# CFTC Letter No. 25-12: No-action positions in relation to the Commission’s swap clearing and uncleared swap margin requirements in connection with a court-supervised transfer, pursuant to the laws of the United Kingdom, of certain legacy sw..

> Federal · Agency guidance · In force

URL: https://www.frixlaw.com/law-library/statutes/CFTC_L25_12

## Section

- **Citation:** CFTC Letter No. 25-12
- **Heading:** No-action positions in relation to the Commission’s swap clearing and uncleared swap margin requirements in connection with a court-supervised transfer, pursuant to the laws of the United Kingdom, of certain legacy sw..
- **Jurisdiction:** Federal
- **Kind:** Agency guidance
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** CFTC Staff Letters (2008-present) / No-action positions in relation to the Commission’s swap clearing and uncleared swap margin requirements in connection with a court-supervised transfer, pursuant to the laws of the United Kingdom, of certain legacy sw...

## Text

Summary: No-action positions in relation to the Commission’s swap clearing and uncleared swap margin requirements in connection with a court-supervised transfer, pursuant to the laws of the United Kingdom, of certain legacy swaps from Credit Suisse International to UBS AG London Branch following the merger of UBS Group AG and Credit Suisse Group AG.

CFTC Letter No. 25-12 No-Action April 15, 2025

Re: No-Action Position with Respect to Compliance with 17 CFR §§ 23.150 - 23.161
(“CFTC Margin Rule”) and Commodity Exchange Act (“CEA”) § 2(h)(1)(A) and 17
CFR § 50.2 and § 50.4 (together, the “Clearing Requirement”) for Certain Legacy
Swaps Transferred under Part VII of The Financial Services and Markets Act of 2000
in Connection with the Integration of UBS Group and Credit Suisse Group

I.
Introduction

The Market Participants Division (“MPD”) and the Division of Clearing and Risk (“DCR”
and together with MPD, the “Divisions”) of the Commodity Futures Trading Commission
(“CFTC” or “Commission”) are issuing this letter in response to UBS AG’s request for a no-
action letter1 under Commission regulation 140.99.2 UBS AG requested the no-action letter on
behalf of (a) itself and (b) counterparties (“Covered Counterparties”) to certain legacy swaps
discussed below (together, the “Residual Portfolio”) that are to be transferred by operation of
English law by Credit Suisse International (“CSI”) to UBS AG London Branch through a Part
VII Transfer (as defined below), in connection with the merger of UBS Group AG (“UBS”) and
Credit Suisse Group AG (“CS”) (“UBS-CS Merger”) and the winding down of CSI
d Counterparties”) to certain legacy swaps
discussed below (together, the “Residual Portfolio”) that are to be transferred by operation of
English law by Credit Suisse International (“CSI”) to UBS AG London Branch through a Part
VII Transfer (as defined below), in connection with the merger of UBS Group AG (“UBS”) and
Credit Suisse Group AG (“CS”) (“UBS-CS Merger”) and the winding down of CSI. Specifically,
UBS AG requests that the Divisions provide a no-action letter stating that with respect to this Part
VII Transfer of legacy swaps in the Residual Portfolio they will not recommend enforcement
action to the Commission for non-compliance with: (a) the CFTC Margin Rule, by Covered
Counterparties that are swap dealers (“SDs”) for which there is no prudential regulator3 (“Covered

1 Letter from UBS AGto Thomas Smith, Acting Director MPD, and Richard Haynes, Acting Director DCR, dated
April 4, 2025 (“UBS Letter”).
2 17 CFR 140.99.
3 The CFTC Margin Rule applies only to SDs and major swap participants for which there is not a prudential regulator.
See 7 U.S.C. 6s(e)(1)(B). SDs and major swap participants for which there is a prudential regulator must meet the
margin requirements for uncleared swaps established by the applicable prudential regulator. 7 U.S.C. 6s(e)(1)(A).
See also 7 U.S.C. 1a(39) (defining the term “Prudential Regulator” to include the Board of Governors of the Federal
Reserve System; the Office of the Comptroller of the Currency; the Federal Deposit Insurance Corporation; the Farm
Credit Administration; and the Federal Housing Finance Agency). The Prudential Regulators published final margin
requirements in November 2015. See Margin and Capital Requirements for Covered Swap Entities, 80 FR 74840

