Washington D.C. – The Commodity Futures Trading Commission (CFTC) announced today a temporary reprieve from certain swap reporting requirements, potentially shielding counterparties from enforcement actions through December 2, 2025. The decision, formalized in a no-action letter issued by the Division of Market Oversight (DMO), centers on swaps cleared through specific Derivatives Clearing Organizations (DCOs).
The relief applies to entities utilizing “Relief DCOs” – those operating under existing CFTC exemptive orders or prior no-action letters issued by the Division of Clearing and Risk. These DCOs are essentially granted exceptions to standard regulations, and the CFTC is extending that leniency to their counterparties regarding compliance with Part 45 of CFTC regulations, which govern swap reporting.
Specifically, the DMO stated it will not recommend enforcement action against these counterparties for failing to meet certain Part 45 reporting obligations until one of three conditions is met: the December 2, 2025 deadline, the revocation or expiration of the exemptive order or no-action letter granted to the DCO, or a direct Commission action that nullifies the current no-action position.
While not a penalty or charge against any specific individual or firm, the announcement highlights ongoing complexities in the implementation of swap reporting rules following the 2008 financial crisis and the passage of the Dodd-Frank Act. The CFTC continues to grapple with ensuring comprehensive reporting while accommodating the operational challenges faced by market participants and clearing organizations.
The agency indicated that this move aims to provide clarity and stability to the market, preventing potential disruptions stemming from strict enforcement of reporting requirements during a period of ongoing regulatory adjustments. The CFTC stressed that this is a temporary measure and counterparties are still expected to ultimately comply with all applicable regulations.
Source: CFTC.gov
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