CFTC Staff Issues No-Action Relief on Event Contract Reporting for QCX and QC Clearing

The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight and Division of Clearing and Risk have announced a no-action position concerning swap data reporting and recordkeeping regulations for event contracts. The regulatory relief was granted in response to a joint request from QCX LLC, a designated contract market, and QC Clearing LLC, a derivatives clearing organization. Under the terms outlined in the no-action letter, the staff divisions will not recommend that the Commission initiate enforcement actions against QCX LLC, QC Clearing LLC, or their participants for failing to comply with certain swap-related recordkeeping mandates. Furthermore, the relief addresses failures to report data to swap data repositories regarding binary option transactions and variable payout contract transactions executed under QCX LLC rules and cleared by QC Clearing LLC. The CFTC noted that the no-action stance is restricted to narrow circumstances and is consistent with relief previously granted to other similarly situated contract markets and clearing organizations.