CFTC Issues Notice of Expiration of Cross-Border Exemptive Relief

The CFTC’s Division of Clearing and Risk has announced that certain exemptive relief regarding the Clearing Requirement is scheduled to expire on October 9, 2013. After the expiration date, exemptive relief from the Clearing Requirement will no longer be available for an entity that is covered as a U.S. person under the CFTC’s interpretive guidance and policy statement regarding the cross-border application of the swaps provisions of the CEA.  This includes certain collective investment vehicles organized outside the U.S. Furthermore, the CFTC anticipates certain transactions to be submitted for clearing with a registered DCO as of October 10, unless an exemption or exception is available.

Lofchie Comment: The legal theory behind the ability of the CFTC to adopt the interpretative guidance as a policy statement, rather than as a rule, under the Administrative Procedure Act, is that it does not directly impose rules of conduct on market participants. This statement seems yet another indication that the interpretative guidance is in fact a rule, as expressed requirements of conduct flow from its issuance.

See: CFTC Press Release.
See also: 78 FR 140; CFTC Approves Cross-Border Guidance and Exemptive Order (July 15, 2013).