Federal Register / Vol. 76, No. 79 / Monday, April 25, 2011 / Proposed Rules 22833 

Subject 

(d) Air Transport Association (ATA) of 

America Code 25: Equipment/Furnishings. 

Reason 

(e) The mandatory continuing 

airworthiness information (MCAI) states: 

Cracks have been found on seats [with] 

backrest links P/N (part number) 90–000200– 

104–1 and 90–000200–104–2. These cracks 

can significantly affect the structural integrity 

of seat backrests. 

Failure of the backrest links could result in 

injury to an occupant during emergency 

landing conditions. The required actions 

include a general visual inspection for 

cracking of the backrest links; replacement 

with new, improved links if cracking is 

found; and eventual replacement of all links 

with new, improved links. 

Actions and Compliance 

(f) Unless already done, do the following 

actions. 

(1) At the later of the compliance times 

specified in paragraphs (f)(1)(i) and (f)(1)(ii) 

of this AD, do a general visual inspection of 

the backrest links having P/Ns 90–000200– 

104–1 and 90–000200–104–2, in accordance 

with Part One of Sicma Aero Seat Service 

Bulletin 90–25–013, Issue 4, dated March 19, 

2004: 

(i) Before 6,000 flight hours on the backrest 

link since new. 

(ii) Within 900 flight hours or 5 months 

after the effective date of this AD, whichever 

occurs later. 

(2) If, during the inspection required by 

paragraph (f)(1) of this AD, cracking is found 

between the side of the backrest link and the 

lock-out pin hole but the cracking does not 

pass this lock-out pin hole (refer to Figure 2 

of Sicma Aero Seat Service Bulletin 90–25– 

013, Issue 4, dated March 19, 2004): Within 

600 flight hours or 3 months after doing the 

inspection, whichever occurs first, replace 

both backrest links of the affected seat with 

new, improved backrest links having P/Ns 

90–100200–104–1 and 90–100200–104–2, in 

accordance with Part Two of Sicma Aero Seat 

Service Bulletin 90–25–013, Issue 4, dated 

March 19, 2004. 

(3) If, during the inspection required by 

paragraph (f)(1) of this AD, cracking is found 

that passes beyond the lock-out pin hole 

(refer to Figure 2 of Sicma Aero Seat Service 

Bulletin 90–25–013, Issue 4, dated March 19, 

2004): Before further flight, replace both 

backrest links of the affected seat with new, 

improved backrest links having P/Ns 90– 

100200–104–1 and 90–100200–104–2, in 

accordance with Part Two of Sicma Aero Seat 

Service Bulletin 90–25–013, Issue 4, dated 

March 19, 2004. 

(4) If no cracking is found during the 

inspection required by paragraph (f)(1) of this 

AD: Do the replacement required by 

paragraph (f)(5) of this AD at the compliance 

time specified in paragraph (f)(5) of this AD. 

(5) At the later of the compliance times 

specified in paragraphs (f)(5)(i) and (f)(5)(ii) 

of this AD, replace the links, P/Ns 90– 

000200–104–1 and 90–000200–104–2, with 

new improved links, P/Ns 90–100200–104–1 

and 90–100200–104–2, in accordance with 

Part Two of Sicma Aero Seat Service Bulletin 

90–25–013, Issue 4, dated March 19, 2004. 

Doing this replacement for an affected 

passenger seat assembly terminates the 

inspection requirements of paragraph (f)(1) of 

this AD for that passenger seat assembly. 

(i) Before 12,000 flight hours on the 

backrest links, P/Ns 90–000200–104–1 and 

90–000200–104–2, since new. 

(ii) Within 900 flight hours or 5 months 

after the effective date of this AD, whichever 

occurs later. 

Credit for Actions Done in Accordance With 

Previous Service Information 

(6) Actions done before the effective date 

of this AD in accordance with Sicma Aero 

Seat Service Bulletin 90–25–013, Issue 3, 

dated December 19, 2001, including Annex 1, 

Issue 2, dated March 19, 2004, are acceptable 

for compliance with the corresponding 

actions of this AD. 

FAA AD Differences 

Note 2: This AD differs from the MCAI 

and/or service information as follows: The 

MCAI specifies doing repetitive inspections 

for cracking of links having over 12,000 flight 

hours since new until the replacement of the 

link is done. This AD does not include those 

repetitive inspections because we have 

reduced the compliance time for replacing 

those links. This AD requires replacing the 

link before 12,000 flight hours since new or 

within 900 flight hours or 5 months of the 

effective date of this AD, whichever occurs 

later. 

Other FAA AD Provisions 

(g) The following provisions also apply to 

this AD: 

(1) Alternative Methods of Compliance 

(AMOCs): The Manager, Boston Aircraft 

Certification Office, FAA, has the authority to 

approve AMOCs for this AD, if requested 

using the procedures found in 14 CFR 39.19. 

In accordance with 14 CFR 39.19, send your 

request to your principal inspector or local 

Flight Standards District Office, as 

appropriate. If sending information directly 

to the ACO, send it to ATTN: Jeffrey Lee, 

Aerospace Engineer, Boston Aircraft 

Certification Office, FAA, Engine & Propeller 

Directorate, 12 New England Executive Park, 

Burlington, Massachusetts 01803; telephone 

(781) 238–7161; fax (781) 238–7170. Before 

using any approved AMOC, notify your 

appropriate principal inspector, or lacking a 

principal inspector, the manager of the local 

flight standards district office/certificate 

holding district office. The AMOC approval 

letter must specifically reference this AD. 

(2) Airworthy Product: For any requirement 

in this AD to obtain corrective actions from 

a manufacturer or other source, use these 

actions if they are FAA-approved. Corrective 

actions are considered FAA-approved if they 

are approved by the State of Design Authority 

(or their delegated agent). You are required 

to assure the product is airworthy before it 

is returned to service. 

Related Information 

(h) Refer to MCAI French Airworthiness 

Directive 2001–613(AB), dated December 12, 

2001; and Sicma Aero Seat Service Bulletin 

90–25–013, Issue 4, dated March 19, 2004, 

including Annex 1, Issue 2, dated March 19, 

2004; for related information. 

Issued in Renton, Washington, on April 18, 

2011. 

Kalene C. Yanamura, 

Acting Manager, Transport Airplane 

Directorate, Aircraft Certification Service. 

[FR Doc. 2011–9942 Filed 4–22–11; 8:45 am] 

BILLING CODE 4910–13–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 46 

[3038–AD48] 

Swap Data Recordkeeping and 

Reporting Requirements: PreEnactment and Transition Swaps 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Proposed rulemaking. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘Commission’’ or 

‘‘CFTC’’) is proposing rules to 

implement new statutory provisions 

introduced by Title VII of the DoddFrank Wall Street Reform and Consumer 

Protection Act (‘‘Dodd-Frank Act’’). The 

Dodd-Frank Act amends the Commodity 

Exchange Act (‘‘CEA’’ or ‘‘Act’’) directing 

that rules adopted by the Commission 

shall provide for the reporting of data 

relating to swaps entered into before the 

date of enactment of the Dodd-Frank 

Act, the terms of which have not 

expired as of the date of enactment of 

that Act (‘‘pre-enactment swaps’’) and 

data relating to swaps entered into on or 

after the date of enactment of the DoddFrank Act and prior to the compliance 

date specified in the Commission’s final 

swap data reporting rules (‘‘transition 

swaps’’). This proposal would establish 

recordkeeping and reporting 

requirements for pre-enactment swaps 

and transition swaps. 

DATES: Comments must be received by 

June 9, 2011. 

ADDRESSES: You may submit comments, 

identified by RIN number 3038–AD48, 

by any of the following methods: 

• Agency Web site, via its Comments 

Online process: http:// 

comments.cftc.gov. Follow the 

instructions for submitting comments 

through the Web site. 

• Mail: David A. Stawick, Secretary of 

the Commission, Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st Street NW., 

Washington, DC 20581. 

• Hand Delivery/Courier: Same as 

mail above. 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
22834 Federal Register / Vol. 76, No. 79 / Monday, April 25, 2011 / Proposed Rules 

1Commission regulations referred to herein are 

found at 17 CFR Ch. 1. 

2 Dodd-Frank Wall Street Reform and Consumer 

Protection Act, Public Law 111–203, 124 Stat. 1376 

(2010). The text of the Dodd-Frank Act may be 

accessed at http://www.cftc.gov/LawRegulation/ 

OTCDERIVATIVES/index.htm. 

3Pursuant to Section 701 of the Dodd-Frank Act, 

Title VII may be cited as the ‘‘Wall Street 

Transparency and Accountability Act of 2010.’’ 4 7 U.S.C. 1 et seq. 5See also CEA § 1a(40)(E). 

6Regulations governing core principles and 

registration requirements for, and the duties of, 

SDRs are the subject of a separate notice of 

proposed rulemaking under part 49 of the 

Commission’s regulations. See CFTC Swap Data 

Repositories: Proposed Rule, 75 FR 80898 (Dec. 23, 

2010). 

7CEA § 21(b)(1)(A). 

8CEA § 21(b)(1)(B). 

9CEA § 1a(48). 

10CEA § 21(b)(2). 

11See CEA § 4r(a)(3). 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

All comments must be submitted in 

English, or must be accompanied by an 

English translation. Comments will be 

posted as received to http:// 

www.cftc.gov. You should submit only 

information that you wish to make 

available publicly. If you wish the 

Commission to consider information 

that may be exempt from disclosure 

under the Freedom of Information Act, 

you may submit a petition for 

confidential treatment according to the 

procedures established in CFTC 

Regulation 145.9.1 The Commission 

reserves the right, but shall have no 

obligation, to review, pre-screen, filter, 

redact, refuse or remove any or all of 

your submission from http:// 

www.cftc.gov that it may deem to be 

inappropriate for publication, such as 

obscene language. All submissions that 

have been redacted or removed that 

contain comments on the merits of the 

rulemaking will be retained in the 

public comment file and will be 

considered as required under the 

Administrative Procedure Act and other 

applicable laws, and may be accessible 

under the Freedom of Information Act. 

FOR FURTHER INFORMATION CONTACT: 

David Taylor, Branch Chief, Market 

Continuity, Division of Market 

Oversight, 202–418–5488, 

dtaylor@cftc.gov; or Irina Leonova, 

Financial Economist, Division of Market 

Oversight, 202–418–5646, 

ileonova@cftc.gov; Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st Street, NW., 

Washington, DC 20581. 