U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-5000
www.cftc.gov

Market Participants
Division
Thomas J
n; and the Federal Housing Finance Agency). The Prudential Regulators published final margin
requirements in November 2015. See Margin and Capital Requirements for Covered Swap Entities, 80 FR 74840

U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-5000
www.cftc.gov

Market Participants
Division
Thomas J. Smith
Acting Director

Division of Clearing
and Risk
Richard Haynes
Acting Director

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SD Counterparties”); and (b) the Clearing Requirement, by UBS AG and Covered Counterparties
subject to the Clearing Requirement (“Covered Clearing Counterparties”).4
II.
CFTC Regulatory Background
(1)
Margin

Section 4s(e) of the CEA directs the Commission to adopt rules establishing minimum
initial and variation margin requirements on all swaps5 that are (i) entered into by an SD for which
there is no Prudential Regulator (such SDs are collectively referred to as “CSEs”) and (ii) not
cleared by a registered derivatives clearing organization (“DCO”) (“uncleared swaps”).6 To this
end, the Commission promulgated rules in 2016,7 establishing requirements for a CSE to collect
and post initial margin and variation margin for uncleared swaps. These requirements vary based
on the type of counterparty to such swaps and the location of the CSE and its counterparty.8 These
requirements also generally apply only to uncleared swaps entered into on or after the compliance
date applicable to a particular CSE and its counterparty (each a “covered swap”).9 An uncleared

(Nov. 30, 2015). The prudential margin requirements are codified in the regulations of each Prudential Regulator in
the Code of Federal Regulations (the “Prudential Margin Rule”). The Prudential Margin Rule is similar to the CFTC
Margin Rule, including with respect to the CFTC’s phasing-in of margin requirements, as discussed below
nd its counterparty (each a “covered swap”).9 An uncleared

(Nov. 30, 2015). The prudential margin requirements are codified in the regulations of each Prudential Regulator in
the Code of Federal Regulations (the “Prudential Margin Rule”). The Prudential Margin Rule is similar to the CFTC
Margin Rule, including with respect to the CFTC’s phasing-in of margin requirements, as discussed below. To the
extent that UBS AG or the other parties to a transferred legacy swap are subject to the Prudential Margin Rule, the
legacy swap may become subject to the margin requirements of the Prudential Margin Rule as a result of the Part VII
Transfer, and they may need relief from that rule from the applicable Prudential Regulator(s) to continue treating such
swaps as legacy swaps. Any such relief is outside the scope of this letter, which is limited solely to the no-action
positions provided herein.
4 See UBS Letter.
5 For the definition of swap, see section 1a(47) of the CEA and Commission regulation 1.3. 7 U.S.C. 1a(47) and 17
CFR 1.3. The “swap” definition includes, among other things, an interest rate swap, commodity swap, credit default
swap, and currency swap.
6 7 U.S.C. 6s(e)(2)(B)(ii). In Commission regulation 23.151, the Commission further defined uncleared swaps to
mean those swaps that are not cleared by a registered DCO or a DCO that the Commission has exempted from
registration as provided under the CEA. 17 CFR 23.151.
7 See Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants, 81 FR 636 (Jan. 6,
2016) (“CFTC Margin Release”); see, also Margin Requirements for Uncleared Swaps for Swap Dealers and Major
Swap Participants – Cross-Border Application of the Margin Requirements, 81 FR 34818 (May 31, 2016).
8 See Commission regulations 23.152 and 23.153, 17 CFR 23.152 and 23.153
7 See Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants, 81 FR 636 (Jan. 6,
2016) (“CFTC Margin Release”); see, also Margin Requirements for Uncleared Swaps for Swap Dealers and Major
Swap Participants – Cross-Border Application of the Margin Requirements, 81 FR 34818 (May 31, 2016).
8 See Commission regulations 23.152 and 23.153, 17 CFR 23.152 and 23.153. For example, the CFTC Margin Rule
does not require a CSE to collect margin from, or post margin to, a counterparty that is neither a swap entity nor a
financial end user (each as defined in 17 CFR 23.151). Pursuant to section 2(e) of the CEA, 7 U.S.C. 2(e), each
counterparty to an uncleared swap must be an eligible contract participant, as defined in section 1a(18) of the CEA, 7
U.S.C. 1a(18). See Commission regulation 23.160 on the cross-border application of the CFTC Margin Rule. 17 CFR
23.160.
9 Pursuant to Commission regulation 23.161, compliance dates for the CFTC Margin Rule are staggered such that
CSEs must come into compliance in a series of phases. The first phase affected CSEs and their counterparties, each
with the largest aggregate outstanding notional amounts of uncleared swaps and certain other financial products.
These CSEs began complying with both the initial and variation margin requirements of the CFTC Margin Rule on
September 1, 2016. The second phase began March 1, 2017, and required CSEs to comply with the variation margin
requirements of Commission regulation 23.153 with all relevant counterparties not covered in the first phase. See 17
uncleared swaps and certain other financial products.
These CSEs began complying with both the initial and variation margin requirements of the CFTC Margin Rule on
September 1, 2016. The second phase began March 1, 2017, and required CSEs to comply with the variation margin
requirements of Commission regulation 23.153 with all relevant counterparties not covered in the first phase. See 17

