In an open meeting in Washington yesterday, the CFTC approved two more final rules proposed under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The first rule sets requirements for real-time reporting of swap transaction data, and the second mandates swap data recordkeeping and reporting. A third proposal–the extension of the effective date for swap regulation–was approved and implemented prior to the meeting.
The recordkeeping and reporting rule reporting rule for swap transaction data requires swap-trading entities, including Swap Execution Facilities (“SEFs”), Designated Contract Markets (“DCMs”), Designated Clearing Organizations (“DCOs”), Swap Dealers (“SDs”), Major Swap Participants (“MSP”), and other swaps counterparties to maintain records of a swap throughout the existence of that swap, and for five years after the swap is terminated. Swap Data Repositories (“SDRs”) must keep records during the life of the swap and for fifteen years following its termination. Swap data must be reported to SDRs when the swap is created, and during its continued existence. The swap entity with easiest access to this information is responsible for reporting the information. For example, swaps created on exchanges should be reported either by the SEF or DCM. Read more details.
The swap data real-time public reporting rule requires that all swap transaction data be reported to the appropriate SDR, whether the swap was transacted on an exchange or bilaterally. The SDRs then disseminate the appropriate information to the public. A “publicly reportable swap transaction” is one which is an “arm’s length transaction between two parties resulting in a corresponding change in the market risk position” or “any termination, assignment, novation, exchange, transfer, amendment, conveyance, or extinguishing of rights or obligations of a swap that changes the pricing of the swap.” The final rule includes a phase-in schedule and an appendix with time delays for public dissemination. Read more details.