Investment Fund Law Blog
The CFTC has approved a final rule that removes reporting and recordkeeping requirements for trade option counterparties that are neither swap dealers nor major swap participants (Non-SD/MSPs). The removal of the reporting requirements also applies to commercial end users transacting in trade options connected to their business.
Regarding the reporting requirement, the annual notice reporting requirement for otherwise unreported trade options under CFTC regulation 32.3(b) has been eliminated from Form TO. Additionally, the position limit requirements referenced in regulation 32.3(c) have been eliminated.
Regarding the recordkeeping requirement, the swap-related recordkeeping requirements for Non-SD/MSPs stemming from their trade option activities have been eliminated. However, Non-SD/MSPs that transact in trade options with swap dealers or major swap participants must obtain a legal entity identifier and provide it to their swap dealer or major swap participant counterparties.
Once the Trade Options Final Rule becomes effective, upon publication of the final rule in the Federal Register, CFTC No-Action Letter 13-08 which provides conditional relief for trade option counterparties that are Non-SD/MSPs from certain swap related recordkeeping and reporting requirements will be withdrawn.
The full CFTC release can be read here.