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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 14th January 2014. It coincides with the preparation of legal challenges by SIFMA and ISDA with regard to the issuance procedure of the 14th 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.

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