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On 13th September 2023, the Commodity Futures Trading Commission (CFTC) issued the extension of No-Action Relief to Taiwan Futures Exchange (TAIFEX) for its swaps central clearing services. This extension allows U.S. financial institutions can continue to utilize TAIFEX’s OTC derivatives clearing services. The extended period for the relief will be in effect until March 15th, 2024, or until CFTC grants TAIFEX an exemption from registration as a Derivatives Clearing Organization (Exempt DCO), whichever occurs earlier.
TAIFEX has submitted the application to CFTC for Exempt DCO, and CFTC is currently in the process of reviewing TAIFEX's Exempt DCO petition. TAIFEX remains committed to pursuing the exemption and is actively working towards achieving Exempt DCO status.
Since the launch of the OTC central clearing business on July 25th last year, TAIFEX has achieved remarkable milestones. TAIFEX not only has reached a cleared volume of NTD$285 billion in TWD IRS, but also has garnered recognition from international financial regulatory authorities. On September 15th of the same year, TAIFEX secured No-Action Relief from CFTC, and on December 31st, it received recognition from the European Securities and Markets Authority (ESMA) as a Third-Country Central Counterparty (TC-CCP). These milestones hold significant importance for the development of the OTC derivatives market in Taiwan.
Furthermore, TAIFEX has been proactively seeking qualifications as a Qualified Central Counterparty (QCCP) in other countries, including the United Kingdom, Japan, and Canada. This proactive approach aims to increase foreign financial institutions’ confidence in Taiwan's markets and enhance their efficiency of capital utilization, ultimately contributing to the internationalization and competitiveness of Taiwan's financial industry.
