CFTC Staff Issues No-Action Relief for Event Contracts on Railbird Exchange and QC Clearing

The Commodity Futures Trading Commission (CFTC) announced that its Division of Market Oversight and Division of Clearing and Risk have taken a no-action position regarding swap data reporting and recordkeeping rules for event contracts. The regulatory position was issued in response to a joint request submitted by Railbird Exchange, LLC, a designated contract market (DCM), and QC Clearing LLC, a derivatives clearing organization (DCO). Under the terms outlined by the CFTC staff, the divisions will not recommend enforcement action against Railbird, QC Clearing, or their market participants for failing to comply with certain swap-related recordkeeping requirements. The relief also covers obligations to report data associated with binary option transactions and variable payout contracts to swap data repositories, provided the transactions are executed on or subject to the rules of Railbird and cleared through QC Clearing. The CFTC emphasized that this no-action position applies exclusively under narrow, specified circumstances and is consistent with relief previously granted to other similarly situated designated contract markets and clearing organizations.