CFTC Issues Last-Minute Deadline Extension for
Derivatives End-Users with Respect to Dodd-Frank Swap
Reporting Rules and No-Action Relief from Certain InterAffiliate Swap Reporting Requirements
April 12, 2013
The U.S. Commodity Futures Trading Commission (the “CFTC”) recently issued two no-action
letters that provide last-minute relief for many derivative end-users with respect to newtransaction reporting requirements under the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the “Dodd-Frank Act”). Most notably, the CFTC delayed the deadline for most
non-swap dealer, non-major swap participant parties to report required information relating tomost categories of transactions that constitute “swaps”1 under the Dodd-Frank Act.2 The
deadline had previously been scheduled to occur on April 10, 2013 for such parties. The CFTC
also provided relief from certain reporting requirements relating to Dodd-Frank swaps between
affiliates.3

CFTC SWAP REPORTING RULES
Under the Dodd-Frank Act and CFTC regulations, the parties to any Dodd-Frank swap must
report certain information about the transaction to a registered data warehouse known as aswap data repository (“SDR”) or to the CFTC (the “Swap Reporting Rules”).4 The Swap
Reporting Rules impose reporting requirements for Dodd-Frank swaps entered into on or after
the applicable compliance date and also for so-called “historical swaps”—Dodd-Frank swaps
already in existence prior to the applicable compliance date and after the effective date of the
Dodd-Frank Act (July 21, 2010). In general, one of the parties to each such swap must be
designated as the “reporting counterparty,” and bears responsibility for reporting required

1 As defined in 7 U.S.C. § 1a(47) and associated regulations and referred to herein as “Dodd-Frank swaps.”
2 Time-Limited No-Action Relief for Swap Counterparties that are Not Swap Dealers or Major Swap Participants,from Certain Swap Data Reporting Requirements of Parts 43, 45 and 46 of the Commission’s Regulations, CFTC
No-Action Letter No. 13-10 (April 9, 2013) (the “Reporting Deadline No-Action Letter”).
3 No-Action Relief for Swaps between Affiliated Counterparties that are Neither Swap Dealers Nor Major Swap

Participants from Certain Swap Data Reporting Requirements under Parts 45, 46, and Regulation 50.50(b) of theCommission’s Regulations, CFTC No-Action Letter No. 13-09 (April 5, 2013) (the “Inter-Affiliate Swap No-Action
Letter”).
4 See, e.g., 17 C.F.R. Parts 43, 45, and 46.

Memorandum – April 12, 2013

information about the transaction at the time of entry and on an ongoing basis over the life of
the swap.5

REPORTING DEADLINE EXTENSION FOR CERTAIN REPORTING
COUNTERPARTIES
Prior to the CFTC’s no-action relief, a reporting counterparty that is neither a swap dealer6 nor amajor swap participant7 was generally required to comply with the Swap Reporting Rules withrespect to new Dodd-Frank swaps and historical swaps on or after April 10, 2013.8 The
Reporting Deadline No-Action Letter, however, extends the reporting deadline as summarized
in the table below. In all cases, the no-action relief only applies where the reporting
counterparty is not a swap dealer or major swap participant (a “non-SD/MSP”).
Dodd-Frank swaps where the reporting counterparty is a “financial entity,”9and is not a swap dealer or major swap participant10
Category of Dodd-Frank swap
Historical swaps (entered into prior to 12:01
a.m. on April 10, 2013)

Applicable new deadline under the no-action
letter (all times Eastern)
Sept. 30, 2013 (12:01 a.m.)