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swap entered into prior to a CSE’s applicable compliance date for a particular counterparty (each
a “Margin Legacy Swap”) is generally not subject to the margin requirements in the CFTC
Margin Rule.10
To the extent that more than one uncleared swap is executed between a CSE and its covered
counterparty, the CFTC Margin Rule permits the netting of required margin amounts of each swap
under certain circumstances.11 In particular, the CFTC Margin Rule, subject to certain limitations,
permits a CSE to calculate initial margin and variation margin, respectively, on an aggregate net
basis across uncleared swaps that are executed under the same eligible master netting agreement
(“EMNA”). Moreover, the CFTC Margin Rule permits swap counterparties to identify one or
more separate netting portfolios (i.e., a specified group of uncleared swaps the margin obligations
of which will be netted only against each other) under the same EMNA, including having separate
netting portfolios for covered swaps and Margin Legacy Swaps.12 A netting portfolio that contains
only Margin Legacy Swaps is not subject to the initial and variation margin requirements set out
in the CFTC Margin Rule.13 However, if a netting portfolio contains any covered swaps, the entire
netting portfolio (including all Margin Legacy Swaps) is subject to such requirements.14

A Margin Legacy Swap may lose its legacy treatment under the CFTC Margin Rule,
causing it to become a covered swap and causing any netting portfolio in which it is included to
be subject to the requirements of the CFTC Margin Rule
3 However, if a netting portfolio contains any covered swaps, the entire
netting portfolio (including all Margin Legacy Swaps) is subject to such requirements.14

A Margin Legacy Swap may lose its legacy treatment under the CFTC Margin Rule,
causing it to become a covered swap and causing any netting portfolio in which it is included to
be subject to the requirements of the CFTC Margin Rule. For reasons discussed in the CFTC
Margin Release, the Commission elected not to extend the meaning of Margin Legacy Swaps to
include (1) Margin Legacy Swaps that are amended in a material or nonmaterial manner; (2)
novations of Margin Legacy Swaps; and (3) new swaps that result from portfolio compression of
Margin Legacy Swaps.15 Therefore, and as relevant here, a Margin Legacy Swap that is novated
after the applicable compliance date may become a covered swap subject to the initial and variation
margin requirements in the CFTC Margin Rule. In that case, netting portfolios that were intended