SUPPLEMENTARY INFORMATION: The 

Commission is proposing rules under its 

part 46 regulations relating to 

recordkeeping and reporting 

requirements applicable to both preenactment and transition swaps, and is 

soliciting comment on all aspects of the 

proposed rules. These rules, when 

adopted, will supersede interim final 

rules previously adopted by the 

Commission in part 44 of its regulations. 

Table of Contents 

I. Background 

A. Swap Data Provisions of the Dodd-Frank 

Act 

B. The Commission’s Proposed Rule on 

Swap Data Recordkeeping and Reporting 

Requirements 

C. The Interim Final Rules for PreEnactment and Transition Swaps 

II. Proposed New Regulations, Part 46 

III. Related Matters 

A. Regulatory Flexibility Act 

B. Paperwork Reduction Act 

C. Cost-Benefit Analysis 

IV. Proposed Compliance Date 

V. General Solicitation of Comments 

I. Background 

A. Swap Data Provisions of the DoddFrank Act 

On July 21, 2010, President Obama 

signed into law the Dodd-Frank Act.2

Title VII of the Dodd-Frank Act 3

amended the CEA 4 to establish a 

comprehensive new regulatory 

framework for swaps and security-based 

swaps. The legislation was enacted to 

reduce risk, increase transparency, and 

promote market integrity within the 

financial system by, among other things: 

(1) Providing for the registration and 

comprehensive regulation of swap 

dealers and major swap participants; (2) 

imposing clearing and trade execution 

requirements on standardized 

derivatives products; (3) creating robust 

recordkeeping and real-time reporting 

regimes; and (4) enhancing the 

Commission’s rulemaking and 

enforcement authorities with respect to, 

among others, all registered entities and 

intermediaries subject to the 

Commission’s oversight. 

To enhance transparency, promote 

standardization, and reduce systemic 

risk, Section 728 of the Dodd-Frank Act 

establishes a newly-created registered 

entity—the swap data repository 

(‘‘SDR’’) 5—to collect and maintain data 

related to swap transactions as 

prescribed by the Commission, and to 

make such data electronically available 

to regulators.6

Section 728 directs the Commission to 

prescribe standards for swap data 

recordkeeping and reporting. 

Specifically, Section 728 provides that: 

The Commission shall prescribe standards 

that specify the data elements for each swap 

that shall be collected and maintained by 

each registered swap data repository.7

These standards are to apply to both 

registered entities and counterparties 

involved with swaps: 

In carrying out [the duty to prescribe data 

element standards], the Commission shall 

prescribe consistent data element standards 

applicable to registered entities and reporting 

counterparties.8

Section 727 of the Dodd-Frank Act 

requires that each swap, either cleared 

or uncleared, shall be reported to a 

registered SDR. That Section also 

amends Section 1(a) of the CEA to add 

the definition of swap data repository: 

The term ‘swap data repository’ means any 

person that collects and maintains 

information or records with respect to 

transactions or positions in, or the terms and 

conditions of, swaps entered into by third 

parties for the purpose of providing a 

centralized recordkeeping facility for swaps.9

Section 728 also directs the 

Commission to regulate data collection 

and maintenance by SDRs. 

The Commission shall prescribe data 

collection and data maintenance standards 

for swap data repositories.10

Section 729 of the Dodd-Frank Act 

added to the CEA new Section 4r, which 

addresses reporting and recordkeeping 

requirements for uncleared swaps. 

Pursuant to this section, each swap not 

accepted for clearing by any derivatives 

clearing organization (‘‘DCO’’) must be 

reported to an SDR (or to the 

Commission if no SDR will accept the 

swap). 

Section 729 ensures that at least one 

counterparty to a swap has an obligation 

to report data concerning that swap. The 

determination of this reporting 

counterparty depends on the status of 

the counterparties involved. If only one 

counterparty is a swap dealer (‘‘SD’’), the 

SD is required to report the swap. If one 

counterparty is a major swap participant 

(‘‘MSP’’), and the other counterparty is 

neither an SD nor an MSP (‘‘non-SD/ 

MSP counterparty’’), the MSP must 

report. Where the counterparties have 

the same status—two SDs, two MSPs, or 

two non-SD/MSP counterparties—the 

counterparties must select a 

counterparty to report the swap.11

Section 729 also provides for 

reporting to the Commission of 

uncleared swaps that are not accepted 

by any SDR. Under this provision, 

counterparties to such swaps must 

maintain books and records pertaining 

to their swaps in the manner and for the 

time required by the Commission, and 

must make these books and records 

available for inspection by the 

Commission or other specified 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
Federal Register / Vol. 76, No. 79 / Monday, April 25, 2011 / Proposed Rules 22835 

12CEA § 4r(c)(2) requires individuals or entities 

that enter into an uncleared swap transaction that 

is not accepted by an SDR to make required books 

and records open to inspection by any 

representative of the Commission; an appropriate 

prudential regulator; the Securities and Exchange 

Commission; the Financial Stability Oversight 

Council; and the Department of Justice. 

13CEA § 4r(c). 

14CEA § 4r(d). 

15Subsection (A) of CEA Section 4r(a)(2) provides 

that ‘‘Each swap entered into before the date of 

enactment of the Wall Street Transparency and 

Accountability Act of 2010, the terms of which have 

not expired as of the date of enactment of that Act, 

shall be reported to a registered swap data 

repository or the Commission by a date that is not 

later than—(i) 30 days after issuance of the interim 

final rule; or (ii) such other period as the 

Commission determines to be appropriate.’’ 

16Pursuant to Section 4r(a)(2)(B), the Commission 

on October 14, 2010 published in part 44 of its 

regulations an interim final rule instructing 

specified counterparties to pre-enactment swaps to 

report data to a registered SDR or to the 

Commission by a compliance date to be established 

in reporting rules to be promulgated under Section 

2(h)(5)(A) of the CEA and advising counterparties 

of the necessity, inherent in the reporting 

requirement, to retain information pertaining to the 

terms of such swaps until reporting can be 

effectuated under permanent rules. See PreEnactment Swaps IFR, supra, note 17. 

17See CFTC Interim Final Rule for Reporting PreEnactment Swap Transactions (‘‘Pre-Enactment 

Swaps IFR’’), 75 FR 63080 (Oct. 14, 2010). 

18See CFTC Interim Final Rule for Reporting 

Post-Enactment Swap Transactions (‘‘PostEnactment Swaps IFR’’ or ‘‘Transition Swaps IFR’’), 

75 FR 78892 (Dec. 17, 2010). 

19Senator Blanche Lincoln, ‘‘Wall Street 

Transparency and Accountability Act,’’ 

Congressional Record, July 15, 2010, at S5923. 

20Subsection (A) of CEA Section 2(h)(5) 

Reporting Transition Rules provides that ‘‘Swaps 

entered into before the date of the enactment of this 

subsection shall be reported to a registered swap 

data repository or the Commission no later than 180 

days after the effective date of this subsection.’’ 

21Subsection (B) of CEA Section 2(h)(5) Reporting 

Transition Rules provides that ‘‘Swaps entered into 

on or after [the] date of enactment [of the DoddFrank Act] shall be reported to a registered swap 

data repository or the Commission no later than the 

later of (i) 90 days after [the] effective date [of 

Section 2(h)(5)] or (ii) such other time after entering 

into the swap as the Commission may prescribe by 

rule or regulation.’’ 

22 75 FR 76574 (Dec. 8, 2010) (‘‘Swap Data 

NPRM’’). 

23CEA Section 2(h)(7). 

24See Swap Data NPRM, supra, note 22 at 76580– 

76582. 

25 Id. at 76583–76584. 

26 Id. at 76580 note 37. 

regulators if requested to do so.12 It also 

requires counterparties to such swaps to 

provide reports concerning such swaps 

to the Commission upon its request, in 

the form and manner specified by the 

Commission.13 Such reports must be as 

comprehensive as the data required to 

be collected by SDRs.14

Section 729 establishes in new CEA 

Section 4r(a)(2)(A) a transitional rule 

applicable to pre-enactment swaps. 

Section 4r(a)(2)(A) provides for the 

reporting of pre-enactment swaps the 

terms of which have not expired as of 

the enactment of the Dodd-Frank Act to 

an SDR or the Commission, by a date 

that the Commission determines to be 

appropriate.15 Section 4r(a)(2)(B) 

directed the Commission to promulgate 

an interim final rule within 90 days of 

the date of enactment of the Dodd-Frank 

Act providing for the reporting of such 

pre-enactment swaps.16

Section 723 of the Dodd-Frank Act, 

which adds to the CEA new Section 

2(h)(5), addresses the reporting of swap 

data for both swaps executed before the 

enactment of the Dodd-Frank Act 17 and 

swaps executed on or after the date of 

that enactment but before the 

compliance date specified in the 

Commission’s final swap data 

recordkeeping and reporting rules.18 In 

a July 15, 2010 floor statement 

concerning swap data reporting as well 

as other aspects of the Dodd-Frank Act, 

Senator Blanche Lincoln emphasized 

that the provisions of new CEA Section 

4r (added by Section 729 of the DoddFrank Act) and new CEA Section 2(h)(5) 

(added by Section 723 of the DoddFrank Act) ‘‘should be interpreted as 

complementary to one another to assure 

consistency between them. This is 

particularly true with respect to issues 

such as the effective dates of these 

reporting requirements * * *’’ 19

This proposed rule refers to the two 

types of swaps addressed in CEA 

Section 2(h)(5) as follows. ‘‘Preenactment swap’’ means a swap 

executed before date of enactment of the 

Dodd-Frank Act (i.e., before July 21, 

2010) the terms of which have not 

expired as of the date of enactment of 

that Act.20 ‘‘Transition swap’’ means a 

swap executed on or after the date of 

enactment of the Dodd-Frank Act (i.e., 

July 21, 2010) and before the 

compliance date specified in the final 

swap data reporting and recordkeeping 

requirements regulations in part 45 of 

this chapter.21 Collectively, the 

proposed rule refers to pre-enactment 

swaps and transition swaps as 

‘‘historical swaps.’’ 

