CFTC Staff Issues a No-Action Letter Regarding Certain Reporting Requirements for Swaps Transitioning from USD LIBOR and Other Rates to Risk-Free Rates

In view of the upcoming termination of several London InterBank Offered Rates (LIBOR) maturities and other commonly used swap InterBank Offered Rates (IBORs), the U.S. Commodity Futures Trading Commission (CFTC) has published a press release to inform of further no-action relief measures in connection with swap transactions. Specifically, the CFTC’s Division of Data (DOD) and its Division of Market Oversight (DMO) have recommended not to take any actions against swap dealers and major swap participants that are changing the reference rate of floating-rate swaps from any tenor of the USD LIBOR, USD LIBOR ICE Swap Rates, and the Moscow Prime Offered Rate to alternative risk-free reference rates (RFRs) and not report this change within the usual time frame. However, the no-action position only applies to floating rate changes made under the ISDA LIBOR fallback provisions and provided that any change is reported within five business days following the June 30, 2023 transition.