CFR 23.161. On each September 1 thereafter (ending with September 1, 2022), CSEs have been required to comply
with the initial margin requirements with counterparties with successively lesser outstanding notional amounts.
10 See CFTC Margin Release, 81 FR at 651, and Commission regulation 23.161. 17 CFR 23.161.
11 See CFTC Margin Release, 81 FR at 651, and Commission regulations 23.152(c) and 23.153(d). 17 CFR 23.152(c)
and 23.153(d).
12 See CFTC Margin Release, 81 FR at 651, and Commission regulations 23.152(c)(2)(ii) and 23.153(d)(2)(ii). 17
CFR 23.152(c)(2)(ii) and 23.153(d)(2)(ii).
13 Id.
14 Id.
15 See CFTC Margin Release, 81 FR at 675. Certain limited relief and no-action positions have been given in
relation to this standard. See, e.g., Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap
Participants, 83 FR 60341 (Nov. 26, 2018); CFTC Staff Letter No. 17-52 (Oct. 27
2(c)(2)(ii) and 23.153(d)(2)(ii). 17
CFR 23.152(c)(2)(ii) and 23.153(d)(2)(ii).
13 Id.
14 Id.
15 See CFTC Margin Release, 81 FR at 675. Certain limited relief and no-action positions have been given in
relation to this standard. See, e.g., Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap
Participants, 83 FR 60341 (Nov. 26, 2018); CFTC Staff Letter No. 17-52 (Oct. 27. 2017), available at
http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/17-52.pdf; and “CFTC Statement on
Swaps Rules Implicated in Recent Bank Failures” (Mar. 16, 2023), available at
https://www.cftc.gov/PressRoom/SpeechesTestimony/commissionstatement031623.

Page 4

to contain only Margin Legacy Swaps and, thus, not be subject to the CFTC Margin Rule may
become so subject.
(2)
Clearing Requirement

Section 2(h)(1)(A) of the CEA states that “[i]t shall be unlawful for any person to engage
in a swap unless that person submits such swap for clearing to a [DCO] that is registered under
[the CEA] or a [DCO] that is exempt from registration under [the CEA] if the swap is required to
be cleared.”16 In 2012, the Commission issued a Clearing Requirement Determination, which
requires market participants to clear two classes of credit default swaps and four classes of interest
rate swaps.17 In 2016, the Commission issued a second Clearing Requirement Determination,
which expanded the Clearing Requirement to include additional interest rate swaps.18

Like the CFTC Margin Rule, the Commission’s Clearing Requirement Determinations
established a series of compliance dates to phase-in compliance with the Clearing Requirement.19
Commission regulation 50.5 provides that swaps entered into before July 21, 2010, or the
application of the Clearing Requirement for a particular class of swaps are not subject to the
Clearing Requirement so long as such swaps are reported to a swap data repository (“Clearing
Legacy Swaps” and together with Margin Legacy Swaps, “Legacy Swaps”).20
ompliance with the Clearing Requirement.19
Commission regulation 50.5 provides that swaps entered into before July 21, 2010, or the
application of the Clearing Requirement for a particular class of swaps are not subject to the
Clearing Requirement so long as such swaps are reported to a swap data repository (“Clearing
Legacy Swaps” and together with Margin Legacy Swaps, “Legacy Swaps”).20

The Commission clarified that the Clearing Requirement applies to all new swaps, as well
as changes in the ownership of a swap, including assignment, novation, exchange, transfer, or
conveyance.21
III.
Background on UBS-CS Merger and Summary of Request for No-Action Position
Based on the representations made by UBS AG, we understand the relevant facts to be as follows:
(1)
In March 2023, CS was under severe financial distress. Therefore, the Swiss Federal
Department of Finance, the Swiss National Bank, and the Swiss Financial Market
Supervisory Authority requested that UBS and CS consider a takeover of CS by UBS to
restore necessary confidence in the stability of the Swiss economy and banking system and
to serve the best interests of the shareholders and stakeholders of UBS and CS. On March

16 7 U.S.C. § 2(h)(1)(A).
17 See Clearing Requirement Determination Under Section 2(h) of the CEA, 77 FR 74284, 74315-16, 74336-37 (Dec.
13, 2012) (establishing Commission regulation 50.4, which sets forth the classes of swaps that are required to be
cleared).
18 See Clearing Requirement Determination Under Section 2(h) of the Commodity Exchange Act for Interest Rate
Swaps, 81 FR 71202 (Oct. 14, 2016) (expanding the Clearing Requirement to include fixed-to-floating interest rate
swaps in nine additional currencies and making certain other modifications to the scope of the 2012 Clearing
Requirement).
19 See 77 FR at 74319-20; 81 FR at 71226-30.
20 17 CFR 50.5.
21 See 77 FR at 74316.
ation Under Section 2(h) of the Commodity Exchange Act for Interest Rate
Swaps, 81 FR 71202 (Oct. 14, 2016) (expanding the Clearing Requirement to include fixed-to-floating interest rate
swaps in nine additional currencies and making certain other modifications to the scope of the 2012 Clearing
Requirement).
19 See 77 FR at 74319-20; 81 FR at 71226-30.
20 17 CFR 50.5.
21 See 77 FR at 74316.

