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OSTTRA receives US CFTC no-action relief for PTRR
02 July 2026 US
Image: DogoraSun/adobe.stock.com
OSTTRA, a global post-trade solutions provider, along with two industry peers, have secured a no-action letter from the US Commodity Futures Trading Commission for solutions related to post-trade risk reduction (PTRR).
The relief provided by the letter will allow US firms to more efficiently manage systemic risk and optimise capital.
The letter provides exemptions that concern trading, clearing, and reporting obligations.
These rules previously added complexity, which limited post-trade risk reduction services (PTRRS) to larger US firms where, for example, counterparty risk rebalancing required the use of more complex swaptions instead of vanilla interest rate swaps.
They also needed to report the non-price forming trades that are used to rebalance and reduce basis risk in portfolios.
The firm says greater regulatory clarity enables firms to more efficiently manage and administer non-price forming transactions for the purposes of post-trade risk reduction.
Additionally it will streamline operations for existing PTRRS users, improving the ease of conducting risk reduction on a more frequent basis.
The exemption enables smaller, regional banks to utilise PTTRS where previously it was operationally onerous.
PTRRS providers also received a trading venue exemption, allowing OSTTRA to digitally facilitate the bank-to-bank execution of rebalancing runs, improving the operational efficiency of each run cycle.
OSTTRA has already executed its first rebalancing run using the new digital protocol involving US and non-US clients.
Also, US firms rebalancing credit index risk will see efficiencies and benefit from the widened scope of the service in credit default swaps by allowing the on-the-run and the first-off-the-run indices to be executed off trading venue.
OSTTRA expects, the changes to provide more certainty during rebalancing and basis risk optimisation runs, allowing for greater and more efficient risk reduction for market participants.
The CFTC letter brings the US into regulatory alignment with the EU and UK, which already has exemptions for PTRRS for most of these obligations.
Kirston Winters, chief risk officer, OSTTRA, notes: “The greater regulatory clarity in the US for post-trade risk reduction services enables US firms to better manage their portfolios. This will not only improve outcomes for existing users but also enable wider market access to firms who previously were dissuaded by unnecessarily high barriers that complicated adoption.
“PTRRS play a critical role in helping derivative traders manage non-market risk. Global alignment on these exemptions is recognition that these services strengthen market stability and the existing rules were unnecessarily burdensome upon transactions resulting from PTRR.”
The relief provided by the letter will allow US firms to more efficiently manage systemic risk and optimise capital.
The letter provides exemptions that concern trading, clearing, and reporting obligations.
These rules previously added complexity, which limited post-trade risk reduction services (PTRRS) to larger US firms where, for example, counterparty risk rebalancing required the use of more complex swaptions instead of vanilla interest rate swaps.
They also needed to report the non-price forming trades that are used to rebalance and reduce basis risk in portfolios.
The firm says greater regulatory clarity enables firms to more efficiently manage and administer non-price forming transactions for the purposes of post-trade risk reduction.
Additionally it will streamline operations for existing PTRRS users, improving the ease of conducting risk reduction on a more frequent basis.
The exemption enables smaller, regional banks to utilise PTTRS where previously it was operationally onerous.
PTRRS providers also received a trading venue exemption, allowing OSTTRA to digitally facilitate the bank-to-bank execution of rebalancing runs, improving the operational efficiency of each run cycle.
OSTTRA has already executed its first rebalancing run using the new digital protocol involving US and non-US clients.
Also, US firms rebalancing credit index risk will see efficiencies and benefit from the widened scope of the service in credit default swaps by allowing the on-the-run and the first-off-the-run indices to be executed off trading venue.
OSTTRA expects, the changes to provide more certainty during rebalancing and basis risk optimisation runs, allowing for greater and more efficient risk reduction for market participants.
The CFTC letter brings the US into regulatory alignment with the EU and UK, which already has exemptions for PTRRS for most of these obligations.
Kirston Winters, chief risk officer, OSTTRA, notes: “The greater regulatory clarity in the US for post-trade risk reduction services enables US firms to better manage their portfolios. This will not only improve outcomes for existing users but also enable wider market access to firms who previously were dissuaded by unnecessarily high barriers that complicated adoption.
“PTRRS play a critical role in helping derivative traders manage non-market risk. Global alignment on these exemptions is recognition that these services strengthen market stability and the existing rules were unnecessarily burdensome upon transactions resulting from PTRR.”
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