B. The Commission’s Proposed Rule on 

Swap Data Recordkeeping and 

Reporting Requirements 

On December 8, 2010, the 

Commission published for comment a 

notice of proposed rulemaking 

concerning swap data (the ‘‘Swap Data 

NPRM’’) that would establish swap data 

recordkeeping and reporting 

requirements applicable to registered 

SDRs, derivatives clearing organizations 

(‘‘DCOs’’), designated contract markets 

(‘‘DCMs’’), swap execution facilities 

(‘‘SEFs’’), SDs, major swap participants 

MSPs, and non-SD/MSP 

counterparties.22 The latter category of 

swap counterparties would include but 

not be limited to counterparties who 

qualify for the statutory end user 

exception with respect to particular 

swaps.23 Consistent with the purposes 

of the Dodd-Frank Act, the Swap Data 

NPRM would require generally that all 

DCOs, DCMs, SEFs, and swap 

counterparties keep full, complete and 

systematic records, together with all 

pertinent data and memoranda, of all 

activities relating to the business of such 

entities or persons with respect to 

swaps. The proposed rules contemplate 

that swap data reporting should include 

data from each of two important stages 

in the existence of a swap: the creation 

of the swap, and the continuation of the 

swap over its existence until its final 

termination or expiration. The proposed 

rules call for reporting of two sets of 

data generated in connection with the 

creation of the swap: primary economic 

terms data and confirmation data.24

Reporting of swap continuation data can 

follow either of two conceptual 

approaches described in the Swap Data 

NPRM: The life cycle or event flow 

approach, or the state or snapshot 

approach.25

The Swap Data NPRM did not address 

CEA Section 2(h)(5)’s mandate that the 

Commission adopt recordkeeping and 

reporting rules applicable to preenactment swaps or transition swaps, 

but instead noted that a separate 

rulemaking to establish requirements for 

these historical swaps would address 

the records, information and data 

required to be maintained and the 

timeframe for reporting such 

information to a registered SDR or to the 

Commission.26 This proposal would 

establish recordkeeping and reporting 

standards applicable to pre-enactment 

and transition swaps. 

C. The Interim Final Rules for PreEnactment and Transition Swaps 

Interim Final Rule for Pre-Enactment 

Swaps. As described above, Title VII of 

the Dodd-Frank Act added new Section 

4r(a)(2) to the CEA, which provided for 

the reporting of pre-enactment swaps 

and directed that the Commission 

promulgate, within 90 days of 

enactment of the Dodd-Frank Act, an 

interim final rule (‘‘IFR’’) providing for 

the reporting of such swaps. On October 

14, 2010, pursuant to the mandate of 

CEA Section 4r(a)(2)(B), the 

Commission published in new part 44 

of its regulations an IFR instructing 

specified counterparties to preenactment swaps to report data to a 

registered SDR or to the Commission by 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
22836 Federal Register / Vol. 76, No. 79 / Monday, April 25, 2011 / Proposed Rules 

27See Pre-Enactment Swaps IFR, supra note 17, 

at 63083. 

28See Pre-Enactment Swaps IFR, supra note 17. 

29 Id. at 63082. 

30See Transition Swaps IFR, supra note 18. 

31See Pre-Enactment Swaps IFR, supra note 17, 

at 63086, and Transition Swaps IFR, supra note 18, 

at 78894. 

32See, e.g., letters dated November 15, 2010 and 

January 18, 2011 from the Working Group of 

Commercial Energy Firms (‘‘Working Group 

letters’’); letter dated November 15, 2010 from Hess 

Corporation (‘‘Hess Corporation letter’’); letter dated 

November 15, 2010 from the Edison Electric 

Institute (‘‘EEI letter’’); letters dated November 15, 

2010 and January 18, 2011 from the Not-for-Profit 

Electric End User Coalition (‘‘Coalition letters’’); 

letter dated January 18, 2011 from the American 

Gas Association (‘‘AGA letter’’). 

33EEI letter. 

34Working Group letters; EEI letter; Hess 

Corporation letter. 

35AGA letter; Coalition letters. 

36Letter dated November 12, 2010, from the 

International Swaps and Derivatives Association, 

Inc. and the Futures Industry Association. 

37Letter dated January 11, 2011, from Barclays 

Bank PLC, BNP Paribas S.A., Deutsche Bank AG, 

Royal Bank of Canada, The Royal Bank of Scotland 

Group PLC, Socie ́te ́ Ge ́ne ́rale and UBS AG. 

38See Swap Data NPRM, supra note 20, at fn. 37. 

39See Pre-Enactment Swaps IFR, supra note 17. 

40See Transition Swaps IFR, supra note 18. 

a compliance date to be established in 

reporting rules to be promulgated under 

CEA Section 2(h)(5), and advising such 

counterparties of the necessity, inherent 

in the reporting requirement, to preserve 

information pertaining to the terms of 

such swaps until reporting was 

effectuated under permanent rules.27

This Pre-Enactment Swaps IFR stated 

that the reporting and recordkeeping 

provisions established by Section 4r and 

§§ 44.00–44.02 of the Commission’s 

regulations would remain in effect until 

the effective date of the permanent 

reporting rules to be adopted by the 

Commission pursuant to Section 2(h)(5) 

of the CEA.28 A principal purpose of 

this IFR was to advise counterparties of 

the need to retain data related to swap 

transactions so that reporting could be 

effectuated under permanent rules 

subsequently to be adopted. 

With respect to the scope and 

coverage of the Pre-Enactment Swaps 

IFR, the Commission acknowledged 

inconsistencies between the two DoddFrank provisions governing the 

Commission’s rulemaking. Specifically, 

new CEA Section 4r(a)(2) limits 

reportable pre-enactment swaps to those 

whose terms have not expired on the 

date of enactment of the Dodd-Frank 

Act; Section 2(h)(5) does not contain the 

same qualifying language. As discussed 

in the Pre-Enactment Swaps IFR, the 

Commission believes that failure to 

limit the term ‘‘pre-enactment swap’’ to 

unexpired swaps would require 

reporting of every swap that has ever 

been entered into; accordingly, the 

Commission concluded that reportable 

pre-enactment swaps should be limited 

to those whose terms had not expired at 

the time of enactment.29

Interim Final Rule for Transition 

Swaps. Section 4r of the CEA did not 

mandate an IFR establishing reporting 

provisions for transition swaps. The 

Commission nonetheless believed that 

such a rule would provide clarity and 

guidance with respect to such swaps, by 

establishing that transition swaps will 

be subject to Section 2(h)(5)(B)’s 

reporting requirements and to 

Commission regulations to be 

promulgated thereunder. The 

Commission also believed it was 

prudent to advise potential 

counterparties to such swaps that 

implicit in this prospective reporting 

requirement is the need to retain 

relevant data until such time as 

reporting can be effected. Accordingly, 

on December 17, 2010 the Commission 

published under Part 44 of its 

regulations interim final rules 

establishing that counterparties to 

transition swaps will be subject to 

permanent recordkeeping and reporting 

requirements to be adopted by the 

Commission pursuant to Section 

2(h)(5)(B) of the CEA.30

The Commission intended both the 

Pre-Enactment Swaps IFR and the 

Transition Swaps IFR to put 

counterparties on notice that swap data 

should be retained pending the 

adoption of permanent rules for preenactment and transition swaps under 

proposed part 46 of this chapter. With 

respect to both pre-enactment and 

transition swaps, the Commission stated 

that counterparties to these transactions 

should retain material information 

about such transactions. The 

Commission emphasized, however, that 

in the context of the interim rules, no 

counterparty was being required to 

create new records with respect to 

transactions that occurred in the past; 

instead, records relating to the terms of 

such transactions could be retained in 

their existing format to the extent and in 

such form as they presently exist.31

Comments Received. The Commission 

received a number of comments in 

response to each of the IFRs. Comments 

generally fell into one or more of several 

broad categories and in a number of 

instances were common to both IFRs. 

Some commenters observed that 

issuance of IFRs in advance of 

regulations further defining the term 

‘‘swap’’ (or defining other key terms in 

the Dodd-Frank Act) creates legal and 

regulatory uncertainty and increases 

compliance risk; most of these 

commenters urged the Commission to 

further detail the record retention 

aspects of the interim final rules.32 In 

this connection, commenters requested 

that the Commission issue guidance 

clarifying and limiting the information 

that must be retained,33 or create a safe 

harbor for good faith compliance 

efforts.34 Energy interests suggested that 

the Commission should ensure that end 

users need only report basic data in a 

simplified reporting scheme, or should 

outline categories of information that 

need not be retained by persons who 

anticipate becoming eligible for the end 

user exemption under the Dodd-Frank 

Act.35 One commenter urged greater 

specificity with respect to the PreEnactment IFR’s requirements, as well 

as consistency with the standards 

adopted by the Securities and Exchange 

Commission (‘‘SEC’’) and international 

regulators, and proposed alternatives to 

the requirements adopted in the IFR for 

pre-enactment swaps, particularly with 

respect to reporting protocols, record 

retention, and confidentiality issues 

(notably, those confidentiality issues 

arising in the context of cross-border 

transactions).36 Another commenter 

urged that U.S. swap data reporting 

requirements should not apply with 

respect to foreign swaps transactions, 

where counterparties are non-U.S. 

entities.37

The Commission is mindful of these 

concerns and expects to consider and 

address them, as well as all comments 

received in response to this proposed 

rule, in formulating permanent rules 

applicable to pre-enactment and 

transition swaps. 

II. Proposed New Regulations, Part 46 

As provided in the Commission’s 

Swap Data NPRM,38 Pre-Enactment 

Swaps IFR,39 and Transition Swaps 

IFR,40 this proposed rule addresses the 

records, information, and data that must 

be retained for historical swaps, the 

timeframe for reporting data to an SDR 

or the Commission concerning such 

swaps, and the specific data to be 

reported. 

Recordkeeping. For historical swaps 

in existence on or after the date of 

publication of the proposed rule, the 

rule would impose limited, specific 

recordkeeping obligations. 

Counterparties to such swaps would be 

required to keep records of an asset 

class-specific set of specified, minimum 

primary economic terms. The 

Commission believes that counterparties 

to historical swaps will possess this 

limited set of asset class-specific 

information as part of their normal 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
Federal Register / Vol. 76, No. 79 / Monday, April 25, 2011 / Proposed Rules 22837 

41The Commission understands that the 

terminology used to describe the specific terms and 

conditions of a swap can vary among market 

participants, and that agreed definitions for certain 

terms could increase consistency among 

participants in how historical swaps are described. 

