U.S. COMMODITY FUTURES TRADING COMMISSION

Three Lafayette Centre

1155 21st Street, NW, Washington, DC 20581

Telephone: (202) 418-5260

Facsimile: (202) 418-5527

Division of

Market Oversight

CFTC Letter No. 15-30

No-Action

May 15, 2015

Division of Market Oversight

Richard Swift

Chief Executive Officer

Yieldbroker Pty Limited

Level 12, 130 Pitt Street

Sydney, NSW 2000, Australia

Re: Conditional Time-Limited No-Action Relief with Regard to Section 5h(a)(1) of 

the Commodity Exchange Act and Commission Regulation 37.3(a)(1)

Dear Mr. Swift:

On December 20, 2013, the Division of Market Oversight (“DMO” or “Division”) of the 

Commodity Futures Trading Commission (“CFTC” or “Commission”) issued CFTC No-Action 

Letter No. 13-76 (“December 2013 Letter”)1 granting time-limited conditional relief to 

Yieldbroker Pty Limited (“Yieldbroker”). Pursuant to the December 2013 Letter, DMO would 

not recommend to the Commission that it commence an enforcement action against Yieldbroker 

for violation of section 5h(a)(1) of the Commodity Exchange Act (the “Act”)2 or Commission 

Regulation 37.3(a)(1),3 or against any other market participant that uses or has other 

relationships with Yieldbroker, based on Yieldbroker’s failure to register as a SEF, until May 15, 

2014. On May 14, 2014, DMO issued No-Action Letter No. 14-70 extending the conditional noaction relief granted to Yieldbroker by the December 2013 Letter through August 15, 2014.4

 On 

August 11, 2014, DMO issued No-Action Letter No. 14-105 extending the same conditional 

relief to Yieldbroker through November 15, 2014.5

 

 1 See CFTC No-Action Letter No. 13-76 (December 20, 2013), available at

http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/13-76.pdf. 

2 7 U.S.C. 7b-3(a)(1). 

3 17 CFR 37.3(a)(1). 

4 See CFTC No-Action Letter No. 14-70 (May 14, 2014), available at

http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/14-70.pdf. 

5 See CFTC No-Action Letter No. 14-105 (August 11, 2014), available at

http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/14-105.pdf.
2

On September 15, 2014, DMO and the CFTC’s Division of Swap Dealer and 

Intermediary Oversight (“DSIO”) jointly issued CFTC No-Action Letter No. 14-117 (“Letter 14-

117”) providing conditional relief with respect to swaps trading on qualifying financial markets 

that are licensed in Australia and overseen by the Australian Securities & Investments 

Commission (“ASIC”) (“Australian Licensed Markets”).

6

 Letter 14-117 is an enabling no-action 

letter that requires an Australian Licensed Market to affirmatively undertake to DMO that it will 

comply with the conditions set out in the letter. As such, relief under Letter 14-117 would not be 

triggered until DMO reviews the applicant’s certification and issues a responsive relief letter.7 

On November 13, 2014, DMO issued No-Action Letter No. 14-139 (“Letter 14-139”) 

extending conditional relief to Yieldbroker through February 15, 2015.

8

 On February 12, 2015, 

DMO issued No-Action Letter No. 15-04 (“Letter 15-04”) extending conditional relief to 

Yieldbroker through May 15, 2015.9

 DMO issued Letters 14-139 and 15-04 to allow 

Yieldbroker additional time to work toward compliance with the conditions set out in Letter 14-

117, while Commission staff evaluated certain proposed modifications to Letter 14-117. 

On May 15, 2015, DMO and DSIO jointly issued CFTC No-Action Letter No. 15-29

(“Letter 15-29”), which supersedes Letter 14-117.10 The conditional relief provided in Letter 15-

29 generally tracks the conditional relief provided in Letter 14-117, but contains several notable 

clarifications and changes to the conditions for relief. Yieldbroker has confirmed with 

Commission staff that it intends to apply for relief under Letter 15-29 by October 15, 2015. 

DMO believes it is appropriate to extend conditional no-action relief to Yieldbroker with 

regard to Section 5h(a)(1) of the Commodity Exchange Act and Commission Regulation 

 6 See CFTC No-Action Letter No. 14-117 (September 15, 2014), available at

http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/14-117.pdf. No-Action Letter 14-117 

provides relief for:

• Qualifying Australian Licensed Markets from the SEF registration requirement; 

• Parties executing swap transactions on qualifying Australian Licensed Markets from the trade execution 

mandate; and 

• Swap dealers and major swap participants executing swap transactions on qualifying Australian Licensed 

Markets from certain business conduct requirements.

