The Commodity Futures Trading Commission’s Division of Market Oversight and Division of Clearing and Risk announced on May 4 that they have issued a no-action position concerning certain swap data reporting and recordkeeping regulations.
This development is important for participants in the derivatives market, as it clarifies compliance expectations for designated contract markets and clearing organizations involved in fully collateralized event contract transactions.
According to the announcement, the divisions will not recommend enforcement action against Railbird Exchange, LLC—a designated contract market—and Bitnomial Clearinghouse, LLC—a derivatives clearing organization—or their participants. This applies to failures to comply with some swap-related recordkeeping requirements or failures to report relevant data associated with fully collateralized event contract transactions executed on or subject to Railbird’s rules and cleared through Bitnomial.
The supplemental letter also removes a previous condition from CFTC Letter No. 25-26 that prohibited Railbird’s participants from clearing contracts through a third-party clearing member. The new no-action position is subject to the terms detailed in the letter issued on May 4.
This action follows a request from both Railbird Exchange and Bitnomial Clearinghouse seeking modification of CFTC Letter No. 25-26 so that it covers transactions cleared through Bitnomial and eliminates restrictions on third-party participant clearing.