On 15th September 2022, the Commodity Futures Trading Commission (CFTC) issued No-Action Relief to Taiwan Futures Exchange (TAIFEX) for its swaps central clearing services.

The relief allows TAIFEX to clear swaps for the proprietary trades of its clearing members that are U.S. persons or affiliates of U.S. persons without registering as a derivatives clearing organization (DCO) as required by the Commodity Exchange Act (CEA). TAIFEX has to report to a Swap Data Repository (SDR) data regarding the two swaps resulting from the novation of the original swap that had been submitted to TAIFEX for clearing. TAIFEX must also report the termination of the swap accepted for clearing by TAIFEX to the SDR to which the swap was originally reported. The No-Action Relief shall expire at 15th September 2023. If TAIFEX has not obtained the exemption from registration as a DCO before the expiration date, it will apply to the CFTC for an extension of the No-Action Relief to continue providing U.S. financial institutions with OTC derivatives central clearing services.

After the launch of the OTC derivatives central clearing business on 25th July this year, TAIFEX obtained the CFTC No-Action Relief on 15th September, enabling the US financial institutions to participate in Taiwan's OTC derivatives market. The letter marks a milestone for TAIFEX's central clearing business. Furthermore, TAIFEX has continued to apply to the United States, the European Union, the United Kingdom, and Canada for the recognition of Qualifying Central Counterparty (QCCP) to attract foreign financial institutions to participate in Taiwan's financial market, enhancing international competitiveness and visibility and promoting the development of Taiwan's financial market.

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