American Regulator Proposes LIBOR Transition Relief for Swap Transaction Report

Financial regulator the Commodity Futures Trading Commission announced this Tuesday that it has extended its LIBOR transition relief for swap transaction and pricing data report, as LIBOR is set to retire at the end of 2021.

According to the American regulator, the transition relief aims to assist specific derivatives clearing organizations (DCOs) and market participants participating in upcoming DCO auctions to transit from discounting using the Effective Federal Funds Rate (EFFR) to the Secured Overnight Financing Rate (SOFR), which is an essential part of the transition from swaps referencing LIBOR and other interbank offered rates to alternative benchmarks.

The relief allows the report of specific swaps to be delayed until November 19, 2020.

“ The relief was announced in two no-action letters: (1) CFTC Letter No. 20-32 provides relief for certain swaps executed as part of the LCH Limited discounting transition auction on October 16, 2020; and (2) CFTC Letter No. 20-33 provides relief for certain swaps executed as part of the CME Inc. discounting transition auction on October 19, 2020,” the agency further states.

Global regulators urged market participants earlier this year to prepare for LIBOR transition, and the CFTC was one of the first agencies to provide LIBOR-transition relief.