CFTC Final Rule: Swap Data Recordkeeping and Reporting Requirements: Pre-Enactment and Transition Swaps
|FINAL RULE: Approved on May 18, 2012; entered into Federal Register June 12, 2012.|
|Final Rule Issue||Effective Date||Compliance Date|
|June 12, 2012||August 13, 2012||April 10, 2013|
On May 18, 2012, the CFTC approved a final rulemaking on swaps executed prior to passage of the Dodd-Frank Act ("pre-enactment swaps"), and swaps executed prior to passage of the Dodd-Frank Act, and transition swaps, those entered into between the law’s enactment date and the applicable compliance date for swap data recordkeeping and reporting ("transition swaps"). The goal of the final rule for these swaps, collectively called historical swaps, is to specify what records must be kept and what data must be reported. The rule is also designed to ensure that historical swap data is available to regulators through swap data repositories (SDRs).
On April 12, 2011, the CFTC approved a proposed rule regarding pre-enactment and transition swap data reporting and recordkeeping requirements. The proposed rule outlined certain types of data from existing swap agreements that must be retained by swap entities. When final rules are issued, some or all of this data on existing swaps may be required to be submitted to either to the commission, or to a swap data repository.
Summary of the Rule
For swaps in existence on or after April 25, 2011, counterparties are required to keep records of specified, minimum primary economic terms for a swap of the asset class in question. Swap dealers and major swap participants (SD/MSPs) must keep the required records in electronic form (unless they were originally created and are exclusively maintained in paper form), while non-SD/MSP counterparties are permitted to keep them in either electronic or paper form. 
In addition, a counterparty to an historical swap must keep a confirmation, master agreement or credit support agreement concerning the historical swap in its possession on or after April 25, 2011. For historical swaps that expired prior to April 25, 2011, counterparties are required to keep the records they have, in any form elected by the counterparty. The required records must be retained throughout the existence of a historical swap and for five years following its final termination or expiration.
The reporting counterparty must also report its own legal entity identifier, the internal identifier it uses to identify the non-reporting counterparty, and the internal transaction identifier it uses to identify the swap. For historical swaps already reported to an existing repository prior to the applicable compliance date, duplicate reporting of information already reported is not required.
Counterparties required to report data concerning historical swaps may contract with third-party service providers to facilitate reporting. However, such counterparties remain responsible for reporting as required by the final rule.
The final rulemaking entered the Federal Register on June 12, 2012. The effective date of the regulation is August 13, 2012.
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:
- October 12, 2012 swap dealers and major swap participants, for interest rate and credit default swaps, as defined by the CFTC Proposed Determination: Clearing Requirement for Credit Default Swaps and Interest Rate Swaps
- January 10, 2013 swap dealers and major swap participants, for all other swaps
- April 10, 2013 for all swaps, for end-users.
Related Document: Federal Register Entry
- Open Meeting on Thirteenth Series of Proposed Rules under the Dodd-Frank Act. CFTC. Retrieved on April 15, 2011.
- CFTC Approves Final Rule on Swap Data Recordkeeping and Reporting Requirements for Pre-Dodd-Frank and Transition Swaps. CFTC. Retrieved on May 21, 2012.