On December 3, 2018, the CFTC issued an amended order exempting four additional UK-based multilateral trading facilities (MTFs) from the requirement to register with the CFTC as swap execution facilities (SEFs).

The four additional exempted MTFs are:

The amended order brings the total number of exempted MTFs and OTFs to 20 EU-authorized trading venues, as the amended order amends a December 2017 CFTC order that exempted 16 MTFs and organized trading facilities (OTFs) authorized within the European Union (EU) from the requirement to register with the CFTC as SEFs (see Legal Update, EU and CFTC Issue Equivalence Decisions on Derivatives Trading Venues).

The Commodity Exchange Act (CEA) section 5h(g) permits the CFTC to grant an exemption from the SEF registration requirement to a foreign swap exchange that it deems is subject to comparable, comprehensive supervision and regulation by the appropriate governmental authorities in the facility's home country.

Counterparties may satisfy Dodd-Frank swap exchange-trading and trade-execution requirements by executing their swap transactions on one of these EU-authorized MTFs or OTFs.

The amended order was issued in response to an August 2018 request from the European Commission's Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA). DG FISMA represented that each of the four UK-based MTFs are authorized and in good standing in an EU member state and have completed their MiFID II requirements.

On March 29, 2019, Brexit will occur in the UK, which could have the effect of requiring UK-based MTFs and new EU MTFs or OTFs to seek additional exemptions or equivalence determinations from the CFTC (see Legal Update, ISDA® Issues Report on Hard Brexit Impact on US Market Participants Registered with the CFTC).