On July 12, the CFTC held an open meeting to consider final interpretive guidance regarding compliance with its swap regulations (the “Final Guidance”) and a related exemptive order (the “Exemptive Order”). The Exemptive Order provides limited relief to non-U.S. swap dealers and foreign branches of U.S. swap dealers; that relief will expire in stages over the next several months before ultimately terminating on December 21, 2013. The Final Guidance will also begin to take effect as certain aspects of the Exemptive Order expire and as the CFTC begins to determine that “substituted compliance” with applicable non-U.S. swap requirements is permissible. It will be critical for asset managers and other end-users of swaps to understand where they and their trading relationships fit under this framework, so that they can conform their activities to applicable CFTC requirements within the established timeframes. This alert focuses on the Exemptive Order and the Final Guidance, with a particular emphasis on how the Exemptive Order will affect swap trading relationships over the coming months.
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This article was originally published by Bingham McCutchen LLP.