Two CFTC Divisions Extend Brexit No-Action Relief Through 2027

The Commodity Futures Trading Commission’s Market Participants Division and Division of Market Oversight announced on 2026년 10월 1일, that they are extending temporary no-action positions taken in response to the United Kingdom’s withdrawal from the European Union, known as Brexit. The divisions’ release states the extension is implemented through CFTC Staff Letter No. 26-28, which keeps the positions in force until 2027년 12월 31일, unless the Commission first issues UK comparability determinations or exemptive orders covering the same subject matter.

Letter 26-28 supersedes CFTC Staff Letter No. 24-11, issued 2024년 8월 8일, and amended by CFTC Staff Letter No. 26-10 on 2026년 3월 24일. The no-action positions in the new letter became effective immediately upon issuance, and no person may rely on Letter 24-11 after the new letter’s issuance.

The divisions said they continue to believe maintaining the positions is proper while the CFTC works with the relevant UK authorities to analyze UK law and, where appropriate, issue UK comparability determinations and exemptive orders for certain UK entities. The letter states it is provided in accordance with the Joint Statement by UK and US Authorities on Continuity of Derivatives Trading and Clearing Post-Brexit of 2019년 2월 25일, and the release states the letter seeks to maintain the regulatory certainty created when the CFTC originally issued EU comparability determinations and exemptive orders for certain EU entities.

MPD Position for Registered Swap Dealers

The extension is tied to four Existing Commission Actions: the 2013년 12월 27일 comparability determinations for the European Union covering certain entity-level and transaction-level requirements, the 2017년 10월 18일 comparability determination covering margin requirements for uncleared swaps for swap dealers and major swap participants, and the 2017년 12월 8일 order exempting EU-authorized multilateral trading facilities and organised trading facilities from swap execution facility registration.

Under the Market Participants Division position, the division will not recommend that the Commission take enforcement action against a registered swap dealer for failure to comply with Commission regulations found comparable in an EU comparability determination if the dealer instead complies with the UK laws and regulations incorporated pursuant to the European Union (Withdrawal) Act 2018, in the same manner and subject to the same conditions contained in the EU determinations. Because the EU laws relevant to those determinations have been incorporated into UK law under the act, MPD stated it believes temporarily extending the no-action position is warranted.

The MPD position expires upon the earlier of the effective date of any comparability determination issued by the Commission for the UK, to the extent it encompasses the subject matter of the EU comparability determinations, or 2027년 12월 31일.

DMO Positions for UK Trading Facilities

In the 2017 exemptive order, the Commission determined that the EU’s regulatory frameworks for multilateral trading facilities and organised trading facilities satisfy the standard in section 5h(g) of the Commodity Exchange Act for granting an exemption from swap execution facility registration under section 5h(a)(1) and Commission Regulation 37.3(a)(1). Facilities exempted under that provision are also eligible venues on which counterparties may satisfy the trade execution requirement of CEA section 2(h)(8).

Under the Division of Market Oversight positions, the division will not recommend enforcement action against an MTF or OTF authorized within the UK and listed in Appendix A to the letter, each an Eligible UK Facility, for failure to register as a SEF, or against a counterparty subject to the section 2(h)(8) trade execution requirement that executes a swap subject to that requirement on an Eligible UK Facility.

The positions leave other requirements intact. Swaps executed on Eligible UK Facilities remain subject to the reporting requirements of Parts 43 and 45 of the Commission’s regulations and to the swap trading eligibility requirement of CEA section 2(e). Customer positions subject to CEA section 4d, if intended to be cleared, must be cleared through a Commission-registered futures commission merchant at a registered derivatives clearing organization. Proprietary positions must be cleared through a registered DCO or a clearing organization exempted from DCO registration under CEA section 5b(h), and swaps subject to the Part 50 clearing requirement must be cleared through a registered or exempt DCO. A facility whose clearing arrangements would clear some transactions through a clearing organization that is not a registered DCO must have a rulebook rule requiring cleared transactions to be cleared consistent with those requirements as a condition of the no-action position.

Appendix A lists the UK-authorized MTFs and OTFs covered by the letter, including Bloomberg Multilateral Trading Facility Limited, Tradeweb Europe Limited MTF, Refinitiv Transaction Services Limited, EBS UK MTF, TP ICAP UK MTF and TP ICAP UK OTF, Tullett Prebon Europe MTF and Tullett Prebon Europe OTF, BGC Brokers LP – OTF, GFI Securities LTD – MTF and GFI Securities LTD – OTF, and Tradition OTF. The DMO positions expire upon the earlier of the effective date of any Commission exemptive order under CEA section 5h(g) for MTFs and OTFs authorized within the UK, or 2027년 12월 31일.

The letter recounts the underlying timeline: UK voters approved leaving the EU in a 2016년 6월 referendum, the UK submitted its Article 50 withdrawal notification on 2017년 3월 29일, the Withdrawal Agreement entered into force on 2020년 2월 1일, the UK left the EU at the end of 2020년 1월 31일, and the transition period expired on 2020년 12월 31일. The European Union (Withdrawal) Act 2018 incorporated relevant EU law into UK law and granted authority previously vested in certain EU institutions to the Financial Conduct Authority, the Bank of England including the Prudential Regulation Authority, and HM Treasury. The Financial Services and Markets Act 2023 provides for the revocation of certain retained EU law, a process the UK government has stated it expects will take a number of years.

Since 2019, the divisions have issued a series of staff letters providing no-action positions benefiting certain swap dealers and UK MTFs and OTFs, including Letters 19-08, 20-39, 21-24, 22-16, and 24-11. The letter states the Commission and the relevant UK authorities have not yet completed the work of analyzing UK law in order to replicate the Existing Commission Actions for UK entities.

In the 2019년 2월 25일 joint statement, the CFTC, the Bank of England including the PRA, and the FCA said market participants could be assured of continuity in derivatives trading and clearing between the UK and US after withdrawal. The CFTC committed that existing regulatory relief granted to EU firms, including UK firms, would be extended to UK firms at the point of withdrawal through new no-action letters, substituted compliance, and exemption orders, with temporary staff no-action relief covering any transition period until the orders could be finalized. Then-CFTC Chairman J. Christopher Giancarlo said the measures “provide a bridge over Brexit through a durable regulatory framework upon which the thriving derivatives market between the United Kingdom and the United States may continue and endure.”

Letter 26-28 represents the views of the divisions only and, under 17 CFR 140.99(a)(2), is not binding on the Commission, and the divisions retain authority to condition, modify, suspend, terminate, or restrict its terms. The letter was signed by DJ Hennes, Director of the Market Participants Division and Acting Director of the Division of Market Oversight.