The Commission therefore requests comment on 

whether the proposed minimum primary economic 

terms for each asset class are sufficiently clear in 

terms of what economic data is expected to be 

reported, or whether further clarification is needed 

in this respect. 

42As used in the IFRs, ‘‘format’’ refers to the 

method by which the information is organized and 

stored. It does not refer to a recording format (i.e., 

a format for electronic encoding of data). 

43 17 CFR part 45. 

44As provided in CEA Section 2(h)(5)(B), the 

effective date must be no sooner than 90 days after 

the effective date of CEA Section 2(h)(5), but may 

be a later date set by the Commission. 45CEA Section 4r(a)(2)(A). 

business practices.41 Commission staff 

have consulted with industry 

representatives, including buy-side 

counterparties, concerning information 

routinely kept in this connection for 

swaps in different asset classes. 

Counterparties to historical swaps in 

existence on or after the date of 

publication of this proposed rule would 

also be required to keep records of a 

confirmation of their swaps if they have 

that information in their possession on 

or after the publication date (the date 

from which public notice of this specific 

proposed recordkeeping requirement is 

available). The Commission requests 

comment concerning the 

appropriateness of these limited 

recordkeeping requirements, and 

specifically requests comment 

concerning whether all counterparties to 

historical swaps will possess the limited 

set of asset class-specific information 

called for by the proposed rule as part 

of their normal business practices. If 

there are any counterparties to historical 

swaps who do not possess the limited 

set of asset class-specific information 

called for by the proposed rule, the 

Commission requests comment from 

such counterparties concerning what 

information concerning historical swaps 

such counterparties do possess, and 

concerning what information such 

counterparties retain concerning their 

swaps in order to meet the requirements 

of other applicable law, such as hedge 

accounting requirements or the 

requirements of applicable state law. 

For historical swaps that were in 

existence as of the date of enactment of 

the Dodd-Frank Act but have expired or 

been terminated prior to the publication 

date of this proposed rule, a 

counterparty would only be required to 

keep records as provided in the 

Commission’s IFRs concerning preenactment and transition swaps: 

namely, the information and documents 

relating to the terms of the swap that the 

counterparty possessed when the 

applicable IFR was published, in 

whatever format that information is kept 

by the counterparty.42

The Commission understands that the 

minimum primary economic terms for a 

swap can vary widely depending on the 

asset class of the underlying products or 

on the nature of a particular product 

within an asset class. Consequently, the 

Commission encourages the industry to 

reach an internal consensus about the 

appropriate, asset class-specific, 

minimum primary economic terms to be 

reported for pre-enactment and 

transition swaps. The Commission 

welcomes comments from industry and 

market participants in this regard, and 

will consider them in determining the 

minimum primary economic terms to be 

specified in the final swap data 

recordkeeping and reporting rules. 

Reporting timeframe. The proposed 

rule provides that swap data reporting 

for historical swaps would commence 

on the compliance date specified in the 

Commission’s final swap data 

recordkeeping and reporting regulations 

in part 45 of this chapter.43 The 

Commission believes that the purposes 

of the Dodd-Frank Act can be best 

served by establishing a single date for 

the commencement of all swap data 

reporting pursuant to that Act. It also 

believes that the compliance date for the 

final swap data reporting regulations in 

part 45—the date on which reporting 

must commence—is the most 

practicable and appropriate date for this 

purpose. The effective date will be set 

by the Commission in its final swap 

data reporting regulations.44 In the 

Swap Data NPRM, the Commission 

requested comments concerning the 

time needed to prepare automated 

systems for swap data recordkeeping 

and reporting prior to implementation 

of the regulations, and it will carefully 

consider the comments received in 

response to that request. The 

Commission similarly requests 

comment concerning the proposal to 

specify the same compliance date as the 

date for initial data reporting concerning 

pre-enactment and transition swaps, 

and the time needed in this connection 

for preparation of necessary automated 

systems prior to the specified 

compliance date. 

Data to be reported. The proposed 

rule specifies data to be reported for 

historical swaps. For pre-enactment and 

transition swaps in existence on or after 

the date of publication of this proposed 

rule, the rule specifies the data elements 

to be reported. For historical swaps in 

existence as of enactment of the DoddFrank Act which expired or were 

terminated prior to publication of this 

proposed rule, the rule provides for 

reporting of the information relating to 

the terms of the transaction that was in 

the possession of a reporting 

counterparty as of publication of the 

applicable Commission IFR regarding 

pre-enactment or transition swaps, in 

such format as it is kept by the reporting 

counterparty. 

As noted above, the Dodd-Frank Act 

requires reporting of data concerning all 

swaps in existence as of the legislation’s 

enactment.45 Data concerning preenactment swaps and transition swaps 

will assist achievement of the systemic 

risk mitigation, market transparency, 

and market supervision purposes for 

which the Dodd-Frank Act was enacted. 

Such data will be needed to give 

regulators the complete picture of the 

swap market which the comprehensive 

regulatory framework and reporting 

requirements of the statute are designed 

to provide. Data concerning historical 

swaps also is necessary for the 

Commission to prepare the semi-annual 

reports it is required to provide to 

Congress regarding the swap market. 

The Commission is aware that 

internal swap data retention policies are 

not uniform among swap counterparties, 

and that the current automated systems 

of market participants vary with respect 

to their suitability for swap data 

reporting. The Commission believes it is 

appropriate to limit the burden placed 

on swap counterparties in connection 

with data reporting for historical swaps, 

to the extent that this can be done in a 

manner consistent with the 

requirements of the Dodd-Frank Act and 

the Commission’s need for such data. 

The Commission has also considered 

comments received concerning the PreEnactment Swaps IFR and Transition 

Swaps IFR which requested that the 

Commission specify clearly what data 

would be required to be reported 

concerning historical swaps. 

Data reporting for historical swaps in 

existence as of or after publication of 

this proposed rule. For each preenactment or transition swap in 

existence as of or after publication of 

this proposed rule, the rule calls (a) for 

an initial data report on the compliance 

date for data reporting, and (b), if such 

a historical swap has not expired or 

been terminated as of the compliance 

date specified in the final part 45 swap 

data reporting regulations, for ongoing 

reporting of required swap continuation 

data (as defined in the Commission’s 

final part 45 swap data reporting 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
22838 Federal Register / Vol. 76, No. 79 / Monday, April 25, 2011 / Proposed Rules 

46The Commission understands that 

counterparties may use either a short-form or a 

long-form confirmation. Either form can be used to 

satisfy this requirement. 

47See Swap Data NPRM, supra note 20, at 76586. 

48 Dodd-Frank Act § 721(21), CEA § 1a(47)(D). 

49The Commission intends to take the need for 

reporting counterparties to obtain Unique 

Counterparty Identifiers into account in setting the 

effective date for the data reporting rules in part 45. 

50The Commission’s proposed rule regarding 

confirmation, portfolio reconciliation and portfolio 

compression requirements for SDs and MSPs, 17 

CFR part 23, defines portfolio compression as a 

mechanism whereby substantially similar 

transactions among two or more counterparties are 

terminated and replaced with a smaller number of 

transactions of decreased notional value, in an 

effort to reduce the risk, cost, and inefficiency of 

maintaining unnecessary transactions on the 

counterparties’ books. See CFTC Notice of Proposed 

Rulemaking: Confirmation, Portfolio Reconciliation 

and Portfolio Compression Requirements for Swap 

Dealers and Major Swap Participants, 75 FR 81519 

(Dec. 28, 2010). 

regulations) during the remaining 

existence of the swap. 

The proposed rule calls for the initial 

data report for historical swaps in 

existence as of or after publication of 

this proposed rule to include the 

transaction terms included in the swap 

confirmation if the confirmation was in 

the reporting counterparty’s possession 

on or after the publication date of this 

proposed rule,46 and in any event to 

include all of the minimum primary 

economic terms for a pre-enactment or 

transition swap specified in the 

appropriate table in the Appendix to the 

proposed rule. 

The Commission understands that 

industry definitions used in 

documenting some swap transactions, 

for instance in some master agreements 

or confirmations, may not match exactly 

the asset class definitions included in 

this proposed rule, which are the same 

as the asset class definitions in the 

Commission’s part 45 proposed rules 

regarding swap data recordkeeping and 

reporting requirements. The 

Commission requests comment on how 

the proposed asset class definitions in 

this proposed rule and the overall swap 

classification scheme embodied in them 

might most appropriately be aligned 

with current swap instrument 

classifications used by the industry, and 

with definitions employed by, e.g., the 

International Swaps and Derivatives 

Association (‘‘ISDA’’), the Edison 

Electric Institute, the North American 

Energy Standards Board, and others. 

In addition, the Commission 

anticipates that some swaps subject to 

its jurisdiction may belong to two other 

swap categories: mixed swaps, and 

multi-asset swaps. Generally, a mixed 

swap is in part a security-based swap 

subject to the jurisdiction of the SEC 

and in part a swap belonging to one of 

the swap asset classes subject to the 

jurisdiction of the Commission.47 Multiasset swaps are those that do not have 

one easily identifiable primary 

underlying notional item within the 

Commission’s jurisdiction. The DoddFrank Act defines ‘‘mixed swap’’ as 

follows: ‘‘The term ‘security-based swap’ 

includes any agreement, contract, or 

transaction that is as described in 

section 3(a)(68)(A) of the Securities 

Exchange Act of 1934 (15 U.S.C. 

78c(a)(68)(A)) and is also based on the 

value of 1 [sic] or more interest or other 

rates, currencies, commodities, 

instruments of indebtedness, indices, 

quantitative measures, other financial or 

economic interest or property of any 

kind (other than a single security or a 

narrow-based security index), or the 

occurrence, non-occurrence, or the 

extent of the occurrence of an event or 

contingency associated with a potential 

financial, economic, or commercial 

consequence (other than an event 

described in subparagraph (A)(iii).’’ 48

The Commission requests comment 

concerning how such swaps should be 

treated with respect to swap data 

reporting for historical swaps, and 

concerning the category or categories 

under which swap data for such swaps 

should be reported to SDRs and 

maintained by SDRs. 

The initial data report for historical 

swaps in existence as of or after 

publication of this proposed rule would 

also be required to include the Unique 

Counterparty Identifier of the reporting 

counterparty (as defined in part 45),49

and the reporting counterparty’s 

internal system identifiers for the nonreporting counterparty and the 

particular swap transaction in question. 