Swaps entered into after 12:01 a.m. on April
10, 2013
Interest rate and credit swap classes

No extension (April 10, 2013)



Equity, foreign exchange, and othercommodity swap classes

May 29, 2013 (12:01 a.m.)provided that the reporting counterparty must
backload and report to an SDR by June 29,2013 (12:01 a.m.) all swap transaction data forthe period from April 10, 2013 to May 29, 2013that the reporting counterparty would have

5 In many cases, a prescribed hierarchy under the Swap Reporting Rules automatically determines the reporting

counterparty, based on factors such as whether one or both of the parties is a swap dealer. See, e.g., 17 C.F.R. §§45.8, 46.5.
6 As defined in 7 U.S.C. § 1a(49) and 17 C.F.R. § 1.3.
7 As defined in 7 U.S.C. § 1a(33) and 17 C.F.R. § 1.3.
8 See Reporting Deadline No-Action Letter, at 2-3.
9 The term “financial entity” generally includes (subject to certain exclusions) any person who is (1) a swap dealer; (2)a security-based swap dealer; (3) a major swap participant; (4) a major security-based swap participant; (5) acommodity pool; (6) a private fund, as defined in Sec. 202(a) of the Investment Advisers Act of 1940; (7) an
employee benefit plan, as defined in paragraphs 3 and 32 of Sec. 3 of the Employee Retirement Income Security Act
of 1974; or (8) a person predominantly engaged in activities that are in the business of banking or in activities thatare financial in nature, as defined in Sec. 4(k) of the Bank Holding Company Act of 1956. 7 U.S.C. § 2(h)(7)(C); seealso Reporting Deadline No-Action Letter, at 4, n. 16.
10 Reporting Deadline No-Action Letter, at 5.

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Memorandum – April 12, 2013

been required to report pursuant to Part 45 of
the Swap Reporting Rules11 in the absence ofthe no-action relief.

Dodd-Frank swaps where the reporting counterparty is not a “financial entity”12
Category of Dodd-Frank swap
Historical swaps (entered into prior to 12:01
a.m. on April 10, 2013)

Applicable new deadline under the no-action
letter (all times Eastern)
Oct. 31, 2013 (12:01 a.m.)

Swaps entered into after 12:01 a.m. on April
10, 2013
Interest rate and credit swap classes

July 1, 2013 (12:01 a.m.)provided that the reporting counterparty must
backload and report to an SDR by Aug. 1, 2013
(12:01 a.m.) all swap transaction data for theperiod from April 10, 2013 to July 1, 2013 thatthe reporting counterparty would have beenrequired to report pursuant to Part 45 of theSwap Reporting Rules in the absence of the
no-action relief.



Equity, foreign exchange, and othercommodity swap classes

Aug. 19, 2013 (12:01 a.m.)provided that the reporting counterparty must
backload and report to an SDR by Sept. 19,
2013 (12:01 a.m.) all swap transaction data forthe period from April 10, 2013 to Aug. 19, 2013that the reporting counterparty would havebeen required to report pursuant to Part 45 of
the Swap Reporting Rules in the absence of the
no-action relief.

The CFTC notes that the Reporting Deadline No-Action Letter’s extensions of the reporting
deadlines in no way affect the compliance dates for parties’ swap recordkeeping obligations, forwhich a compliance date of April 10, 2013 (at 12:01 a.m.) remains in effect for non-SD/MSP
parties.13 Such recordkeeping obligations also include a requirement for each party covered by

11 17 C.F.R. Part 45.
12 Reporting Deadline No-Action Letter, at 6.
13 Id. at 7.

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Memorandum – April 12, 2013

the recordkeeping rules to obtain to obtain a Legal Entity Identifier, currently known as a CFTCInterim Compliant Identifier or “CICI.”14

REPORTING RELIEF WITH RESPECT TO CERTAIN INTER-AFFILIATE SWAPS
The CFTC also issued last-minute relief for persons who are not swap dealers or major swap
participants (or affiliates of such entities) from certain reporting requirements in respect of
Dodd-Frank swaps between affiliates. The relief is subject to certain conditions, as discussed
further below, with different requirements applying for new swaps entered into on or after
April 10, 2013 and for historical swaps.

