CFTC Further Delays Some Swap Data Recordkeeping Rules for SDs and MSPs | Practical Law

CFTC Further Delays Some Swap Data Recordkeeping Rules for SDs and MSPs | Practical Law

The CFTC has further delayed, until June 30, 2013, the compliance date for certain Dodd-Frank swap data recordkeeping requirements for SDs and MSPs, which were scheduled to take effect March 31, 2013.

CFTC Further Delays Some Swap Data Recordkeeping Rules for SDs and MSPs

Practical Law Legal Update 9-525-5713 (Approx. 3 pages)

CFTC Further Delays Some Swap Data Recordkeeping Rules for SDs and MSPs

by PLC Finance
Published on 03 Apr 2013 • USA (National/Federal)
The CFTC has further delayed, until June 30, 2013, the compliance date for certain Dodd-Frank swap data recordkeeping requirements for SDs and MSPs, which were scheduled to take effect March 31, 2013.
On April 1, 2013, the CFTC's Division of Swap Dealer and Intermediary Oversight issued No-action Letter 13-06 delaying until June 30, 2013 the compliance date for certain Dodd-Frank recordkeeping obligations of swap dealers (SDs) and major swap participants (MSPs) under Part 23 of the CFTC's Regulations. Most notable among the delays is the requirement that SDs and MSPs maintain all swap transaction records and daily trading records in a manner identifiable and searchable by transaction and counterparty (CFTC Regulations 23.201(a)(1), 23.202(a) and 23.202(b)), provided that SDs and MSPs continue to maintain these records using their existing search capabilities. The rule requiring SDs and MSPs to record most swap-related telephone conversations has notably not been delayed for most major swaps jurisdictions, and became effective on March 31, 2013 in these jurisdictions, including the US, as originally scheduled.
The compliance date for the following has been delayed from March 31, 2013 to June 30, 2013:
  • For landline telephones that are not located in one of the following geographic jurisdictions: United States, United Kingdom, Singapore, Hong Kong, Japan, Australia, Switzerland, and Canada, the requirement that SDs and MSPs make and keep records of all oral communications related to pre-execution swap trade information (and communications that lead to the conclusion of a related cash or forward transaction) (CFTC Regulations 23.202(a) and (b)).
  • The requirement that SDs and MSPs maintain all transaction records and daily trading records in a manner “identifiable and searchable” by transaction and counterparty (CFTC Regulations 23.201(a)(1), 23.202(a) and 23.202(b)). Delay of this requirement is subject to the condition that SDs and MSPs continue to maintain such records using existing search capabilities "in their relevant systems."
  • The requirement that SDs and MSPs use a Coordinated Universal Time (UTC) timestamp when recording quotations prior to and at the time of execution of a swap (CFTC Regulations 23.202(a)(1)(ii), (a)(2)(iv), (a)(3)(ii), (b)(3), and (b)(4)), subject to the following conditions:
    • that the data recorded in local time is convertible to UTC within a reasonable timeframe after a regulatory request for such time data is made; and
    • SDs and MSPs continue to commit to using a UTC time standard in their newly installed or upgraded systems.
  • The requirement that SDs and MSPs retain swap records at their principal place of business or such other principal offices as designated by the SD or MSP (CFTC Regulation 23.203(a)(1)). Delay of this requirement is subject to the condition that these records be "promptly available" at the SD's or MSP's designated principal place of business or other such principal office located in the US (including its territories and "possessions") within 72 hours upon request by a CFTC representative.
For information on other CFTC Dodd-Frank swap-related no-action letters, including the original no-action letter delaying SD and MSP swap recordkeeping obligations until March 31, 2013, see Legal Update, Making Sense of All the No-action Swaps Action.