The proposed rule would give nonreporting counterparties an additional 

180 days after the compliance date 

specified in the Commission’s final part 

45 rules for data reporting before they 

would be required to obtain and use a 

Unique Counterparty Identifier in 

connection with pre-enactment and 

transition swaps. The Commission is 

proposing this additional time because 

it understands that the majority of nonreporting counterparties are likely to be 

non-SD/MSP counterparties. While SDs 

and MSPs are likely to have 

infrastructure in place that can 

incorporate and track Unique 

Counterparty Identifiers, non-SD–MSP 

counterparties could need to acquire 

new automated systems or undertake 

modifications of existing systems in 

order to incorporate identifiers. The 

Commission requests comment 

concerning the appropriateness of this 

additional time, concerning the length 

of the additional time provided, and 

concerning whether the Commission 

should differentiate further between SD 

and MSP counterparties versus non-SD/ 

MSP counterparties with respect to use 

of Unique Counterparty Identifiers for 

non-reporting counterparties to preenactment and transition swaps. 

The proposed rule also requires the 

reporting counterparty to report the 

master agreement identifier (if any) used 

by the reporting counterparty’s 

automated systems to identify the 

master agreement governing a preenactment or transition swap. This 

information would allow the 

Commission and other regulators to 

aggregate transactional data to calculate 

net or gross exposure of a particular 

counterparty. The Commission requests 

comment concerning whether its final 

swap data recordkeeping and reporting 

regulations for pre-enactment and 

transition swaps should require such 

reporting of a master agreement 

identifier. 

The Commission requests comment 

concerning the appropriateness and 

adequacy of these initial data report 

requirements. Additionally, the 

Commission requests comment on the 

appropriate method for identifying the 

association of an individual swap 

transaction with a particular master 

agreement or with a swap portfolio, in 

order to identify individual swaps that 

may be subject to close-out netting and 

other provisions typical in portfolio 

compression.50 Identifying this 

association could be a necessary means 

of enabling regulators to determine a 

counterparty’s net exposure (current or 

future) on the basis of transactional data 

reported to SDRs. In particular, the 

Commission requests comment on 

whether reporting of a master agreement 

identifier as provided in this proposed 

rule is needed in this connection and 

would provide a workable means of 

achieving this goal. 

The Commission has chosen to 

propose limited requirements for 

recordkeeping and initial data reports 

concerning pre-enactment and 

transition swaps because it understands 

that the current recordkeeping and 

reporting systems that some 

counterparties to such swaps have at 

present might not be able to fulfill, with 

respect to historical swaps, 

recordkeeping and reporting 

requirements as extensive as those 

proposed in part 45. In these 

circumstances, the Commission believes 

it is appropriate to limit the burden 

imposed on such counterparties, to the 

extent that this can be done in a way 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
Federal Register / Vol. 76, No. 79 / Monday, April 25, 2011 / Proposed Rules 22839 

51For purposes of this proposed rule, ‘‘state data’’ 

has the meaning defined in part 45 of this chapter. 

See Swaps Data NPRM, supra note 20, at 76599. 

52By its nature, continuation data reporting 

occurs during the continuation of a swap prior to 

its expiration or termination. 

53Pre-Enactment Swaps IFR, supra note 15, and 

Transition Swaps IFR, supra note 18. 

54This could include submission of a PDF file. 

that is consistent with the requirements 

of the Dodd-Frank Act and the 

Commission’s need for data concerning 

historical swaps. The Commission 

believes, however, that the limited set of 

minimum primary economic terms data 

set forth in this proposed rule with 

respect to historical swaps is the 

minimum necessary to give regulators a 

picture of the risk exposures and 

counterparty participation in such 

swaps at the minimum level necessary 

for the Commission and other regulators 

to fulfill their regulatory 

responsibilities. The Commission 

requests comment concerning the 

appropriateness of this approach to 

initial data reporting for pre-enactment 

and transition swaps. 

Regarding ongoing reporting of 

required swap continuation data during 

the remaining existence of a preenactment or transition swap after the 

compliance date, the proposed rule 

follows the life cycle approach for credit 

swaps and equity swaps, and the state 

or snapshot approach for interest rate 

swaps, currency swaps, and other 

commodity swaps. This same 

distinction is made in the Commission’s 

Swap Data NPRM, which sets forth the 

Commission’s reasons for making this 

distinction, reasons which also apply 

with respect to part 46. The Commission 

believes that this unified approach to 

swap data reporting rules for preenactment, transition, and postcompliance-date swaps will minimize 

recordkeeping and swap data reporting 

burdens for industry and provide a 

coherent and consistent picture of the 

overall swap market to regulators. Since 

the proposed part 45 continuation data 

reporting requirements are aligned with 

the approach taken in the SEC’s 

proposed rules for security-based credit 

and equity swaps, this also serves to 

avoid differing requirements for 

security-based swaps and swaps. The 

Commission requests comment 

concerning whether required reporting 

of the same swap continuation data for 

pre-enactment and transition credit 

swaps and equity swaps, in line with 

the requirements of proposed part 45 

and of the SEC’s proposed rules, is 

appropriate in this connection. 

For pre-enactment or transition 

interest rate swaps, currency swaps, and 

other commodity swaps, this proposed 

rule also limits continuation data 

reporting obligations for non-SD/MSP 

reporting counterparties. Specifically, 

the proposal requires that SD or MSP 

reporting counterparties must meet 

continuation data reporting 

requirements for pre-enactment and 

transition swaps in those asset classes 

that are the same as the continuation 

data reporting requirements of proposed 

part 45 for swaps in those asset classes. 

While non-SD/MSP reporting 

counterparties for such swaps are 

required to report the state data 51

necessary to provide a daily snapshot 

view of the primary economic terms of 

the swap, the state data that must be 

reported by non-SD/MSP reporting 

counterparties for such swaps is limited 

to the state data available to the non-SD/ 

MSP reporting counterparty on the 

compliance date. This may consist of 

only the data elements contained in the 

table of minimum primary economic 

terms for various swap asset classes, as 

set forth in Appendix 1 to part 46, if that 

is all that was available to the non-SD/ 

MSP reporting counterparty on that 

date. This approach is designed to avoid 

placing undue recordkeeping and 

reporting burdens on non-SD/MSP 

counterparties, who are the reporting 

counterparties least likely to have the 

automated systems needed for more 

extensive reporting with respect to preenactment or transition swaps. The 

Commission requests comment 

concerning the appropriateness of this 

approach to continuation data reporting 

for pre-enactment and transition swaps. 

Data reporting for historical swaps in 

existence as of enactment of the DoddFrank Act but expired or terminated 

prior to publication of this proposed 

rule. For historical swaps in existence as 

of enactment of the Dodd-Frank Act 

which expired or were terminated prior 

to publication of this proposed rule, 

only an initial data report would be 

required.52 For such swaps, the 

proposed rule would require that the 

reporting counterparty report such 

information relating to the terms of the 

transaction as was in that counterparty’s 

possession as of issuance of the relevant 

Commission IFR.53 This information 

would be permitted to be reported in the 

format in which it was kept by the 

reporting counterparty.54

Selection of reporting counterparty. 

This proposed rule provides that 

determination of which counterparty to 

a pre-enactment or transition swap is 

the reporting counterparty for that swap 

shall be made according to Dodd-Frank 

Act’s hierarchy of counterparty types for 

reporting obligation purposes, in which 

SDs outrank MSPs, who outrank nonSD/MSP counterparties. Where both 

counterparties are at the same 

hierarchical level, the statute calls for 

them to select the counterparty 

obligated to report. The proposed rule 

establishes a mechanism for 

counterparties to follow in choosing the 

counterparty to report in situations 

where both counterparties have the 

same hierarchical status. Where both 

counterparties are SDs, or both are 

MSPs, or both are non-SD/MSP 

counterparties, the proposed rule 

requires the counterparties to agree as 

on term of their swap transaction which 

counterparty will fulfill reporting 

obligations. The proposed rule also 

provides that, where only one 

counterparty to a swap is a U.S. person, 

the U.S. person should be the reporting 

counterparty. The Commission believes, 

preliminarily, that this approach may be 

necessary in order to ensure compliance 

with reporting requirements in such 

situations. In these respects, the 

proposed rule mirrors the provision of 

the part 45 Swap NPRM regarding 

selection of the reporting counterparty. 

The proposed rule also provides that 

determination of the reporting 

counterparty shall be made with respect 

to the current counterparties to the swap 

as of the compliance date (for historical 

swaps in existence as of that date) or as 

of the prior expiration or termination of 

the swap (for historical swaps expired 

or terminated prior to the compliance 

date), regardless of who the 

counterparties to the swap were when it 

was originally executed. 

As noted above, where both 

counterparties have the same 

hierarchical status, the proposed rule 

calls for the counterparties to agree as 

one term of their swap transaction 

which counterparty will fulfill reporting 

obligations. In the case of a historical 

swap executed prior to publication of 

this proposed rule, for which the 

agreement to enter into the swap has 

already been made, agreement by the 

counterparties on selection of the 

reporting counterparty would require 

negotiation occurring after the 

agreement to enter into the swap was 

made, and could require amendment of 

the agreement to enter into the swap in 

this respect. The Commission requests 

comment concerning how two SD 

counterparties, two MSP counterparties, 

or two non-SD/MSP counterparties 

should select the reporting counterparty 

for a pre-enactment or transition swap 

which was executed prior to the 

publication date of this proposed rule, 

and thus does not include an agreement 

term selecting the reporting 

counterparty. The Commission also 

requests comment concerning whether 

its final data recordkeeping and 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
22840 Federal Register / Vol. 76, No. 79 / Monday, April 25, 2011 / Proposed Rules 

55 5 U.S.C. 601 et seq. 56 5 U.S.C. 601 et seq. 57 47 FR 18618 (Apr. 30, 1982). 

58 47 FR 18618 (Apr. 30, 1982). 

59Additionally, the Commission is required to 

exempt from designation entities that engage in a 

de minimis level of swaps. Id. at 18619. 

60 47 FR at 18620. 

61 29 U.S.C. 1106. 62 44 U.S.C. 3501 et seq. 

reporting rules for historical swaps 

should prescribe a method for selecting 

a reporting counterparty in such 

circumstances. The Commission may 

include such a method in the final data 

recordkeeping and reporting rules for 

historical swaps. 

