Footnote 513- CFTC Decisiveness Delayed

In a statement that will come as no surprise to even lightly-seasoned CFTC watchers, the agency yesterday issued a time-limited no-action letter with reference to” “non-U.S. SD compliance with Transaction-Level Requirements in certain situations”.  While the CFTC has studiously avoided explicit reference to the controversial Footnote 513, this is a compromise delay to enable swap dealers to graciously close the non-U.S.  affiliate “reporting loophole”.  The CFTC letter notes the representations of SD’s that “in order to avoid market disruption for their non-U.S. counterparties, additional time would be necessary to come into compliance”.

The no action relief expires on 14^th January 2014. It coincides with the preparation of legal challenges by SIFMA and ISDA with regard to the issuance procedure of the 14^th November  advisory. While this latest letter typifies the CFTC’s (necessarily) collaborative and pragmatic approach, it is perhaps disappointing that soon to be departing Chairman Gensler’s “parting-shot” should itself be itself subject to no-action relief.