The US Commodity Futures Trading Commission (CFTC) has relaxed some of its record keeping requirements to encourage more trading on swap execution facilities (SEFs).
Alongside the efforts to incentivise SEF trading, the regulator is also proposing changing its threshold rules for swap dealers and has opened a consultation on hedging of physical commodities.
The relaxed SEF rules were contained in a no-action letter, which provides relief from some recordkeeping obligations for trading on the platforms. Members of designated contract markets or SEFs that do not need to be registered with the CFTC, called covered members, will no longer need to keep electronic text messages or keep records in a form that makes them identifiable and searchable by transaction.
The proposed changes to its swap dealer rules will enable some firms using utility swaps, frequently used by pension funds, to avoid having to register as a swap dealer. The de minimis threshold for registering as a swap dealer will not take into account utility operations-related swaps where one of the counterparties is a utility special entity such as a gas or power company.
Mark Wetjen, acting chairman of the CFTC, said: “These proposals collectively reflect our continuing efforts to ensure that market regulations accomplish their intended function without creating negative, unintended consequences, in particular for commercial end-users.”