The Commission has received 

comments regarding the part 45 Swap 

NPRM suggesting that, where only one 

counterparty to a swap is a U.S. person, 

the counterparty designated as the 

reporting counterparty under the 

hierarchical approach based on the 

Dodd-Frank Act and discussed above 

should be applied in the same way as 

for a swap where both counterparties 

are U.S. persons. This would mean, for 

example, that for a swap between a nonU.S. SD and a U.S. non-SD/MSP 

counterparty, the non-U.S. SD would be 

the reporting counterparty. The 

Commission requests comment 

concerning how the reporting 

counterparty for a historical swap 

should be selected when one 

counterparty is a non-U.S. person. 

Non-duplication of previous 

reporting. The Commission is aware that 

in some instances, reporting 

counterparties may have reported data 

concerning pre-enactment or transition 

swaps to a presently-existing trade 

repository prior to the compliance date. 

If such a repository is registered with 

the Commission as an SDR as of the 

compliance date, the Commission 

would not require reporting 

counterparties to report duplicate 

information to the SDR, although it 

would require reporting on the 

compliance date of any information 

required by this proposed rule that had 

not already been reported to the SDR. 

III. Related Matters 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(‘‘RFA’’) 55 requires that agencies 

consider whether the rules they propose 

will have a significant economic impact 

on a substantial number of small entities 

and, if so, provide a regulatory 

flexibility analysis respecting the 

impact.56 The regulations proposed by 

the Commission would affect SDs, 

MSPs, and non-SD/MSP counterparties 

who are counterparties to one or more 

pre-enactment or transition swaps. The 

Commission has previously established 

certain definitions of ‘‘small entities’’ to 

be used by the Commission in 

evaluating the impact of its regulations 

on small entities in accordance with the 

RFA.57

The Commission hereby determines 

that SDs and MSPs should not be 

considered small entities for purposes of 

the RFA. SDs and MSPs will play a 

central role in the national regulatory 

scheme overseeing the trading of swaps. 

With respect to SDs, the Commission 

previously has determined that Futures 

Commission Merchants (‘‘FCMs’’) 

should not be considered to be small 

entities for purposes of the RFA.58 Like 

FCMs, SDs will be subject to minimum 

capital and margin requirements and are 

expected to comprise the largest global 

financial firms.59 Similarly, with respect 

to MSPs, the Commission has 

previously determined that large traders 

are not ‘‘small entities’’ for RFA 

purposes.60 Like large traders, MSPs 

will maintain substantial positions, 

creating substantial counterparty 

exposure that could have serious 

adverse effects on the financial stability 

of the U.S. banking system or financial 

markets. 

With respect to non-SD/MSP 

counterparties, the Commission believes 

that the proposed regulations will not 

create a significant economic impact on 

a substantial number of small entities. 

The proposed rule sets forth 

recordkeeping and reporting 

requirements with respect to preenactment and transition swaps. The 

Commission believes that the records 

the proposed rule would require to be 

kept are already kept by swap 

counterparties in their normal course of 

business. The proposed rule would 

require limited swap data reporting for 

pre-enactment or transition swaps, and 

would require such reporting by nonSD/MSP counterparties only with 

respect to such swaps in which neither 

counterparty is an SD or MSP. The 

considerable majority of swaps involve 

at least one SD or MSP. In addition, 

most end users and other non-SD/MSP 

counterparties who are regulated by the 

Employee Retirement Income Security 

Act of 1974 (‘‘ERISA’’), such as pension 

funds, which are among the most active 

participants in the swap market, are 

prohibited from transacting directly 

with other ERISA-regulated 

participants.61 For these reasons, the 

Commission does not believe that the 

regulations would have a significant 

economic impact on a substantial 

number of small entities. 

Accordingly, the Chairman, on behalf 

of the Commission, hereby certifies 

pursuant to 5 U.S.C. 605(b) that the 

proposed rule will not have a significant 

economic impact on a substantial 

number of small entities. Nonetheless, 

the Commission specifically requests 

comment on the impact this proposed 

rule may have on small entities. 

B. Paperwork Reduction Act 

Introduction. Provisions of the 

proposed rule would result in new 

collection of information requirements 

within the meaning of the Paperwork 

Reduction Act (‘‘PRA’’).62 The 

Commission therefore is submitting this 

proposal to the Office of Management 

and Budget (OMB) for review in 

accordance with 44 U.S.C. 3507(d) and 

5 CFR 1320.11. The title for this 

collection of information is ‘‘Regulations 

46.2 and 46.3—Swap Data 

Recordkeeping and Reporting: PreEnactment and Transition Swaps,’’ OMB 

control number 3038–NEW. If adopted, 

responses to this new collection of 

information would be mandatory. The 

Commission will protect proprietary 

information according to the Freedom of 

Information Act and 17 CFR part 145, 

‘‘Commission Records and Information.’’ 

In addition, section 8(a)(1) of the Act 

strictly prohibits the Commission, 

unless specifically authorized by the 

Act, from making public ‘‘data and 

information that would separately 

disclose the business transactions or 

market positions of any person and 

trade secrets or names of customers.’’ 

The Commission also is required to 

protect certain information contained in 

a government system of records 

according to the Privacy Act of 1974, 5 

U.S.C. 552a. 

Information Provided by Reporting 

Entities/Persons. The proposed rule sets 

forth recordkeeping and reporting 

requirements for SDs, MSPs, and nonSD/MSP counterparties. 

Recordkeeping Burdens. Under 

proposed Regulation 46.2, all 

counterparties to pre-enactment or 

transition swaps would be required to 

keep records relating to such swaps. For 

swaps that are in existence as of or after 

the enactment of the Dodd-Frank Act, 

but are expired as of the publication of 

the proposed rule, the proposed 

Regulation 46.2 requires that parties 

simply maintain the swap records 

already in their possession, in the form 

in which they are already maintained. 

For purposes of the PRA, the 

Commission will not calculate the 

burden for this requirement; the 

Commission has previously calculated 

the burden for this requirement in the 


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63The recordkeeping burden for those final rules 

is calculated based on the number of annual 

counterparties to swaps and therefore implicitly 

includes counterparties to pre-enactment and 

transition swaps that are unexpired after the 

effective date. 

64As noted, the applicable recordkeeping burden 

applies during a period estimated by the 

Commission to be one year. The Commission has 

previously estimated that there are annually 30,000 

non-SD/MSP entities who are counterparties to a 

swap (see, e.g., the Commission’s Paperwork 

Reduction Act statement for the Swap Data 

Recordkeeping and Reporting Requirements 

Proposed Rulemaking). The Commission has also 

previously estimated that there are 250 SDs and 50 

MSPs. Therefore, a total of 30,300 entities would be 

subject to the recordkeeping burdens of the 

proposed rule. 

65The Commission has previously estimated that 

there are annually 1,500 non-SD/MSP 

counterparties who are a ‘‘reporting counterparty’’ 

(see, e.g., the Commission’s Paperwork Reduction 

Act statement for the Swap Data Recordkeeping and 

Reporting Requirements Proposed Rulemaking). In 

addition, the Commission has previously estimated 

that there are 250 SDs and 50 MSPs. The 

Commission believes that the number of entities 

who are reporting counterparties to pre-enactment 

or transition swaps (that are in existence as of or 

after the enactment of the Dodd-Frank Act) is 

similar to the number of annual reporting 

counterparties. The Commission requests comment 

on this estimate. 

66The reporting burden for those final rules is 

calculated based on the number of annual 

‘‘reporting counterparties’’ to swaps and therefore 

implicitly include reporting counterparties to preenactment and transition swaps that are unexpired 

after the effective date. 

PRA analyses for the interim final rules 

for pre-enactment and transition swaps. 

For pre-enactment or transition swaps 

that are in existence as of or after the 

publication of the proposed rule, the 

proposed Regulation 46.2 would require 

counterparties to keep records of a 

minimum set of primary economic data 

relating to such swaps. The Commission 

believes that counterparties already 

would possess this set of primary 

economic data as part of their normal 

business practices. The proposed 

regulation provides that counterparties 

must record certain additional 

information (e.g., information relating to 

confirmation) only if the counterparty is 

in possession of that information on or 

after the publication date of the 

proposed rule. After the compliance 

date specified in the Commission’s final 

swap data rules in Part 45, proposed 

Regulation 46.2 provides that 

counterparties must record information 

required by recordkeeping provisions of 

those final swap rules only if such 

information is available to the 

counterparty on or after the compliance 

date specified in those rules. 

For historical swaps that are in 

existence as of or after the publication 

date of the proposed rule, the rule 

would require the counterparties to 

keep the records beginning on the 

publication date of the proposed rule 

and through the life of the swap, and for 

a period of at least five years from the 

final termination of the swap. In 

calculating the burden of this 

recordkeeping requirement for purposes 

of the PRA, the Commission will not 

include the burdens occurring after the 

compliance date specified in the 

Commission’s final swap data rules in 

Part 45; the burden occurring after the 

compliance date is and will be 

subsumed by the recordkeeping burdens 

calculated for those final rules.63

Therefore, for this proposed rule, the 

Commission will only calculate a 

recordkeeping burden for the time 

period beginning with the publication 

date of this proposed rule, and ending 

on the compliance date. The 

Commission estimates this period of 

time to be approximately one year. The 

Commission estimates that 30,300 SDs, 

MSPs, and non-SD/MSP counterparties 

will be affected by these recordkeeping 

burdens during this time.64 With respect 

to SDs and MSPs (an estimated 300 

entities or persons), which will have 

higher levels of swap recording activity 

than non-SD/MSP counterparties, the 

Commission estimates that the average 

one-time burden per entity is 40 hours, 

excluding customary and usual business 

practices. With respect to non-SD/MSP 

reporting counterparties (an estimated 

30,000 entities or persons), who will 

have lower levels of swap recording 

activity, the Commission estimates that 

the average one-time burden per entity 

is 10 hours, excluding customary and 

usual business practices. Therefore, the 

total aggregate one-time burden is 

312,000 hours. The Commission 

requests comment on this estimate. 

Reporting Burdens. The reporting 

obligations set forth in proposed 

Regulation 46.3 involve both an initial 

data report and ongoing reporting of 

required swap continuation data 

relating to pre-enactment and transition 

swaps. For historical swaps that are in 

existence as of or after the enactment of 

the Dodd-Frank Act, but expired prior to 

publication of the proposed rule, the 

rule would require only an initial data 

report. 