Such relief would expire upon the effective date of any exempt SEF rulemaking pursuant to CEA section 5h(g). 

7 DMO notes that No-Action Letter 14-117 was modeled after CFTC No-Action Letter No. 14-46, which provides 

similar relief to qualifying European multilateral trading facilities (“MTFs”). See No-Action Letter 14-46 (April 9, 

2014) (“Letter 14-46”), available at http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/14-

46.pdf. 

8 See CFTC No-Action Letter No. 14-139 (November 13, 2014), available at

http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/14-139.pdf. 

9 See CFTC No-Action Letter No. 15-04 (February 12, 2015), available at

http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/15-04.pdf.

10 See CFTC No-Action Letter No. 15-29 (May 15, 2015), available at -

http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/15-29.pdf. Similar to Letter 14-117, 

Letter 15-29 is an enabling no-action letter that requires an Australian Licensed Market to affirmatively undertake to 

DMO that it will comply with the conditions set out in the letter.
3

37.3(a)(1) until October 15, 2015, to allow Yieldbroker additional time to comply with the terms 

and conditions in Letter 15-29. 

The no-action relief provided by this letter shall remain contingent on Yieldbroker’s 

satisfaction of the six conditions listed in the December 2013 Letter throughout the relief 

period,11 and Yieldbroker may offer trading in New Zealand Dollar-denominated interest rate 

swaps on its platform during the relief period.

12 The Division continues to believe that 

predicating Yieldbroker’s relief upon satisfaction of these conditions will help foster pre- and 

post-trade transparency on, and impartial access to, Yieldbroker’s trading platform during the 

relief period. 

This letter, and the no-action position taken herein, represents the views of DMO only, 

and does not necessarily represent the positions or views of the Commission or of any other 

division or office of the Commission. The no-action positions announced herein do not excuse 

Yieldbroker from compliance with any other applicable requirements of the Act or the 

Commission’s regulations thereunder. As with all no-action letters, DMO retains the authority to 

condition further, modify, suspend, terminate or otherwise restrict the terms of the no-action 

relief provided herein, in its discretion. 

 11 No-action relief for Yieldbroker will continue to be predicated on Yieldbroker’s satisfaction of the following 

conditions specified in the December 2013 Letter: 

1. Yieldbroker will not offer trading on its platform in any product that is subject to the trade execution 

mandate, pursuant to Section 2(h)(8) of the Act, during the relief period. 

2. Yieldbroker will only offer trading in Australian dollar-denominated interest rate swaps on its platform 

during the relief period.

3. Yieldbroker will maintain its AML license and will remain an exchange in good standing with ASIC and 

other applicable regulators.

4. Yieldbroker must provide impartial access to its platform consistent with the requirements of 

Commission regulation 37.202(a) and with any Commission- or Commission staff-issued guidance and 

interpretations thereto. 

5. Yieldbroker must at all times maintain an “order book” that complies with Commission regulation 

37.3(a)(3). 

6. Yieldbroker must provide notice to its participants that each swap transaction executed on or pursuant to 

the rules of its platform during the period of relief provided herein is not occurring on a registered SEF and 

that the counterparties to such Off-facility swaps may have swap data reporting obligations pursuant to 

parts 43 and 45 of the Commission’s regulations. Additionally, Yieldbroker will undertake to monitor that 

any trade that is reportable under part 45 that is executed on its platform has been assigned a unique swap 

identifier (“USI”) and has therefore been reported to a provisionally-registered or registered swap data 

repository (“SDR”).

These six conditions are the only conditions upon which the relief provided to Yieldbroker by this letter is 

predicated. 

12 Thus, as a condition of this relief, Yieldbroker will only offer trading in Australian dollar-denominated or New 

Zealand dollar-denominated interest rate swaps on its platform during the relief period. 
4

If you have any questions concerning this correspondence, please contact David Van 

Wagner, Chief Counsel, Division of Market Oversight, at (202) 418-5481 or 

dvanwagner@cftc.gov, or David Pepper, Special Counsel, Division of Market Oversight, at 

(202) 418-5565 or dpepper@cftc.gov.

Sincerely,

Vincent McGonagle

Director, Division of Market Oversight