The CFTC has issued no action relief for the period between 4 February to 8 May 2017 for covered swap entities entering non-cleared OTC derivative transactions with EU counterparties subject to EMIR.
Many swap dealers’ activities in the EU are covered by the CFTC’s cross-border margin rule, thus could find themselves subject to both EU and US rules absent substituted compliance. However, we still await a determination of both substituted compliance and equivalence to be made by the CFTC and European Commission respectively in relation to one another’s rules on non-cleared derivatives. The no-action relief is intended to mitigate the potential consequences for swap dealers and their buy-side counterparties until the point at which such a determination of substituted compliance is made. If members have any questions, please contact Adam Jacobs, Oliver Robinson or Adele Rentsch.