On June 4, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) issued no-action relief from introducing broker (IB) and commodity trading advisor (CTA) registration to persons located outside the United States engaged in swaps activities for specified supranational banks and development organizations, such as the International Monetary Fund and the International Bank for Reconstruction and Development (World Bank), that have offices in the United States (international financial institutions or IFIs).

The unidentified parties who sought no-action relief explained that they act as underwriters with respect to non-US offerings of structured notes issued by certain IFIs; that the IFIs generally enter into swaps to hedge the risk of their exposure under the structured notes; and that the underwriters or their non-US affiliates may facilitate (and sometimes advise on) an appropriate swap with the IFI’s preferred swap counterparty (or counterparties). Noting that the CFTC and the staff had previously granted certain exemptions to IFIs in connection with foreign futures and options transactions and swap dealing activities, DSIO granted relief from registration as an IB to persons located outside the United States solely with regard to activities involving swaps for a customer that is an IFI and as a CTA in connection with providing advice solely incidental to those activities.

Relief will expire on the date that is the later of (1) the effective date and (2) the compliance date of any final rule or CFTC order providing relief from IB and CTA registration for foreign persons who facilitate swap transactions for IFIs that have offices in the United States.

CFTC Letter No. 15-37 is available here.