The proposed regulation provides that 

reporting counterparties for preenactment or transition swaps must 

make an initial data report relating to 

those swaps. The frequency of the report 

would be once per swap, and the report 

would occur on the compliance date of 

the Commission’s final swap data 

recordkeeping and reporting regulations 

in Part 45. The report would not be 

required to be made for historical swaps 

that are expired as of the enactment of 

the Dodd-Frank Act. The Commission 

estimates that there are 1,800 affected 

entities who will be reporting 

counterparties for pre-enactment and 

transition swaps.65 The Commission 

estimates that the average one-time 

reporting burden for each affected entity 

is 24 hours. Therefore, the total 

aggregate one-time burden is 43,200 

hours. The Commission requests 

comment on this estimate. 

The proposed regulation also provides 

for an ongoing reporting obligation that 

must be fulfilled by reporting 

counterparties to pre-enactment and 

transition swaps that are in existence as 

of the compliance date specified in the 

Commission’s final swap data reporting 

rules in part 45. The burden for this 

ongoing reporting is and will be 

subsumed by the reporting burden 

calculated for the Commission’s final 

swap data recordkeeping and reporting 

regulations in part 45.66 Therefore, for 

this proposed rulemaking, the 

Commission will not calculate a burden 

estimate for ongoing reporting. 

Information Collection Comments. 

The Commission invites the public and 

other federal agencies to comment on 

any aspect of the reporting and 

recordkeeping burdens discussed above. 

Pursuant to 44 U.S.C. 3506(c)(2)(B), the 

Commission solicits comments in order 

to: (i) evaluate whether the proposed 

collections of information are necessary 

for the proper performance of the 

functions of the Commission, including 

whether the information will have 

practical utility; (ii) evaluate the 

accuracy of the Commission’s estimate 

of the burden of the proposed 

collections of information; (iii) 

determine whether there are ways to 

enhance the quality, utility, and clarity 

of the information to be collected; and 

(iv) minimize the burden of the 

collections of information on those who 

are to respond, including through the 

use of automated collection techniques 

or other forms of information 

technology. 

Comments may be submitted directly 

to the Office of Information and 

Regulatory Affairs, by fax at (202) 395– 

6566 or by e-mail at 

OIRAsubmissions@omb.eop.gov. Please 

provide the Commission with a copy of 

submitted comments so that all 

comments can be summarized and 

addressed in the final rule preamble. 

Refer to the Addresses section of this 

notice of proposed rulemaking for 

comment submission instructions to the 

Commission. A copy of the supporting 

statements for the collections of 

information discussed above may be 

obtained by visiting RegInfo.gov. OMB 

is required to make a decision 


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concerning the collection of information 

between 30 and 60 days after 

publication of this release. 

Consequently, a comment to OMB is 

most assured of being fully effective if 

received by OMB (and the Commission) 

within 30 days after publication of this 

notice of proposed rulemaking. 

C. Cost-Benefit Analysis 

Introduction. Section 15(a) of the CEA 

requires the Commission to consider the 

costs and benefits of its actions before 

issuing a rulemaking under the Act. By 

its terms, section 15(a) does not require 

the Commission to quantify the costs 

and benefits of the rulemaking or to 

determine whether the benefits of the 

rulemaking outweigh its costs; rather, it 

requires that the Commission ‘‘consider’’ 

the costs and benefits of its actions. 

Section 15(a) further specifies that the 

costs and benefits shall be evaluated in 

light of five broad areas of market and 

public concern: (1) Protection of market 

participants and the public; (2) the 

efficiency, competitiveness and 

financial integrity of markets; (3) price 

discovery; (4) sound risk management 

practices; and (5) other public interest 

considerations. The Commission may in 

its discretion give greater weight to any 

one of the five enumerated areas and 

could in its discretion determine that, 

notwithstanding its costs, a particular 

rule is necessary or appropriate to 

protect the public interest or to 

effectuate any of the provisions of or 

accomplish any of the purposes of the 

Act. 

Summary of Proposed Requirements. 

The proposed rule provides that 

counterparties to pre-enactment or 

transition swaps must keep records of, 

and must report, certain information 

relating to the swaps. The proposed 

reporting requirements involve both an 

initial report and ongoing reporting that 

continues until the final termination of 

the swap. 

Costs. There are recordkeeping and 

reporting costs associated with the 

proposed requirements to record and 

report certain swap information. The 

Commission has crafted the rule to be 

efficient in terms of those costs and has 

also attempted to minimize the burden 

on non-SD/MSP counterparties. The 

proposed rule provides that certain 

records must be kept by a counterparty 

only if the counterparty is in possession 

of that information on or after certain 

dates as provided in the regulations. 

The proposed rule would require a 

counterparty to a pre-enactment or 

transition swap in existence as of or 

after publication of this proposed rule to 

keep, at a minimum, records of a 

specified set of primary economic terms 

data; however, the Commission believes 

that counterparties already would 

possess this information as part of their 

normal business practices. For non-SD/ 

MSP reporting counterparties for preenactment or transition swaps in the 

interest rate, currency, or other 

commodity asset classes, the proposed 

rule limits the scope of required 

continuation data reporting to the data 

elements available to the reporting 

counterparty on the compliance date 

specified in the Commission’s final 

swap data rules in Part 45. 

Benefits. In addition to being 

mandated by the Dodd-Frank Act, 

reporting of data concerning preenactment and transition swaps is 

essential to the fundamental systemic 

risk mitigation, transparency, and 

market supervision purposes for which 

the Dodd-Frank Act was enacted. This 

reporting is necessary to give regulators 

complete information regarding the 

entire swap market. It provides the 

Commission and other financial 

regulators with necessary insight 

concerning the number of transactions 

and the number and type of participants 

involved in the swap market, as well as 

its outstanding notional size. Such 

information provides both a baseline 

against which to assess the development 

of the swap market over time and a first 

step toward a transparent and wellregulated market for swaps. Data 

concerning pre-enactment and 

transition swaps also is necessary for 

the Commission to prepare the semiannual reports it is required to provide 

to Congress. 

Public Comment. For the reasons set 

forth above, the Commission believes 

that the benefits of the proposed 

regulations outweigh their costs, and 

has decided to issue them. The 

Commission invites public comment on 

its cost-benefit considerations. 

Commenters are also invited to submit 

any data or other information that they 

may have quantifying or qualifying the 

costs and benefits of the proposal with 

their comment letters. 

IV. Proposed Compliance Date 

The Commission understands that, 

after the date on which the Commission 

issues final swap data recordkeeping 

and reporting regulations, including its 

final regulations concerning preenactment and transition swaps, the 

industry will need a reasonable period 

of time to implement the requirements 

of those regulations. Time may be 

required for entities to register as SEFs, 

DCMs, DCOs, or SDRs (or for extant 

DCMs or DCOs to revise their rules and 

procedures) pursuant to new 

Commission regulations concerning 

such entities. Time may also be needed 

for registered entities and potential 

swap counterparties to adapt or create 

automated systems capable of fulfilling 

the requirements of Commission 

regulations concerning swap data 

recordkeeping and reporting. 

Accordingly, it may be appropriate for 

the Commission’s final swap data 

recordkeeping and reporting 

regulations, including those for preenactment and transition swaps, to 

establish a compliance date that is later 

than the date the final regulations are 

issued. 

The Commission requests comment 

concerning the need for a compliance 

date for its final swap data 

recordkeeping and reporting 

regulations, including those for preenactment and transition swaps, that is 

later than the date of their issuance; 

concerning the benefits or drawbacks of 

such an approach; concerning the length 

of time needed for registered entities 

and potential swap counterparties to 

prepare for implementation in the ways 

discussed above, or otherwise; and 

concerning the compliance date which 

the Commission should specify in its 

final regulations concerning swap data 

recordkeeping and reporting. 

V. General Solicitation of Comments 

The Commission requests comments 

concerning all aspects of the proposed 

regulations, including, without 

limitation, all of the aspects of the 

proposed regulations on which 

comments have been requested 

specifically herein. 

Proposed Rules 

List of Subjects in 17 CFR Part 46 

Swaps, Data recordkeeping 

requirements and Data reporting 

requirements. 

For the reasons set forth in the 

preamble, and pursuant to the authority 

in the Commodity Exchange Act, as 

amended, and in particular Sections 

2(h)(5) and 4r(a), the Commission also 

hereby proposes to amend Chapter 1 of 

Title 17 of the Code of Federal 

Regulations by adding Part 46 to read as 

follows: 

PART 46—SWAP DATA 

RECORDKEEPING AND REPORTING 

REQUIREMENTS: PRE-ENACTMENT 

AND TRANSITION SWAPS 

Sec. 

46.1 Definitions. 

46.2 Recordkeeping for pre-enactment 

swaps and transition swaps. 

46.3 Swap data reporting for pre-enactment 

swaps and transition swaps. 

46.4 Unique identifiers. 


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46.5 Determination of which counterparty 

must report. 

46.6 Third-party facilitation of data 

reporting. 

46.7 Reporting to a single swap data 

repository. 

46.8 Data reporting for swaps in a swap 

asset class not accepted by any swap 

data repository. 

46.9 Required data standards. 

46.10 Reporting of errors and omissions in 

previously reported data. 

Appendix to Part 46—Tables of Minimum 

Primary Economic Terms Data for PreEnactment and Transition Swaps. 

Authority: Title VII, sections 723 and 729, 

Pub. L. 111–203, 124 Stat. 1738. 

§ 46.1 Definitions. 

Terms used in this part are defined as 

follows: 

Asset class means the particular broad 

category of goods, services or 

commodities underlying a swap. The 

asset classes include interest rate, 

currency, credit, equity, other 

commodity, and such other asset classes 

as may be determined by the 

Commission. 

Compliance date means the 

compliance date specified in the final 

swap data recordkeeping and reporting 

regulations in part 45 of this chapter as 

the date on which those regulations will 

be implemented, i.e., the date on which 

registered entities and swap 

counterparties must begin to comply 

with those regulations. 

Confirmation (confirming) means the 

consummation (electronically or 

otherwise) of legally binding 

documentation (electronic or otherwise) 

that memorializes the agreement of the 

parties to all terms of a swap. A 

confirmation must be in writing 

(whether electronic or otherwise) and 

must legally supersede any previous 

agreement (electronically or otherwise). 

