CFTC Final Rule: Reporting, Recordkeeping, and Daily Trading Records Requirements for Swap Dealers and Major Swap Participants

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Gavel.png FINAL RULE: The final rule on SD/MSP reporting, recordkeeping and daily trading records was approved at CFTC Open Meeting, February 23, 2012.
Dodd-Frank Timeline, Reporting, Recordkeeping, and Daily Trading Records Requirements for Swap Dealers and Major Swap Participants
Final Rule Issue Effective Date No-action Relief, Valuation
April 3, 2012 June 4, 2012 June 30, 2014

At its February 23, 2012 open meeting, the CFTC approved its first set of final internal business conduct standards for swap dealers and major swap participants (SD/MSPs). Among the provisions are rules that establish and govern certain recordkeeping and reporting requirements of SD/MSPs. Though the rule became effective June 4, 2012, the commission issued no-action relief until June 30, 2014 for reporting of valuation data. for more information, click HERE.

Background

Section 731 of the Dodd-Frank Act amended the Commodity Exchange Act by adding reporting, recordkeeping, and daily trading records requirements for swap dealers and major swap participants. Such information is to be made available to the commission and prudential regulators. A proposed rule was approved at an open meeting December 1, 2010.

Final Rule Summary

Among the final recordkeeping requirements, SD/MSPs must maintain:

  • Complete transaction and position information for all swap activities, including all documents on which trade information is originally recorded, identifiable and searchable by transaction and counterparty;
  • Minutes from meetings of the entity’s governing body;
  • Organizational charts;
  • Audit documentation;
  • Certain financial records, records of complaints against personnel, and marketing materials; and *Records of information required to be submitted to a swap data repository and reported on a real-time public basis.

Additionally, SD/MSPs must maintain daily trading records such as:

  • Pre-execution trade data: records of all oral and written communications that lead to the execution of a swap; enough information to conduct a comprehensive and accurate trade reconstruction for each swap.
  • Execution trade data: all terms of each executed swap and the date and time, to the nearest minute, that each swap was executed.
  • Post-execution data: records of all confirmations, reconciliations, and margining of swapsans well as information related to cash or forward transactions used to hedge, mitigate the risk of, or offset any swap held by the SD/MSP.

Compliance Dates

The compliance dates were set when the swap entity and product definitions final rules entered the Federal Register on August 13, 2012. They are as follows:

Note: On October 26, 2012, the CFTC issued no-action relief until March 31, 2013.

Related Documents: Fact Sheet, Q&A, and Final Rule as it Appeared in the Federal Register

Note: The documents embedded below include the entire set of internal business conduct standards rules approved at the CFTC Open Meeting, February 23, 2012.

References

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