Securities Regulation Daily Wrap Up, SWAPS—CFTC proposes amendments to clearing requirements for swaps in Mexican and Canadian currency, (May 11, 2026)

By Rebecca E. Hoffman, J.D.

This change aims to help the regulatory regime catch up with what is already happening in practice.

The CFTC is proposing to amend Regulation 50.4(a), changing the requirement to submit interest rate swaps for clearing. Under the proposed change, swaps referencing the Canadian Dollar Offered Rate (CDOR) and those referencing the Interbank Equilibrium Interest Rate (TIIE) would be removed from the requirement, and Mexican peso (MXN) overnight index swaps referencing the Overnight TIIE Funding Rate (F TIIE) would be added. The proposal would also expand the maturity range of Canadian dollar (CAD)-denominated interest rate swaps referencing the Canadian Overnight Repo Rate Average (CORRA) up to 30 years—the current range only goes up to two years.

The Commission explained that the proposal formalizes trading and clearing patterns already established following global benchmark reform. According to the notice, liquidity and clearing activity have largely migrated away from CDOR and TIIE based swaps and into CORRA and F TIIE overnight index swaps, many of which are already being cleared voluntarily.

Under the Dodd-Frank Act, swaps must be cleared through a registered or exempt derivatives clearing organization unless an exemption applies, and several factors are considered in determining whether clearing is required, such as “the existence of significant outstanding notional exposures, trading liquidity, and adequate pricing data,” the notice said. The CFTC has made a few clearing requirement determinations in recent years, and the third such determination, in 2022, was undertaken to bring requirements in line with the global transition from interbank offered rates (IBORs) to overnight, nearly risk-free reference rates (RFRs).

Since then, CAD CDOR ceased publication, and the Mexican TIIE was being phased out. The proposed amendments align with these interest rate benchmark transitions. The CFTC is seeking comment in particular as to whether the requirement for Mexican-peso-denominated swaps should include those with maturities of more than 21 years. The comment period extends 30 days beyond this notice’s publication in the Federal Register.

RegulatoryActivity: CFTCNews ClearanceSettlement CommodityFutures Derivatives DoddFrankAct Enforcement ExchangesMarketRegulation Swaps