LCH.Clearnet spared enforcement action by CFTC for clearing swaps prior to approval

The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Clearing and Risk (DCR) today issued a further extension of time-limited no-action relief to LCH.Clearnet Limited, a derivatives clearing organization (DCO) registered under Section 5b of the Commodity Exchange Act.

In the extension of CFTC Letter 13-52, DCR states that it will not recommend that the CFTC take enforcement action against LCH.Clearnet for clearing certain swaps executed on, or subject to the rules of, designated contract markets (DCMs) or swap execution facilities (SEFs) (collectively, DCM/SEF Swaps), or clearing members of LCH.Clearnet for clearing DCM/SEF Swaps through LCH.Clearnet.

The extension of no-action relief will expire at the earlier of December 31, 2014, or the date upon which the Commission approves or denies LCH.Clearnet’s application for an amended DCO registration order to permit it to clear DCM/SEF Swaps.

LCH.Clearnet has concentrated significant effort over recent months on aligning itself with new regulatory structures in North America and Europe, with its European division having recently been granted approval under the European Market Infrastructure Regulation (EMIR) set of rulings.

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