Alert December 04, 2012

CFTC Issues No-Action Relief for Bespoke or Complex Swaps From Certain Swap Data Reporting Requirements

The CFTC’s Division of Market Oversight (the “Division”) issued no-action relief from certain reporting rules regarding “bespoke or complex” swaps, which it defined as swaps that are (a) not listed for trading on a designated contract market; (b) not available to be traded on a swap execution facility; (c) not eligible to be cleared by a derivatives clearing organization; (d) not eligible to be confirmed through an electronic matching confirmation system; and (e) not represented in Financial products Markup Language (“FpML”).  The relief pertains to certain items required to be reported under the CFTC’s real-time public reporting rules (embodied in Part 43 of the CFTC’s regulations) and its swap data recordkeeping and swap data repository reporting requirements (embodied in Part 45 of the CFTC’s regulations).  As described in the no-action relief, the International Swaps and Derivatives Association has explained that FpML does not currently support bespoke or complex products for all fields required in Parts 43 and 45.  Accordingly, the Division has stated that it will not commence an enforcement action against a reporting party for failure to report the information required but not supported by FpML under both Parts 43 and 45, in each case until the earlier of such time that the relevant data elements can be electronically represented in FpML or June 30, 2013.