Further Limited Swap Data Reporting Relief for Swap Dealers Issued by CFTC | Practical Law

Further Limited Swap Data Reporting Relief for Swap Dealers Issued by CFTC | Practical Law

The CFTC's Division of Market Oversight granted limited no-action relief to swap dealers from certain swap data reporting obligations relating to interest rate and credit swaps (referred to as Compliance Date 1 Swaps) for which data reporting requirements otherwise became effective on December 31, 2012.

Further Limited Swap Data Reporting Relief for Swap Dealers Issued by CFTC

Practical Law Legal Update 8-523-3873 (Approx. 3 pages)

Further Limited Swap Data Reporting Relief for Swap Dealers Issued by CFTC

by PLC Finance
Published on 03 Jan 2013 • USA (National/Federal)
The CFTC's Division of Market Oversight granted limited no-action relief to swap dealers from certain swap data reporting obligations relating to interest rate and credit swaps (referred to as Compliance Date 1 Swaps) for which data reporting requirements otherwise became effective on December 31, 2012.
On December 21, 2012, the CFTC's Division of Market Oversight (DMO) issued No-action Letter 12-66 granting limited temporary relief to swap dealers (SDs) from certain obligations under Dodd-Frank swap data reporting rules relating to interest rate and credit swaps (Compliance Date 1 Swaps) for which data reporting compliance otherwise became effective on December 31, 2012. The relief, which expires on April 30, 2013, was granted by the CFTC due to a number of technological issues highlighted in a letter to the DMO from the Futures Industry Association (FIA) and SIFMA, among others.
The no-action letter provides that DMO will not recommend an enforcement action against an SD with respect to the following:
  • A delay in reporting data under the final real-time swap data reporting rules (Part 43), "SDR" rules (Part 45) and historical swap data reporting rules (Part 46) for Compliance Date 1 Swaps executed by branches in emerging market jurisdictions (defined as any country other than the US, members of the European Union, Switzerland, Canada, Japan, Hong Kong, Singapore and Australia).
  • A delay in reporting aggregate pricing data under the final real-time swap data reporting rules (Part 43) and SDR rules (Part 45) for exotic/multi-leg Compliance Date 1 Swap transactions.
  • A delay in linking the report made under the final SDR rules (Part 45) for post-trade allocations, compressions, or novations to the unique swap identifier (USI) of the previously reported initial Compliance Date 1 Swap.
  • Withholding or incorrect reporting under the final real-time swap data reporting rules (Part 43) and SDR rules (Part 45) of certain Compliance Date 1 Swap "life cycle" events, including terminations, exercises, partial terminations, partial exercises and credit events. These events are often recorded by the SD's internal systems as a new trades.
To avail itself of this relief, an SD must meet specific criteria and comply with certain conditions detailed in the no-action letter. The DMO will not recommend enforcement action against an SD for failure to fulfill these reporting obligations until the earlier of:
  • The resolution of the technological issues preventing timely compliance, at which time the SD must begin reporting as soon as technologically practicable.
  • 12:01 a.m. EDT on April 30, 2013.
For more on swap data reporting requirements, see: