
In Letter 19-27, DMO provides time-limited relief from the trade execution requirement under Section 2(h)(8) of the Commodity Exchange Act (CEA) until December 31, 2021, subject to certain conditions.
Finally, in Letter 19-28, the DCR grants time-limited relief from the swap clearing requirement under Section 2(h)(1)(A) of the CEA and CFTC regulation 50.4(a) for certain swaps executed prior to the compliance date on which swap counterparties were required to begin centrally clearing interest rate swaps. The relief expires on December 31, 2021.
More information is provided in the CFTC press release announcing the issuance of the letters, available here.