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CICIs to Substitute for Legal Entity Identifiers on Interim Basis
Practical Law Legal Update 9-521-2417 (Approx. 3 pages)
CICIs to Substitute for Legal Entity Identifiers on Interim Basis
by PLC Finance
| Published on 11 Sep 2012 • USA (National/Federal) |
The CFTC issued an order designating DTCC-SWIFT as the provider of CFTC Interim Compliant Identifiers (CICIs) until the CFTC can establish a global legal entity identifier (LEI) system. CICIs will be used to comply with the CFTC's final swap data reporting and recordkeeping regulations under Title VII of the Dodd-Frank Act.
On September 4, 2012, a CFTC order was published in the Federal Register designating DTCC-SWIFT as the provider of CFTC Interim Compliant Identifiers (CICIs), which will be used in swap data reporting until a global legal entity identifier (LEI) system can be established. CICIs will be used by all CFTC-registered entities and swap counterparties to comply with the CFTC's final swap data reporting and recordkeeping regulations under Title VII of the Dodd-Frank Act. These regulations require that a universal system of LEI tags be established to identify parties to swap transactions. The CICIs will transition into the global LEI system once one is established, at which time these identifiers will be referred to as LEIs.
In March 2012, the CFTC issued a press release requesting submissions from industry participants who wished to be considered for designation by the CFTC as the provider of legal identifiers. The release set out the process for determining the provider. As a result of a determination and designation process, the CFTC found that DTCC-SWIFT's identifier was the only identifier that satisfied all requirements of the CFTC's swap data reporting rules and that could be provided to market participants before applicable compliance dates went into effect.
The CFTC's designation of DTCC-SWIFT is made for a term of two years and is conditioned on:
- Modification of the DTCC-SWIFT website and other facilities and documents used to provide CICIs.
- DTCC-SWIFT's continued compliance with all of the CFTC's LEI requirements and any related requirements in the order or in the requirements document provided to DTCC-SWIFT during the determination and designation process.
- Requirements that, subject to applicable confidentiality laws and other applicable laws:
- DTCC-SWIFT must make public all CICI identifiers and associated reference data, operations and identity-validation processes; and
- following establishment of the global LEI system or following designation by the CFTC of a successor CICI utility, DTCC-SWIFT must (free of charge) pass to any successor CICI utility or to the global LEI system, as applicable, all CICI identifiers, associated reference data and CICI intellectual property rights.
The CFTC is participating in an international process coordinated by the Financial Stability Board (FSB) to establish governance principles and reference data requirements for a global LEI and implement a global LEI system. If a global LEI system is not in place by the end of this two-year term, the CFTC may consider the feasibility of having multiple CICI providers and may consider submissions from DTCC-SWIFT and other parties seeking to become CICI providers.
Parties may apply for a CICI through a portal operated by DTCC-SWIFT.
To learn more about swap data reporting requirements under Dodd-Frank, see Practice Note, Summary of the Dodd-Frank Act: Swaps and Derivatives: Swap Data Reporting Requirements.