08/12/2022 | Press release | Distributed by Public on 08/12/2022 11:26
August 12, 2022
Washington, D.C. - The Commodity Futures Trading Commission today announced that it issued a final rule modifying the Commission's interest rate swap clearing requirement under part 50 of the CFTC's regulations. The final rule removes the requirement to clear interest rate swaps referencing the London Interbank Offered Rate (LIBOR) and certain other interbank offered rates and replaces them with requirements to clear interest rate swaps referencing overnight, nearly risk-free reference rates. The final rule updates the swaps required to be submitted for clearing to a derivatives clearing organization (DCO) or an exempt DCO and the compliance dates for such swaps.
"The adoption of the final interest rate swap clearing requirement is another important milestone in the years-long global effort to facilitate a smooth transition away from reliance on LIBOR and other IBORs. The final rule promotes financial stability and mitigates systemic risk," said Chairman Rostin Behnam. "As we focus our collective efforts on the fast approaching end of LIBOR, this rule provides legal certainty and regulatory transparency for DCOs, market participants, and our fellow international authorities. This is essential to ensure cross border harmonization in the interest rate swaps market. Many thanks to the staff of the Division of Clearing and Risk for their hard work on this important contribution to the LIBOR transition effort."
The final rule amends CFTC Regulation 50.4(a) as follows:
-CFTC-