Reporting Obligations with Respect to New Swaps
As described in more detail below, the Inter-Affiliate Swap No-Action Letter exempts frommost reporting requirements qualifying new Dodd-Frank swaps between affiliates where one
party holds a 100% ownership interest in the other party, or where a common third party holds
a 100% ownership interest in both parties. The letter also provides more limited relief forqualifying new Dodd-Frank swaps between affiliates where one party holds a majority
ownership interest in the other party, or where a common third party holds a majority
ownership interest in both parties, by allowing the reporting party to report required
information on a quarterly basis.
Exemption for Certain Swaps Based on 100% Ownership or Common 100% Ownership
The Inter-Affiliate Swap No-Action Letter exempts a reporting counterparty from most swap
reporting requirements15 with respect to qualifying Dodd-Frank swaps pursuant to theconditions described below:
Criteria for Inter-Affiliate Swap Exemption from Reporting Requirements16(1) The swap is between affiliated counterparties where:(a)
one affiliated counterparty, directly or indirectly, holds a 100% ownershipinterest in the other counterparty, and the affiliated counterparty that holds the 100%
ownership interest in the other counterparty reports its financial statements on aconsolidated basis under Generally Accepted Accounting Principles (“GAAP”) orInternational Financial Reporting Standards (“IFRS”), and such consolidated financial
statements include the financial results of the 100%-owned counterparty; or(b)a third party, directly or indirectly, holds a 100% ownership interest in both

14 Id.
15 Specifically, the Inter-Affiliate Swap No-Action Letter provides relief with respect to the following provisions: 17

C.F.R. §§ 45.3(d)(1) (swap creation data – primary economic terms), 45.3(d)(3) (swap creation data – confirmationdata), 45.4(c)(1)(ii) (swap continuation data – life cycle event data/state data), 45.4(c)(2)(ii) (swap continuation data
– valuation data), 45.5 (unique swap identifier), and 50.50(b) (in connection with election of the end-user exception
to clearing). See Inter-Affiliate Swap No-Action Letter, at 4.
16 Inter-Affiliate Swap No-Action Letter, at 4-6.

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Memorandum – April 12, 2013

affiliated counterparties, and the third party reports its financial statements on aconsolidated basis under GAAP or IFRS, and such consolidated financial statements
include the financial results of both of the affiliated counterparties.
For purposes of this condition, an affiliated counterparty or third party directly or indirectly
holds a 100% ownership interest if it directly or indirectly holds 100% of the equity
securities of an entity, or the right to receive upon dissolution, or the contribution of, 100%of the capital of a partnership.
(2) Neither party to the swap is (a) a swap dealer or major swap participant; (b) affiliated with aswap dealer or major swap participant; or (c) affiliated with a financial company that has
been designated as systemically important by the Financial Stability Oversight Council
pursuant to Section 113 of the Dodd-Frank Act (a “SIFI”)(3) The swap was not executed on or pursuant to the rules of a designated contract market(“DCM”), a swap execution facility (“SEF”), a foreign board of trade that is either registeredwith the CFTC pursuant to Section 4(b) of the Commodity Exchange Act and Part 48 of the
CFTC regulations or operating pursuant to CFTC no-action relief (an “FBOT”), a trading
facility (as defined in 7 U.S.C. § 1a), or any other trading platform where the orders of theaffiliated counterparties may be exposed to potential execution against unaffiliatedcounterparties.
(4) Neither party to the swap has submitted it to a derivatives clearing organization forclearing.
(5) The parties have not elected to exempt the swap from a clearing requirement pursuant to
the “Inter-Affiliate Clearing Exemption,”17 in which case applicable reporting requirements
shall apply.18(6) All swaps entered into between either one of the affiliated counterparties and an unaffiliatedcounterparty (regardless of the location of the affiliated counterparty) must be reported toan SDR pursuant to, or as if pursuant to, Parts 43, 45, and 46 of the CFTC regulations.19 (The
CFTC notes that if the unaffiliated counterparty is the reporting party for any such swap,
the affiliated counterparty may rely on the unaffiliated counterparty to report.)(7) A reporting counterparty relying on this relief must maintain records of all swap data it
would have been required to report if not for the no-action relief under the Inter-Affiliate
Swap No-Action Letter. In addition, the reporting counterparty must maintain, as part ofsuch records, internally generated swap identifiers for each swap subject to the relief.
Promptly upon request from the CFTC, the reporting counterparty must make all suchrecords available in reportable form for inspection and production.

