CFTC continues its lenience toward Yieldbroker with yet another extension


The US Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) today announced the issuance of a no-action letter extending the conditional time-limited relief provided in CFTC No-Action Letter No. 13-76 for Australian-based trading platform Yieldbroker Pty Limited (Yieldbroker).

This extension represents the latest in a series of leniencies toward the Australian exchange co-operative venture whose ownership is shared equally between institutional banking participants in the Australian and New Zealand debt markets. The firm is licensed as an exchange under an Australian Market License (AML) and is regulated by the Australian Securities and Investment Commission (ASIC). Yieldbroker operates a multilateral trading platform in Australia which brings together multiple third-party buying and selling interests in swaps. Yieldbroker currently permits direct access to U.S. persons to transact in swaps on its platform.

As a rule of thumb, the CFTC’s deadlines which are provided to firms which intend to operate under the United States’ rulings on pre and post trade processing are often stringent, with occasional time limited relief being granted under certain circumstances, once only.

Yieldbroker’s experience with the US regulatory authority has been somewhat different, highlighted by last year’s continual granting of extensions on complying with swap execution facility (SEF) requirements in order to allow the firm to align itself with the then newly implemented regulations.

Almost one year on, the DMO is still allowing Yieldbroker time to align itself rather than choosing to effect enforcement action, and will not recommend that the CFTC take enforcement action against Yieldbroker for failure to register as a swap execution facility (SEF) under section 5h(a)(1) of the Commodity Exchange Act (Act) or Commission Regulation 37.3(a)(1), or against any market participants for use of, or other relationships with, Yieldbroker, for the period expiring November 15, 2014.

Such no-action relief shall remain contingent on Yieldbroker’s satisfaction of six conditions specified in CFTC No-Action Letter No. 13-76 throughout the time-limited relief period. DMO continues to believe that predicating Yieldbroker’s relief upon satisfaction of these six conditions will help foster pre- and post-trade transparency on, and impartial access to, Yieldbroker’s trading platform during the relief period.

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CFTC continues its lenience toward Yieldbroker with yet another extension

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