Alert July 19, 2011

CFTC Staff Grants No-Action Relief Designed to Ease Dodd-Frank Transition

The CFTC’s Division of Clearing and Intermediary Oversight and Division of Market Oversight issued a staff no-action letter designed to supplement exemptive relief from certain requirements in the Commodity Exchange Act (the “CEA”) resulting from the Dodd-Frank Act that otherwise became effective on July 16, 2011 under the terms of the Act.  The exemptive relief is discussed elsewhere in this edition of the Alert.  The no‑action letter provides relief from (1) certain segregation requirements with respect to collateral for uncleared swaps that apply to swap dealers and major swap participants; (2) certain registration requirements that apply to a derivatives clearing organization that clears swaps; and (3) requirements applicable to swap dealers and major swap participants regarding the duties and designation of a chief compliance officer.  The no-action letter notes that it does not limit the CFTC’s applicable anti-fraud and anti-manipulation authority.  The no-action relief expires upon the earlier of the effective date of rulemaking that completes the definition of relevant terms in accordance with the Dodd-Frank Act or December 31, 2011.