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19, 2023, the firms subsequently entered into a merger agreement, resulting from further
negotiations and support from distinct government guarantees and measures.

(2)
On June 12, 2023, UBS acquired CS, succeeding by operation of Swiss law to all assets
and liabilities of CS, and became the direct or indirect shareholder of all the former direct
and indirect subsidiaries of CS, including CSI. Since that time, UBS has been taking steps
to integrate the two groups, principally by consolidating the combined businesses within
various pre-existing UBS subsidiaries, including UBS AG. As part of this broader
initiative (“UBS-CS Integration”), UBS is seeking to wind down various pre-existing CS
subsidiaries, including CSI, which is currently in solvent wind down.

(3)
In furtherance of its effort to wind down CSI, UBS is pursuing a transfer of trading assets
and liabilities (including the Residual Portfolio22) from CSI to UBS AG London Branch,
pursuant to a court-sanctioned, banking business transfer scheme under Part VII of The
Financial Services and Markets Act of 2000 (“FSMA”)23 (“Part VII Transfer”).24
which is currently in solvent wind down.

(3)
In furtherance of its effort to wind down CSI, UBS is pursuing a transfer of trading assets
and liabilities (including the Residual Portfolio22) from CSI to UBS AG London Branch,
pursuant to a court-sanctioned, banking business transfer scheme under Part VII of The
Financial Services and Markets Act of 2000 (“FSMA”)23 (“Part VII Transfer”).24

(4)
The Part VII Transfer requires: (i) extensive engagement with the UK regulators, namely,
the Financial Conduct Authority (“FCA”) and the Prudential Regulation Authority
(“PRA”) in relation to the transfer and related court documents; (ii) a certificate from the
PRA (or, in certain circumstances, the FCA or equivalent foreign supervisory authority) to
be issued in relation to the transferee’s financial resources; and (iii) the approval of the
court which has jurisdiction in relation to the UK authorized person (the transferor, i.e.,
CSI).25 Upon the court’s approval (which takes the form of a court order), all property and
all liabilities specified in the court order are transferred by operation of law from the
transferor to the relevant transferee by virtue of the court order.26 In this instance, the
transfer under Part VII will take place on a bulk basis in a series of tranches, not trade-by-
trade.

22 As of March 31, 2025, CSI had 10 Covered Counterparties with respect to its Margin Legacy Swaps, and it had 12
Covered Counterparties with respect to its Clearing Legacy Swaps. Further, it had not more than 545 outstanding
Margin Legacy Swaps and not more than 220 outstanding Clearing Legacy Swaps.
23 Financial Services and Markets Act of 2000 (c.8), Part VII, s. 106 (UK), available at
https://www.legislation.gov.uk/ukpga/2000/8/part/VII
erparties with respect to its Margin Legacy Swaps, and it had 12
Covered Counterparties with respect to its Clearing Legacy Swaps. Further, it had not more than 545 outstanding
Margin Legacy Swaps and not more than 220 outstanding Clearing Legacy Swaps.
23 Financial Services and Markets Act of 2000 (c.8), Part VII, s. 106 (UK), available at
https://www.legislation.gov.uk/ukpga/2000/8/part/VII.
24 A banking business transfer scheme under Part VII of FSMA is a statutory procedure under English law that
enables United Kingdom (“UK”) authorized persons that have permission to accept deposits (such as CSI) (section
106(2)(a) of FSMA) to transfer their business, in whole or in part (provided deposit-taking business is included in
the business to be transferred), to one or more other persons without the need to obtain the consent of third parties
affected by the transfer (such as the transferor’s customers and contractual counterparties). Part VII of FSMA has a
similar mechanism for insurance business transfer schemes.
25 FSMA, s. 111.
26 FSMA, s. 112(3).

