9.4.20
On August 31, the Commodity Futures Trading Commission (CFTC) issued a no-action letter that provides additional relief to swap dealers and other market participants related to the transition away from LIBOR. The letter, No-Action Letter 20 – 23, allows market participants to amend swaps that use LIBOR or other interbank offered rates (IBORs) in order to replace the rate with an alternative benchmark without the swap being treated as a new swap subject to the current regime of swap regulations. In addition to providing relief surrounding certain swap amendments, the CFTC’s letter also recommends no enforcement actions against swap dealers who fail to comply with certain criteria to the extent that the compliance relates to benchmark replacement. “Today’s relief will help smooth the transition away from IBORs, particularly with respect to older, legacy swaps that are sitting on the books of dealers and their clients, and in particular end-users around the world,” said CFTC Chairman Heath P. Tarbert.