17 See 17 C.F.R. § 50.52; see also Clearing Exemption for Swaps Between Certain Affiliated Entities (Apr. 1, 2013),

available at http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/federalregister040113.pdf.
18 The CFTC notes that this condition does not necessarily preclude the parties from electing the end-user exception

to a clearing requirement pursuant to 7 U.S.C. § 2(h)(7) (the “End-User Exception”) with respect to the Dodd-Frankswap, if eligible, and still qualifying for the no-action relief under the Inter-Affiliate No-Action Letter. See InterAffiliate No-Action Letter, at 2-3.
19 17 C.F.R. Parts 43, 45, and 46.

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Memorandum – April 12, 2013

Quarterly Reporting for Certain Swaps Based on Majority Ownership or Common Majority Ownership
The Inter-Affiliate Swap No-Action Letter provides that a reporting counterparty may comply
with most swap reporting requirements20 by reporting on a quarterly basis with respect toqualifying Dodd-Frank swaps pursuant to the conditions described below. If a swap qualifies
for this relief, the reporting party may report the relevant information within 30 days following
the end of each of its fiscal quarters, rather than according to the much shorter timing
requirements that would otherwise apply.21 The requirement to report would commence at theend of the reporting party’s first fiscal quarter ending on or after June 30, 2013.22
Criteria for Quarterly Reporting of Inter-Affiliate Swap Data23(1) The swap is between affiliated counterparties where:(a)
one affiliated counterparty, directly or indirectly, holds a majority ownershipinterest in the other counterparty, and the affiliated counterparty that holds the majority
ownership interest in the other counterparty reports its financial statements on aconsolidated basis under GAAP or IFRS, and such consolidated financial statements
include the financial results of the majority-owned counterparty; or(b)a third party, directly or indirectly, holds a majority ownership interest in bothaffiliated counterparties, and the third party reports its financial statements on aconsolidated basis under GAAP or IFRS, and such consolidated financial statements
include the financial results of both of the affiliated counterparties
For purposes of this condition, an affiliated counterparty or third party directly or indirectly
holds a majority ownership interest if it directly or indirectly holds a majority of the equity
securities of an entity, or the right to receive upon dissolution, or the contribution of, amajority of the capital of a partnership.
(2) Neither party to the swap is (a) a swap dealer or major swap participant; (b) affiliated with aswap dealer or major swap participant; or (c) affiliated with a SIFI.
(3) The swap was not executed on or pursuant to the rules of a DCM, SEF, FBOT, trading
facility (as defined in 7 U.S.C. § 1a), or any other trading platform where the orders of theaffiliated counterparties may be exposed to potential execution against unaffiliatedcounterparties.
(4) Neither party to the swap has submitted it to a derivatives clearing organization forclearing.

20 Specifically, the Inter-Affiliate Swap No-Action Letter provides relief with respect to the following provisions: 17

C.F.R. §§ 45.3(d)(1) (swap creation data – primary economic terms), 45.3(d)(3) (swap creation data – confirmationdata), 45.4(c)(1)(ii) (swap continuation data – life cycle event data/state data), 45.4(c)(2)(ii) (swap continuation data
– valuation data), 45.5 (unique swap identifier), and 50.50(b) (in connection with election of the end-user exception
to clearing). See Inter-Affiliate Swap No-Action Letter, at 6.
21 Inter-Affiliate Swap No-Action Letter, at 7.
22 Inter-Affiliate Swap No-Action Letter, at 7-8, n. 24.
23 Inter-Affiliate Swap No-Action Letter, at 6-7.

