Large Trader Reporting Regulation
|FINAL RULES: CFTC Final Rule: Large Trader Reporting Approved at CFTC Open Meeting, July 7, 2011 SEC Final Rule: Large Trader Reporting Approved at SEC Open Meeting, July 26, 2011|
|Effective Date||Compliance Date, "Sponsored Access"||Compliance Date, Other Bkr-Dlrs|
|October 3, 2011||November 30, 2012||May 1, 2013|
|Final Rule||Effective Date||No-action Relief Deadline|
|July 22, 2011||September 20, 2011||June 30, 2013|
In response to recent market developments, such as the transformation of trading systems from manual to electronic platforms, and other changes in market structure related to the Dodd-Frank Act, regulatory authorities such as the SEC and CFTC. In July 2011, the two regulators issued final rulemakings on reporting systems for large traders.
In order to assist traders in the filing of position reports, the commission issued its guidebook for part 20 reports (large trader reporting) on December 7, 2011
Since the large trader reporting rules were finalized prior to the finalization of final rules on swap entity and product definitions, the CFTC opted to provide temporary relief for reportable swap dealers.
- On November 18, 2011, the commission announced temporary relief for large traders until March 20, 2012 for reportable traders who "make a good faith effort" to comply with the new rules. Te relief is meant to give an opportunity to transition to the CFTC's new XML-based large trader reporting system.
- On March 20, 2012, in light of concerns from market participants that they would not be fully compliant by the deadline, the CFTC Division of Market Oversight ("DMO") issued a letter establishing temporary and conditional no-action relief for less than fully compliant reporting under Part 20 until July 2, 2012. This no-action relief is subject to the same conditions as the November 18, 2011 safe harbor relief.
- On July 18, 2012, the CFTC issued temporary no-action relief for reporting by non-clearing member swap dealers under the CFTC’s large trader reporting requirements for physical commodity swaps and swaptions, in order to give non-clearing swap dealers time to transition into full compliance. The no-action relief is set to expire 60 days following the registration deadline for swap dealers. Additionally, the no-action letter will allow swap dealers under Part 20.10(e) an additional six months to comply. To be considered a 20.10(e) swap dealer, the person may not be an affiliate of a bank holding company and:
- Is not registered with the Commission as a futures commission merchant and is not an affiliate of a futures commission merchant;
- Is not registered with the Securities and Exchange Commission as a broker or dealer and is not an affiliate of a broker or dealer; and
- Is not supervised by any Federal prudential regulator. 
For more information, visit the CFTC Guidebook for Part 20 Reports.
SEC Final Rule: Large Trader Reporting, July 26, 2011
At its July 26, 2011 open meeting, the SEC issued its final rule regarding large trader reporting requirements under the Dodd-Frank Act. According to the rule, large traders will be assigned a unique identification number by the SEC and must provide this number to their broker-dealers. The large traders are required to identify themselves to the SEC and the broker-dealers are required to keep transaction records for each large trader, reporting this data to the Commission if necessary.
Note: On April 20, 2012, the SEC temporarily exempted broker-dealers from compliance by April 30, 2012, as was previously mandated. In order to provide them with additional time to comply with the recordkeeping, reporting, and monitoring requirements of the rule, the commission has extended the compliance date for registered broker-dealers to May 1, 2013, except for certain broker-dealers that are either large traders or have large trader customers that are either broker-dealers,or that trade through a “sponsored access” arrangement, for which the Commission is extending the compliance date to November 30, 2012. The extension of the compliance date will allow broker-dealers additional time to "develop, test, and implement enhancements to their recordkeeping and reporting systems".
CFTC Final Rule: Large Trader Reporting, July 7, 2011
On July 7, 2011, the CFTC held an open meeting to discuss five final rulemakings under the Dodd-Frank Act. Among the rules approved at the meeting was a final rule regarding large trader reporting for physical commodity swaps.
Derivatives clearing organizations and clearing members were required to begin reporting on cleared swaps on November 21, 2011, and will be required to begin reporting on uncleared swaps on January 20, 2012. Additionally, the CFTC requires fully compliant month-end open interest reports to be collected beginning in September 2011 through February 2012 and submitted to the Commission by March 20, 2012.
The Part 20 Reports Guidebook is intended to assist traders with reportable positions to be in compliance with the regulation. Also included is a "data dictionary" for mapping data elements to a record layout, and templates for the reports and 102S filings.
- CFTC’s Division of Market Oversight Issues Letter to Market Participants Requiring Compliance with New Large Trader Reporting System for Physical Commodity Swaps and Swaptions. CFTC. Retrieved on November 22, 2011.
- Title 17: Commodity and Securities Exchanges. Code of Federal Regulations. Retrieved on July 18, 2012.
- SEC Adopts Large Trader Reporting Regime. SEC. Retrieved on July 26, 2011.
- Order Temporarily Exempting Broker-Dealers from the Recordkeeping, Reporting, and Monitoring Requirements. SEC. Retrieved on April 23, 2012.
- Open Meeting on Five Final Rule Proposals under the Dodd-Frank Act. CFTC. Retrieved on July 7, 2011.