On 13 March 2025, the United States Commodity Futures Trading Commission (US CFTC) published CFTC Letter No. 25-05, officially announcing the withdrawal of CFTC Letter No. 21-19: Staff Advisory on Swap Execution Facility Registration Requirement (SEF Registration Advisory). This decision, issued by the Division of Market Oversight (DMO) of the US CFTC, takes immediate effect and withdraws the previously issued guidance regarding swap execution facility (SEF) registration.
The US CFTC’s SEF Registration Advisory was originally issued on 29 September 2021 to remind entities of their obligations under the United States Commodity Exchange Act (CEA) and US CFTC regulations concerning swap execution facility (SEF) registration. The advisory clarified scenarios where certain swaps market participants might be required to register as SEFs based on their business models and trading functions.
Division of Market Oversight of the US CFTC has now determined that the SEF Registration Advisory created regulatory uncertainty regarding which entities must register as SEFs. This uncertainty affected market participants engaged in activities including, one-to-many or bilateral swap trading and execution, trading swaps not subject to the US CEA’s trade execution requirement under Section 2(h)(8), non-electronic swap execution methods and entities registered with the US CFTC in other capacities (e.g., commodity trading advisors (CTAs) or introducing brokers). Recognising these concerns, the US CFTC has opted to withdraw the advisory in its entirety, with immediate effect.
With the withdrawal of CFTC Letter No. 21-19, market participants will no longer be bound by the advisory’s interpretations regarding SEF registration. However, swap market entities must still comply with existing SEF registration requirements under the US CEA and US CFTC regulations. The DMO has reiterated that this withdrawal does not change underlying registration obligations but eliminates previous uncertainty regarding specific business models and trading arrangements.
The withdrawal of the SEF Registration Advisory became effective on 13 March 2025, the date of issuance of CFTC Letter No. 25-05. Market participants seeking clarification on SEF registration can contact US CFTC officials.
(Source: https://www.cftc.gov/PressRoom/PressReleases/9055-25)
