Swap dealers can skip some compliance rules for cleared trades

The US derivatives regulator has loosened some business conduct and documentation rules for swap dealers. This means fewer compliance steps for trades that are immediately cleared or handled by a prime broker.

For years, some parts of the derivatives market operated under temporary exemptions from compliance rules. These exemptions were granted through 'no-action letters,' which meant the regulator wouldn't act against firms for not following the letter of the law. Now, the regulator has made these exemptions permanent for specific types of trades. This reduces the regulatory burden for certain common transactions, making them faster and cheaper to execute.