CFTC Proposed Rule: Amendments to Swap Data Recordkeeping and Reporting Requirements for Cleared Swaps

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Dodd-Frank Timeline, Swap Data Recordkeeping and Reporting Amendments
Proposed Rule Final Rule Approved Compliance Date
August 31, 2015 June 14, 2016 December 27, 2016

On August 19, 2015, the Commodity Futures Trading Commission (CFTC) approved a list of proposed amendments to Part 45 of the Commission's regulations, which cover the manner and contents of reporting to swap data repositories (SDRs). The proposed rulemaking is intended to clarify a number of procedures in Part 45, including which counterparty to a swap transaction is responsible for reporting. The rules also aim to improve data quality by reducing the likelihood of double counting of notional exposures..<ref>CFTC Issues Proposed Amendments to Swap Data Recordkeeping and Reporting Requirements for Cleared Swaps. CFTC. Retrieved on September 8, 2015.</ref>

The proposed rulemaking entered the Federal Register on August 31, 2015 and the deadline for public comment is October 30, 2015. Comments may be filed and viewed on the CFTC web site HERE.


Among the mandates of the Dodd-Frank Act are requirements that regulatory agencies such as the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) create a framework for the transmission, submission, and storage of swap data. As of June 2012, the CFTC had finalized four swap data rulemakings - Registration and Regulation of Swap Data Repositories, Swap Data Recordkeeping and Reporting Requirements and Real-Time Public Reporting of Swap Transaction Data, and Swap Data Recordkeeping and Reporting Requirements: Pre-Enactment and Transition Swaps.

Per its mandate from the Dodd-Frank Act, the CFTC added a new section to its rules, Part 45, which, among other things, established standards for swap data recordkeeping and reporting for all "swap entities," including:

On December 20, 2011, the CFTC issued its final rules governing Part 45.

Subsequent to the initial set of rules, which were largely based on the mechanisms for the trading and execution of uncleared swaps, the commission has had an opportunity to consult with market participants and observe how the Part 45 regulations function with respect to cleared swaps. Specifically, the CFTC has observed how Part 45 interacts with Part 39, which contains provisions applicable to derivatives clearing organizations.

The amendments proposed in this rule address these observations and interactions.

Summary of the Proposed Rules[edit]

Newly defined terms:

  • "Original Swap" - a swap that has been accepted for clearing by a DCO. This is commonly referred to, in cleared swaps, as an "alpha swap."
  • "clearing swap" - swaps to which a DCO is a counterparty and that replace an original swap (swaps commonly known as "beta" swaps and "gamma" swaps). A clearing swap can also be a swap to which the DCO is a counterparty, even if such swap does not replace an original swap.

Data reporting and SDR choice

  • DCOs are established as the reporting counterparty for "clearing swaps" and must report creation data "as soon as technologically practicable"
  • for swaps executed on a designated contract market (DCM) or swap execution facility (SEF), the DCM/SEF would choose the SDR to which a swap is reported. For all other swaps, such as off-facility or clearing swaps, the reporting counterparty would have the reporting obligation.

Continuation data

  • A DCO will be required to report continuation data to the SDR to which an "original swap" was reported. The data must include a legal entity identifier {LEI) for the original swap and a unique swap identifier (USI) for the clearing swaps that replaced the original swap.
  • Since the DCO will be the reporting party, an existing requirement that a swap dealer or major swap participant (SD/MSP report daily valuation data will be removed.
  • All creation and continuation data will be required to be reported to a single SDR, which can trace the data back to the original swap.

Related Documents: Fact Sheet and Rule Proposal as it Appeared in the Federal Register[edit]



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