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CFTC Reduces Marketplace Barriers For Global Development Initiatives

Date 16/05/2018

The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) today granted relief to non-US counterparties who enter into swaps with International Financial Institutions (IFIs), such as development banks.

“International financial institutions like the International Monetary Fund and North American Development Bank play a vital role in the global community by promoting infrastructure projects, encouraging employment, and reducing poverty,” said DSIO Division Director Matt Kulkin. “DSIO is providing relief so that these entities can more easily access over-the-counter derivatives markets to hedge risk associated with financing projects in developing countries in order to promote global economic growth.”

In the no-action letter, released today, DSIO announced it would not recommend that the Commission take action if non-U.S. persons do not include swaps with IFIs when determining whether such non-U.S. persons meet or exceed agency-prescribed registration thresholds. The relief granted today is consistent with the Commission’s prior treatment of IFIs for purposes of foreign futures and options transactions, the swap dealer definition, and mandatory clearing.

The IFIs referenced in the no-action letter include the North American Development Bank, International Monetary Fund, International Bank for Reconstruction and Development, European Bank for Reconstruction and Development, International Development Association, International Finance Corporation, Multilateral Investment Guarantee Agency, African Development Bank, African Development Fund, Asian Development Bank, Inter-American Development Bank, Bank for Economic Cooperation and Development in the Middle East and North Africa, Inter-American Investment Corporation, Council of Europe Development Bank, Nordic Investment Bank, Caribbean Development Bank, European Investment Bank and European Investment Fund. The IFIs listed in this letter are the same international financial institutions referenced in the Commission’s Cross-Border Guidance, with the addition of the North American Development Bank.

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