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(5)
CSI’s Covered Counterparties will have the right to participate in the Part VII proceedings,
and they will be entitled to object to the Part VII Transfer,27 but they are not applicants
(within the meaning of section 107(2) of FSMA)28 nor will their consent to or approval of
the transfer be required in order for the court to approve and effect the transfer. However,
in relation to Covered Counterparties to swaps in the Residual Portfolio that are executed
under master agreements that are governed by New York law, UBS AG intends, as a
precautionary measure for good counterparty relationship management purposes and
without being obliged to do so, to obtain confirmation from the relevant counterparty that
it does not object to the inclusion of its master agreement in the Part VII Transfer.
ties to swaps in the Residual Portfolio that are executed
under master agreements that are governed by New York law, UBS AG intends, as a
precautionary measure for good counterparty relationship management purposes and
without being obliged to do so, to obtain confirmation from the relevant counterparty that
it does not object to the inclusion of its master agreement in the Part VII Transfer.

(6)
As a result of the Part VII Transfer, CSI’s Legacy Swaps will be transferred to and remain
within UBS, and their transfer will not be accompanied by any changes to contractual terms
that are significant to the economic substance or market value of the swaps (other than the
replacement of CSI with UBS AG London Branch as a party thereto), including payment
amount calculation methods, maturity dates or notional amounts.29

(7)
The Part VII Transfer is proposed to minimize disruption to and impact on Covered
Counterparties and their Legacy Swaps, including reducing costs and liquidity concerns in
a manner that would not increase systemic risk or impact markets. UBS AG expects that
most Covered Counterparties will view the transfer under Part VII as a risk reduction, as a
UBS group entity will be their counterparty instead of CSI. If Covered Counterparties’
Legacy Swaps were to remain in CSI, they would be facing an entity that is not conducting
new business. According to UBS AG, this could be detrimental to these counterparties
because they would not be able to benefit from advantages such as consolidated netting
sets or streamlined operational processes (e.g., periodic client reviews or margin calls
against a single entity) that may be available to them in the medium term if they were
facing UBS AG. Further, UBS AG stated that this would also not be a desirable outcome
for them as keeping the Legacy Swaps in CSI would impede UBS’s ability to execute on
its legal entity integration and simplification plan centered around its core, on-going
entities.
riodic client reviews or margin calls
against a single entity) that may be available to them in the medium term if they were
facing UBS AG. Further, UBS AG stated that this would also not be a desirable outcome
for them as keeping the Legacy Swaps in CSI would impede UBS’s ability to execute on
its legal entity integration and simplification plan centered around its core, on-going
entities.

(8)
The proposed Part VII Transfer will not involve any exercise of discretion by or require
any bilateral agreement or consent by Covered Counterparties; instead, their Legacy Swap
positions will move to UBS AG by operation of English law.

In light of the foregoing and in order to facilitate the UBS-CS Integration and the related winddown
of CSI, in relation to the transfer of the Residual Portfolio, UBS AG has requested that the
Divisions issue a no-action letter pursuant to 17 CFR 140.99 confirming that the Divisions will
not recommend that the Commission commence enforcement action against UBS AG or its

27 See FSMA, s. 110(1)(b).
28 FSMA, s. 107(2).
29 The court may, however, approve minor, administrative changes to the contracts.

