Accordingly, the Commission notes that these DCOs would be able to control the risk associated with clearing the OIS RFR, which this conclusion is to be eliminated. In addition, the central clearing of the OIS RFR, which is added as part of this regulation, serves to mitigate counterparty credit risk and thus potentially reduce systemic risk. After considering the observations and the likely impact on the mitigation of systemic risk, the Commission shall adopt a decision to include those RFR SIBs in the clearing obligation. LIBOR is a benchmark interest rate bond that should measure the average interest rate at which a bank can receive unsecured funds in the London interbank market for a given maturity and currency. It was one of the most widely referenced benchmark rates in the world and served as a reference rate for various swaps and other financial products. Over the years, LIBOR has been calculated based on contributions from panels of contributing banks and published every London business day. Immediately prior to January 1, 2022, LIBOR was released for five currencies (USD, GBP, EUR, CHF and JPY) and seven maturities (overnight or spot-next depending on the currency, one week, one month, two months, three months, six months and 12 months), representing 35 individual LIBOR rates.  As of this year, almost all of these LIBOR rates are no longer published or representative of the underlying market they are supposed to measure. 1 See press release “CFTC approves two proposed rules at January 30 public meeting,” CFTC (January 30, 2020). An SEF is a trading system or platform on which counterparties can trade swaps that are similar but not identical to an exchange. See 7 U.S.C. § 1a(50) (definition of “swap execution mechanism”); 17 C.F.R. § 1.3 (ibid.).
Government investigations into LIBOR nearly a decade ago, as well as the decline in the volume of interbank lending transactions that LIBOR was supposed to measure, have raised concerns about the integrity and reliability of LIBOR and other IBORs.  Although LIBOR has been the subject of a number of important reform efforts, regulators and global standard-setting bodies did not see these reforms as a long-term solution. On July 27, 2017, Andrew Bailey, then chief executive of the UK`s Financial Conduct Authority (FCA), LIBOR`s main regulator, announced that the FCA would not use its authority to force banks in the LIBOR panel to contribute to the benchmark after 2021.  On March 5, 2021, the FCA announced that LIBOR would be published on March 31, 2021 on March 31, 2021. December 2021 for the following reasons:  Accordingly, the Commission amends paragraph 36.1(b) to find that section 2(h)(8) of the Act does not apply to a swap transaction that qualifies for an exemption under section 2(h)(7) of the Act or to one or more of the exceptions or exemptions set out in Part 50 of Chapter I of the Act. Title 17 and for which the corresponding requirements are met. This change requires, as recommended by Citadel, that the exception or exemption for the swap clearing requirement “Start printed page 8997” be selected to qualify for this exception. In addition, as discussed above, the amendment also recognizes that there are certain exceptions to the swap netting requirement that do not have to be chosen. However, the Commission notes that, consistent with Citadel`s comment, this amendment would still require that all related requirements of the relevant swap clearing exception or exemption be met in order to qualify for this exemption. In 2013, the Council services published a letter on the non-retention of PTRR services.
 This letter explains that compression is an important tool to facilitate post-trade risk reduction. Previous committees have refused to codify this declaration of non-action, and this issue is beyond the scope of this regulation. The Commission expects that CME, LCH and Eurex will be able to comply with the core principles of COD and the applicable Commission rules following the adoption of this definition of clearing requirements. For the reasons set out below, the Commission has concluded that the ability of CME, LCH or Eurex to comply with the core principles of the DCAs and the applicable Commission rules is unlikely to be affected if an RFR SIO is subject to the required compensation.  At the time of preparation of the proposal, the Commission was currently examining a proposal to codify certain exemptions from the clearing obligation.  The proposed rule applied the Commission`s exemption under Article 4(c) to provide for an explicit exemption from the obligation to execute transactions for all future exemptions from the Part 50 clearing obligation or exemptions from the clearing obligation.  31. In May 2022, the Commission published an NPRM seeking public comments on how it should amend the clearing obligation for interest rate swaps to reflect the loss or loss of representativeness of IBORs used as benchmarks and market acceptance of swaps referring to RFRs. The NPRM was preceded by a RFI published by the Commission on November 23, 2021.  Both efforts sought input on all aspects of the swap clearing requirement that could impact the transition from IBOR to RFR, including listed requests for data and other information related to IBOR and RFR swaps.
11. 83 FR at 62036-62040. The proposed rule also included an exemption from execution of transactions for swap elements of global transactions, which includes both a swap, which is otherwise subject to the obligation to execute transactions, and a new issue of bonds (“new bond issue”). The Commission has also proposed an exemption from the execution obligation for swap elements of new bonds issued in a separate proposal to codify most of the facilities currently granted for global transactions. See Swap Execution Facility Requirements and Real-Time Reporting Requirements, 85 FR 9407 (19 February 2020). On 18 November 2020, the Commission adopted this exemption in a separate provision as Article 36.1(a) of its Regulation. See Swap Execution Facility Requirements, 85 FR 82313 (18 December 2020). The Paperwork Reduction Act of 1995 (“PRA”)  imposes certain requirements on federal authorities (including the Commission) with respect to the implementation or promotion of “information collection”  within the meaning of the PRA.
The objectives of the LES include minimizing red tape for the private sector, ensuring that any collection of information by a government organization is used as widely as possible, and minimizing duplicate information collections across government.  The ACLI stated that life insurers should be free to weigh the advantages and disadvantages of cleared and uncleared swaps and to choose a system that provides the greatest possible flexibility in the allocation of collateral, since the cleared swap framework and the rules on uncleared swap margins reduce risk.  The ACLI found that central clearing offers market participants many advantages over bilateral agreements, including greater security, transparency and customer protection. However, the ACLI found that mandatory clearing increases the concentration of risk among central counterparties and futures dealers (FCMs).  The ACLI also noted that the risk mitigation benefits of central clearing are reduced by the Commission`s rules requiring swap dealers to use their uncleared swaps with certain counterparties.  On December 6, 2021, ASIC published a consultation proposing changes to its interest rate swap clearing obligation. The consultation proposed (i) to withdraw the EUR-EONIA contracts from the OIS class and replace them with OIS for EUR-STR with a notice period of seven days to two years; (ii) remove JPY LIBOR contracts from the fixed-floating swap, base swap and FRA classes and replace them with JPY TONA OIS, with seven days to 30 years` notice; and (iii) the removal of GBP LIBOR contracts from the fixed-floating swap, basic swap and FRA classes and the extension of the notice period for OIS relating to GBP SONIA from seven days to 50 years.  9 See 17 C.F.R.