On June 30, ISDA responded to the Commodity Futures Trading Commission’s (CFTC) notice of proposed rulemaking (NPR) on clearing of swaps referencing risk-free rates (RFRs).

ISDA welcomes that the CFTC took account of ISDA’s feedback on its recent request for information, provided thorough analysis and liaised with global regulators. ISDA’s response highlights the following points:

• The effective date for newly included clearing requirements (CRs) should in no event be sooner than three months after publication of the final rule;
• The effective date for the removal of US dollar LIBOR swaps from the CR should be earlier than the date when any clearing house converts any US dollar LIBOR swap;
• Consider excluding SARON swaps from the CR or, in the alternative, their effective date should be aligned to the ultimate effective date of any related Swiss CR;
• Transactions stemming from post-trade risk reduction exercises should be exempt from the clearing obligation.