Alert April 16, 2013

CFTC Extends Reporting Requirement Compliance Date for End-Users

The CFTC’s Division of Market Oversight (the “Division”) issued a no-action letter that extends the date by which a swap counterparty that is not a swap dealer or a major swap participant (a “Non-SD/MSP”) must be in compliance with certain of its swap data reporting obligations under the CFTC’s recordkeeping and reporting rules.  In the absence of the relief, Non-SD/MSPs would have been required to comply with the rules by April 10, 2013.  The relief applies differently depending on whether the Non-SD/MSP in question is a “financial entity” as defined in the Commodity Exchange Act. 

Financial entities.  The letter states that the Division will not recommend that the CFTC take enforcement action against a financial entity for failing to report swap transaction data with respect to equity swaps, foreign exchange swaps, and “other” commodity swaps under the CFTC’s real-time public reporting rules (Part 43 of the CFTC’s regulations) and the CFTC’s recordkeeping and swap data repository reporting requirements (Part 45 of the CFTC’s regulations) until May 29, 2013.  No relief was provided from these regulations to financial entities with respect to interest rate swaps and credit swaps.  As a condition of the relief, a financial entity relying on the relief must, by June 29, 2013, report to a swap data repository all swap transaction data for the period from April 10, 2013 to May 29, 2013 that it would have had to report under the Part 45 rules in the absence of the relief.  In addition, financial entities were given until September 30, 2013, to report historical swaps data for all asset classes under the CFTC’s Part 46 rules.

Non-financial entities.  Non-financial entities received more extensive relief.  The letter states that the Division will not recommend that the CFTC take enforcement action against a non-financial entity for failure to report swap transaction data pursuant to either Part 43 or Part 45 of the CFTC’s regulations until July 1, 2013 (for interest rate swaps and credit swaps) and August 19, 2013 (for equity swaps, foreign exchange swaps, and other commodity swaps).  With respect to interest rate and credit swaps, non-financial entities availing themselves of the relief must, by August 1, 2013, report to a swap data repository all swap transaction data for the period from April 10, 2013 to July 1, 2013, that it would have been required to report pursuant to Part 45 in the absence of the relief.  With respect to equity, foreign exchange, and other commodity swaps, the non-financial entity must report by September 19, 2013 all swap transaction data for the period from April 10, 2013 to August 19, 2013 that it would have been required to report pursuant to Part 45 in the absence of the relief.  Non-financial entities were given until October 31, 2013 to report historical swaps data for all asset classes under the CFTC’s Part 46 rules.

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The letter explicitly states that other provisions of the CFTC rules, including the recordkeeping obligations of Non-SD/MSPs, are not affected by the relief.