CFTC Issues No-Action Letter on Event Contract Data Reporting Requirements

On May 14, the U.S. Commodity Futures Trading Commission (CFTC) Market Oversight Division and the Clearing and Risk Division issued a “No-Action Letter” providing regulatory relief regarding data reporting and record-keeping requirements for event contracts. According to the statement, CFTC staff will not recommend enforcement action against designated contract markets (DCM), derivatives clearing organizations (DCO), and their participants, even if they fail to comply with certain record-keeping requirements related to swap transactions or do not report full collateral event contract transaction data to swap data repositories. The CFTC stated that this decision responds to requests from several exchanges and clearinghouses that list and clear event contracts. The regulatory body anticipates receiving similar applications in the future, including new requests due to changes in DCM licensing or adjustments in DCOs. Additionally, the CFTC mentioned that institutions looking to launch or clear similar event contracts in the future may apply for the same “No-Action” relief. The regulatory agency believes this move will streamline the approval process and ensure consistent treatment for market participants.

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