The Commodity Futures Trading Commission’s Division of Clearing and Risk (DCR) has issued a time-limited no-action letter to the Singapore Exchange Derivatives Clearing Limited (SGX-DC).

In the letter, DCR states that it will not recommend that the Commission take enforcement action against SGX-DC’s clearing members for failing to comply with the Commodity Exchange Act (CEA) Section 4d(f)(1) futures commission merchant (FCM) registration requirements in carrying existing positions and accepting for clearing offsetting positions in certain commodity swaps for US customers; or SGX-DC for engaging in activities related to its clearing members carrying and accepting for clearing such positions for US customers.
 
The relief is subject to specified conditions, including expiration on the earlier of 31 March 2014, or the date upon which all US customer positions in the relevant commodity swaps have been either closed or, subject to SGX-DC becoming registered by the Commission as a derivatives clearing organisation (DCO), transferred to a clearing member that is an FCM.
 
This no-action relief is a partial extension of relief that was granted by DCR to SGX-DC and its clearing members in December 2012.  Under the 2012 no-action letter (CFTC No-Action Letter 12-63), similar relief was granted until the earlier of 31 December 2013, or the date upon which SGX-DC became a registered DCO, such date by which the positions of US customers were to be held only by clearing members that are registered FCMs.  SGX-DC’s application to register as a DCO pursuant to Section 5b(a) of the CEA is currently pending with the Commission.