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Covered Counterparties for failure to comply with the CFTC Margin Rule or the Clearing
Requirement to the extent that those requirements would apply to a Legacy Swap solely as a result
of the Part VII Transfer.
IV.
MPD Staff Position
After carefully considering the request and the related facts and circumstances, MPD believes that
a no-action position is warranted. Specifically, MPD believes that, given the unique circumstances
surrounding and motivating the UBS-CS Merger and the Part VII Transfer, it is appropriate to
provide a no-action position for Margin Legacy Swaps with respect to the CFTC Margin Rule to
the extent any amendments thereto are made solely to transfer such swaps from CSI to UBS AG
London Branch in connection with the UBS-CS Integration via the described Part VII Transfer
n the unique circumstances
surrounding and motivating the UBS-CS Merger and the Part VII Transfer, it is appropriate to
provide a no-action position for Margin Legacy Swaps with respect to the CFTC Margin Rule to
the extent any amendments thereto are made solely to transfer such swaps from CSI to UBS AG
London Branch in connection with the UBS-CS Integration via the described Part VII Transfer.
Accordingly, MPD will not recommend that the Commission take an enforcement action against
a Covered SD Counterparty for failure to comply with the CFTC Margin Rule with respect to a
Margin Legacy Swap in the Residual Portfolio solely to the extent that such compliance would be
required as a result of a transfer of the swap from CSI to UBS AG London Branch, entered into
under the following conditions:
(1)
The transfer is made pursuant to the Part VII Transfer relating to the winddown of CSI;
(2)
A Covered SD Counterparty is a remaining party to the swap;
(3)
No amendment is made to the swap other than (a) as approved by a UK court under the
Part VII Transfer and (b) immaterial amendments necessary to facilitate the Part VII
Transfer; and
(4)
The transfer takes effect no earlier than the date of this letter.
V.
DCR Staff Position
After carefully considering the request and the related facts and circumstances, DCR also believes
that, given the unique circumstances surrounding and motivating the UBS-CS Merger and the Part
VII Transfer, a no-action position is appropriate for Clearing Legacy Swaps with respect to the
Clearing Requirement to the extent any amendments thereto are made solely to transfer such swaps
from CSI to UBS AG London Branch in connection with the UBS-CS Integration via the described
Part VII Transfer
at, given the unique circumstances surrounding and motivating the UBS-CS Merger and the Part
VII Transfer, a no-action position is appropriate for Clearing Legacy Swaps with respect to the
Clearing Requirement to the extent any amendments thereto are made solely to transfer such swaps
from CSI to UBS AG London Branch in connection with the UBS-CS Integration via the described
Part VII Transfer. Accordingly, DCR will not recommend that the Commission take an
enforcement action against UBS AG or any Covered Clearing Counterparty for failure to comply
with the Clearing Requirement with respect to a Clearing Legacy Swap solely to the extent that
such compliance would be required as a result of a transfer of the swap from CSI to UBS AG
London Branch, entered into under the following conditions:
(1)
The transfer is made pursuant to the Part VII Transfer relating to the winddown of CSI;
(2)
No amendment is made to the swap other than (a) as approved by a UK court under the
Part VII Transfer and (b) immaterial amendments necessary to facilitate the Part VII
Transfer; and
(3)
The transfer takes effect no earlier than the date of this letter.

Page 8

This letter, and the positions taken herein, represent the views of the Divisions only, and do not
necessarily represent the position or view of the Commission or of any other office or division of
the Commission. This letter and the no-action position taken herein are not binding on the
Commission.30 Further, this letter, and the positions taken herein, are based upon the facts and
circumstances presented to staff of the Divisions. Any different, changed or omitted material facts
or circumstances might render the position taken in this letter void. Finally, as with all staff letters,
each Division retains the authority to condition further, modify, suspend, terminate, or otherwise
restrict the terms of the position taken herein, in its discretion
sed upon the facts and
circumstances presented to staff of the Divisions. Any different, changed or omitted material facts
or circumstances might render the position taken in this letter void. Finally, as with all staff letters,
each Division retains the authority to condition further, modify, suspend, terminate, or otherwise
restrict the terms of the position taken herein, in its discretion.
If you have any questions concerning this correspondence, please contact Frank Fisanich, Chief
Counsel, MPD, at (202) 418-5949 or ffisanich@cftc.gov; Jacob Chachkin, Associate Chief
Counsel, MPD, at (202) 418-5496 or jchachkin@cftc.gov; or Sarah Josephson, Deputy Director,
DCR, at (202) 418-5864 or sjosephson@cftc.gov.

Sincerely,

___________________________________
Thomas J. Smith
Acting Director
Market Participants Division

___________________________________
Richard Haynes
Acting Director
Division of Clearing and Risk

cc:
Kathleen Clapper, Compliance
National Futures Association, Chicago

Michael Otten, OTC Derivatives
National Futures Association, New York

30 See § 140.99(a)(2), 17 CFR 140.99(a)(2) (“A no-action letter binds only the issuing Division . . . and not the
Commission or other Commission staff.”).