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Memorandum – April 12, 2013

(5) The parties have not elected to exempt the swap from a clearing requirement pursuant to
the “Inter-Affiliate Clearing Exemption,” in which case applicable reporting requirements
shall apply.24(6) All swaps entered into between either one of the affiliated counterparties and an unaffiliatedcounterparty (regardless of the location of the affiliated counterparty) must be reported toan SDR pursuant to, or as if pursuant to, Parts 43, 45, and 46 of the CFTC regulations.25 (The
CFTC notes that if the unaffiliated counterparty is the reporting party for any such swap,
the affiliated counterparty may rely on the unaffiliated counterparty to report.)(7) A reporting counterparty relying on this relief must maintain records of all swap data it
would have been required to report if not for the no-action relief under the Inter-Affiliate
Swap No-Action Letter. In addition, the reporting counterparty must maintain, as part ofsuch records, internally generated swap identifiers for each swap subject to the relief.
Promptly upon request from the CFTC, the reporting counterparty must make all suchrecords available in reportable form for inspection and production.
(8) The swap is not required to be reported pursuant to the CFTC’s Part 43 real-time reporting
rules.26(9) The reporting counterparty relying on this relief complies with the requirement to report all
swap data to an SDR no later than 30 days following the end of each fiscal quarter.

Reporting Obligations with Respect to Historical Swaps
The Inter-Affiliate Swap No-Action Letter exempts a reporting counterparty that is not a swap
dealer or major swap participant, and is not an affiliate of a swap dealer or major swap
participant, from requirements under Sections 46.3(a) and 46.3(b) of the Swap Reporting Rules27
to report transaction data for historical swaps that meet the criteria described below:
Criteria for Dodd-Frank swaps to qualify for the no-action relief from historical swap
reporting rules28(1) The reporting counterparty must satisfy conditions 1-4 described above for either the
exemption for swaps between 100% owned affiliates or the quarterly reporting relief forswaps between majority-owned affiliates.
(2) The reporting counterparty relying on this relief must maintain records of all historicalswap data as required by Part 46 of the Swap Reporting Rules, and must make such records

24 See supra notes 17 and 18.
25 17 C.F.R. Parts 43, 45, and 46.
26 See 17 C.F.R. Part 43.
27 17 C.F.R. §§ 46.3(a)-(b).
28 Inter-Affiliate Swap No-Action Letter, at 8.

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Memorandum – April 12, 2013

available to the CFTC for inspection and production promptly upon request, in a reportableform pursuant to Sec. 46.2 of the Swap Reporting Rules,29 or any other form as may berequested by the CFTC.30

CONCLUSION
Although the two CFTC no-action letters provide relief for many derivatives end-users from
Dodd-Frank swap reporting requirements, market participants should note that Dodd-Frankswap recordkeeping requirements continue to apply, and that the compliance date of April 10,
2013, applicable to most end-users has now passed. Market participants, therefore, should
ensure they are in compliance with applicable recordkeeping rules, in addition to any
conditions required to take advantage of the no-action relief with respect to the Dodd-Frankswap reporting rules.
***
For more information about any of the foregoing, please contact the following members of the
Firm’sDerivatives
Group:
Joyce
Xu(jxu@stblaw.com)
andBrian Chernoff(bchernoff@stblaw.com).
This memorandum is for general information purposes and should not be regarded as legal advice. Pleasecontact your relationship partner if we can be of assistance regarding these important developments. The
names and office locations of all of our partners, as well as our recent memoranda, can be obtained fromour website, www.simpsonthacher.com.
The contents of this publication are for informational purposes only. Neither this publication nor the lawyers who authored it are
rendering legal or other professional advice or opinions on specific facts or matters, nor does the distribution of this publication to
any person constitute the establishment of an attorney-client relationship. Simpson Thacher & Bartlett LLP assumes no liability inconnection with the use of this publication.

29 17 C.F.R. § 46.2.
30 Inter-Affiliate Swap No-Action Letter, at 8.

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Memorandum – April 12, 2013

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