The Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission has issued no-action relief to allow the Chicago Mercantile Exchange (CME) to hold futures and cleared swaps customer funds at the Bank of Canada, the central bank of Canada. Pursuant to the no-action relief, CME may execute with the Bank of Canada acknowledgment letters as set forth in the no-action letter in lieu of executing an acknowledgment letter as set forth in Appendix B to CFTC Regulation 1.20. Similarly, DCR granted the CME an exemption from the requirements of CFTC Regulation 1.49(d)(3), which provides, inter alia, that customer funds may be held outside of the US in a bank or depository that has at least $1 billion in regulatory capital. As a central bank, the Bank of Canada cannot meet this regulatory capital requirement.

CFTC Letter No. 16-59 is available here.