## Nearby sections

- [CFTC Letter No. 08-03 Eurex Deutschlands Request for No-Action Relief in Connection with the Offer and Sale in the United States of Eight Futures Contracts Based on Security Indices Derived from the Dow Jones STOXX 600 Index.](https://www.frixlaw.com/law-library/statutes/CFTC_L08_03.md)
- [CFTC Letter No. 08-05 Eurex Deutschlands Request for No-Action Relief in Connection with the Offer and Sale in the United States of its Futures Contract Based on the RDXxt USD-RDX Extended Index.](https://www.frixlaw.com/law-library/statutes/CFTC_L08_05.md)
- [CFTC Letter No. 08-11 Euronext Paris SAs request for no-action relief in connection with the offer and sale in the United States of its futures contracts based on the FTSE EPRA/NAREIT Europe Index and the FTSE EPRA/NAREIT Euro Zone Index.](https://www.frixlaw.com/law-library/statutes/CFTC_L08_11.md)
- [CFTC Letter No. 08-13 Eurex Deutschlands Request for No-Action Relief in Connection with the Offer and Sale in the United States of its Futures Contracts Based on the SLI Swiss Leader Index, the Swiss Market Index Midcap, the Dow Jones Eur...](https://www.frixlaw.com/law-library/statutes/CFTC_L08_13.md)
- [CFTC Letter No. 08-15 The Division of Clearing and Intermediary Oversight granted exemptive relief from certain of the Part 4 regulations to the registered CPO of a commodity pool, whose shares the CPO intended to publicly offer and to lis...](https://www.frixlaw.com/law-library/statutes/CFTC_L08_15.md)
- [CFTC Letter No. 08-17 DCIO received a request for guidance from the Joint Audit Committee concerning FCM regulatory reporting requirements for investments in a money market mutual fund. The fund had announced that its net asset value per s...](https://www.frixlaw.com/law-library/statutes/CFTC_L08_17.md)
- [CFTC Letter No. 08-18 The Division of Market Oversight issued a letter granting no-action relief to permit the Brazilian Derivatives Exchange, BM&F Bovespa S.A. – Bolsa de Valores, Mercadorias e Futuros (BM&F), to make its electronic tradi...](https://www.frixlaw.com/law-library/statutes/CFTC_L08_18.md)
- [CFTC Letter No. 08-19 Thailand Futures Exchange Pcls Request for No-Action Relief in Connection with the Offer and Sale in the United States of its Futures Contract Based on the SET50 Index Futures Contract.](https://www.frixlaw.com/law-library/statutes/CFTC_L08_19.md)
- [CFTC Letter No. 08-21 The Division of Market Oversight issued a no-action letter to BNP Paribas confirming that the Division will not recommend that the Commission initiate enforcement action against BNP Paribas or Fortis Bank S.A./N.V., o...](https://www.frixlaw.com/law-library/statutes/CFTC_L08_21.md)
- [CFTC Letter No. 09-02 The Division of Clearing and Intermediary Oversight provided no-action relief to the general partner of a commodity pool from registering as a CPO under Section 4m(1) of the Commodity Exchange Act, and allowed an affi...](https://www.frixlaw.com/law-library/statutes/CFTC_L09_02.md)
- [CFTC Letter No. 09-06 The CPO of a commodity pool requested that DCIO agree to accept the Annual Report for the period from January 1, 2008 through October 31, 2008 as the Pool’s final annual report despite the fact that the Pool had not f...](https://www.frixlaw.com/law-library/statutes/CFTC_L09_06.md)
- [CFTC Letter No. 09-07 The CPO of a commodity pool with a de minimus amount of its assets embroiled in a bankruptcy requested relief from the ongoing reporting requirements under Part 4. The CPO filed an Annual Report for the Pool for the 2...](https://www.frixlaw.com/law-library/statutes/CFTC_L09_07.md)
- [CFTC Letter No. 09-11 The CPO of two commodity pools requested relief to use IFRS in lieu of US GAAP. DCIO granted relief pursuant to Commission Regulations 140.93 and 4.12(a).](https://www.frixlaw.com/law-library/statutes/CFTC_L09_11.md)
- [CFTC Letter No. 09-13 The CPO of commodity pool requested relief to use IFRS in lieu of US GAAP. DCIO granted relief pursuant to Commission Regulations 140.93 and 4.12(a).](https://www.frixlaw.com/law-library/statutes/CFTC_L09_13.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/CFTC_L25_12. Check the current official text before relying on it. Not legal advice.