OSTTRA Wins CFTC Relief for 3 Post-Trade Risk Services, Expanding US Derivatives Exemptions
Updated
Updated · Markets Media · Jul 6
OSTTRA Wins CFTC Relief for 3 Post-Trade Risk Services, Expanding US Derivatives Exemptions
1 articles · Updated · Markets Media · Jul 6
Summary
A CFTC no-action letter lets OSTTRA and two peers offer broader post-trade risk reduction services in the US, extending relief beyond compression to counterparty risk rebalancing and basis risk reduction.
The exemptions cover trading, clearing and reporting rules that had made non-price-forming risk-reduction trades cumbersome, especially for smaller US firms and regional banks.
OSTTRA said the relief already enabled its first digitally facilitated rebalancing run involving US and non-US clients, and also broadens off-venue execution for certain credit default swap index rebalancing.
The move brings the US closer to EU and UK treatment of these services, which OSTTRA says should improve capital efficiency, automation, liquidity and overall derivatives-market stability.