Moody’s Releases Comment on CFTC No-Action Relief

On Tuesday, December 12th, Moody's Investor Service released a piece (subscription required) outlining their analysis of the credit impact on SPV swaps in the wake of the October 27th no-action relief from the Commodity Futures Trading Commission (CFTC). The CFTC provided no-action relief, subject to specified conditions, to registered swap dealers from compliance with the variation margin requirements of CFTC regulation 23.153 when amending or novating swaps in existence prior to March 1, 2017 with issuers that are special purpose vehicles (legacy SPV swaps).

The comment explains that "the CFTC's no-action position improves the effectiveness of transfer triggers in certain structured finance transactions", and for this reason Moody's view is that the no-action "is credit positive" for legacy SPV transactions.

The CFTC's no-action relief follows a lengthy advocacy campaign by SFIG and its members spanning more than three years and including more than 20 meetings with regulators and lawmakers. During these meetings and in several comment letters and no-action relief requests, we shared the importance of relief from bilateral margin posting requirements for swaps entered into with legacy SPVs. We highlighted, in particular, our concerns regarding market impact and downgrade risk for legacy deals if permanent relief from margin posting requirements was not granted. If you would like to join SFIG's Derivatives Task Force, please contact

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