Confirmation data means all of the 

terms of a swap matched and agreed 

upon by the counterparties in 

confirming the swap. 

Credit support agreement means an 

International Swaps and Derivatives 

Association, Inc. credit support 

agreement or equivalent agreement. 

Credit swap means any swap that is 

primarily based on instruments of 

indebtedness, including, without 

limitation: any swap primarily based on 

one or more broad-based indices related 

to instruments of indebtedness; and any 

swap that is an index credit swap or 

total return swap on one or more indices 

of debt instruments. 

Currency swap means any swap 

which is primarily based on rates of 

exchange between different currencies, 

changes in such rates, or other aspects 

of such rates. This category includes 

foreign exchange swaps as defined in 

Commodity Exchange Act Section 

1a(25). 

Electronic reporting or reporting 

electronically means reporting data in 

compliance with § 46.9 of this part. The 

obligation to report electronically is not 

satisfied by electronic transmission of 

an image of a document. 

Equity swap means any swap that is 

primarily based on equity securities, 

including, without limitation: any swap 

primarily based on one or more broadbased indices of equity securities; and 

any total return swap on one or more 

equity indices. 

Interest rate swap means any swap 

which is primarily based on one or more 

interest rates, such as swaps of 

payments determined by fixed and 

floating interest rates. 

Major swap participant has the 

meaning set forth in Commodity 

Exchange Act, Section 1a(33), and any 

Commission regulation implementing 

that Section. 

Master agreement means an 

agreement, signed by the counterparties, 

providing comprehensive 

documentation of standard terms and 

conditions covering one or more swap 

transactions between such 

counterparties. 

Non-swap dealer/major swap 

participant counterparty means a swap 

counterparty that is neither a swap 

dealer nor a major swap participant. 

Other commodity swap means any 

swap not included in the credit swap, 

currency swap, equity swap, or interest 

rate swap categories, including, without 

limitation, any swap for which the 

primary underlying item is a physical 

commodity or the price or any other 

aspect of a physical commodity. 

Pre-enactment swap means any swap 

entered into prior to enactment of the 

Dodd-Frank Act of 2010 (July 21, 2010), 

the terms of which have not expired as 

of the date of enactment of that Act. 

Reporting counterparty means the 

counterparty required to report swap 

data pursuant to § 45.5 of this chapter. 

Swap data repository has the meaning 

set forth in Commodity Exchange Act 

Section 1a(48), and any Commission 

regulation implementing that Section. 

Swap dealer has the meaning set forth 

in Commodity Exchange Act, Section 

1a(49), and any Commission regulation 

implementing that Section. 

Transition swap means any swap 

entered into on or after the enactment of 

the Dodd-Frank Act of 2010 (July 21, 

2010) and prior to the compliance date 

specified in the final swap data 

reporting and recordkeeping 

requirements regulations in part 45 of 

this chapter. 

§ 46.2 Recordkeeping for pre-enactment 

swaps and transition swaps. 

(a) Recordkeeping for pre-enactment 

and transition swaps in existence on or 

after April 25, 2011. Each counterparty 

to any pre-enactment swap or transition 

swap that is in existence on or after 

April 25, 2011 shall keep the following 

records concerning each such swap: 

(1) Minimum records required. The 

minimum records required to be kept 

concerning each pre-enactment swap 

and transition swap shall be as follows: 

(i) Each counterparty shall keep 

records of all of the minimum primary 

economic terms data specified in the 

appendix to this part. 

(ii) If at any time on or after April 25, 

2011 a counterparty is in possession of 

a confirmation of the swap executed by 

the counterparties, the counterparty 

shall keep records of all terms of that 

confirmation. 

(2) Additional records required to be 

kept if possessed by a counterparty. In 

addition to the minimum records 

required pursuant to paragraph (a)(1) of 

this part, a counterparty that is in 

possession at any time on or after April 

25, 2011 of any of the following 

documentation shall keep copies 

thereof: 

(i) Any master agreement governing 

the swap, and any modification or 

amendment thereof. 

(ii) Any credit support agreement or 

equivalent documentation relating to 

the swap, and any modification or 

amendment thereof. 

(3) Records created or available after 

the compliance date. In addition to the 

records required to be kept pursuant to 

paragraphs (a)(1) and (2) of this section, 

each counterparty to any pre-enactment 

swap or transition swap that remains in 

existence on the compliance date shall 

keep for each such swap, from the 

compliance date forward, all of the 

records required to be kept by § 45.2 of 

this chapter, to the extent that any such 

records are created by or become 

available to the counterparty on or after 

the compliance date. 

(b) Recordkeeping for pre-enactment 

and transition swaps expired or 

terminated prior to April 25, 2011. Each 

counterparty to any pre-enactment swap 

or transition swap that is expired or 

terminated prior to April 25, 2011 shall 

keep the following records concerning 

each such swap: 

(1) Pre-enactment swaps expired prior 

to April 25, 2011. Each counterparty to 

any pre-enactment swap that expired or 

was terminated prior to April 25, 2011 

shall retain the information and 

documents relating to the terms of the 

transaction that were possessed by the 

counterparty on or after October 14, 


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2010 (17 CFR 44.00 through 44.02). 

Such information may be retained in the 

format in which it existed on or after 

October 14, 2010, or in such other 

format as the counterparty chooses to 

retain it. This paragraph (b)(1) does not 

require the counterparty to create or 

retain records of information not in its 

possession on or after October 14, 2010, 

or to alter the format, i.e., the method 

by which the information is organized 

and stored. 

(2) Transition swaps expired prior to 

April 25, 2011. Each counterparty to any 

transition swap that expired or was 

terminated prior to April 25, 2011 shall 

retain the information and documents 

relating to the terms of the transaction 

that were possessed by the counterparty 

on or after December 17, 2010 (17 CFR 

44.03). Such information may be 

retained in the format in which it 

existed on or after December 17, 2010, 

or in such other format as the 

counterparty chooses to retain it. This 

paragraph (b)(2) does not require the 

counterparty to create or retain records 

of information not in its possession on 

or after December 17, 2010, or to alter 

the format, i.e., the method by which 

the information is organized and stored. 

(c) Retention period. All records 

required to be kept by this § 46.2 shall 

be kept from the applicable dates 

specified in paragraph (b) of this section 

through the life of the swap, and for a 

period of at least five years from the 

final termination of the swap, in a form 

and manner acceptable to the 

Commission. 

(d) Retrieval. Records required to be 

kept pursuant to this § 46.2 shall be 

retrievable as follows: 

(1) Each record required to be kept by 

a counterparty that is a swap dealer or 

major swap participant shall be readily 

accessible via real time electronic access 

by the counterparty throughout the life 

of the swap and for two years following 

the final termination of the swap, and 

shall be retrievable by the registrant or 

its affiliates within three business days 

through the remainder of the period 

following final termination of the swap 

during which it is required to be kept. 

(2) Each record required to be kept by 

a non-swap dealer/major swap 

participant counterparty shall be 

retrievable by the counterparty within 

three business days through the period 

during which it is required to be kept. 

(e) Inspection. All records required to 

be kept pursuant to this section shall be 

open to inspection upon request by any 

representative of the Commission, the 

United States Department of Justice, or 

the Securities and Exchange 

Commission, or by any representative of 

a prudential regulator. Copies of all 

such records shall be provided, at the 

expense of the entity or person required 

to keep the record, to any representative 

of the Commission upon request, either 

by electronic means, in hard copy, or 

both, as requested by the Commission. 

§ 46.3 Swap data reporting for preenactment swaps and transition swaps. 

(a) Reporting for pre-enactment and 

transition swaps in existence on or after 

April 25, 2011. (1) Initial data report. 

For each pre-enactment swap or 

transition swap in existence on or after 

April 25, 2011, the reporting 

counterparty shall report electronically 

to a swap data repository (or to the 

Commission if no swap data repository 

for swaps in the asset class in question 

is available), on the compliance date, 

the following: 

(i) All of the terms of the confirmation 

that are recorded in the automated 

systems of the reporting counterparty, if 

the terms so reported include all of the 

minimum primary economic terms data 

specified in the appendix to this part; or 

all of the minimum primary economic 

terms data specified in the appendix to 

this part; 

(ii) The Unique Counterparty 

Identifier required pursuant to § 46.4 of 

this part; and 

(iii) The following additional 

identifiers: 

(A) The internal counterparty 

identifier used by the automated 

systems of the reporting counterparty to 

identify the non-reporting counterparty; 

(B) The internal transaction identifier 

used by the automated systems of the 

reporting counterparty to identify the 

swap; and 

(C) The internal master agreement 

identifier (if any) used by the automated 

systems of the reporting counterparty to 

identify the master agreement governing 

the swap. 

(2) Non-duplication of previous 

reporting. If the reporting counterparty 

for a pre-enactment or transition swap 

has reported any of the information 

required as part of the initial data report 

by paragraph (a) of this section to a 

trade repository prior to the compliance 

date, and if as of the compliance date 

that repository has registered with the 

Commission as a swap data repository, 

then: 

(i) The counterparty shall not be 

required to report such previously 

reported information to the swap data 

repository again; 

(ii) The counterparty shall be required 

to report to the swap data repository on 

the compliance date any information 

required as part of the initial data report 

by § 46.3(a) of this part that has not been 

reported prior to the compliance date; 

and 

(iii) The initial data report required by 

paragraph (b)(2) of this section and all 

subsequent data reporting concerning 

the swap shall be made to the same 

swap data repository to which data 

concerning the swap was reported prior 

to the compliance date (or to its 

successor in the event that it ceases to 

operate, as provided in part 49 of this 

chapter). 

(3) Reporting of required swap 

continuation data for a credit swap or 

equity swap. For each pre-enactment or 

transition swap in either the credit swap 

or equity swap asset class, that is in 

existence on or after April 25, 2011, 

throughout the existence of the swap 

following the compliance date, the 

reporting counterparty, as defined in 

part 45 of this chapter, shall report all 

required swap continuation data 

required to be reported for credit swaps 

or equity swaps under part 45 of this 

chapter. 

(4) Reporting of required swap 

continuation data for an interest rate 

swap, other commodity swap, or 

currency swap. For each pre-enactment 

or transition swap in the interest rate, 

other commodity, or currency asset 

class, that is in existence on or after 

April 25, 2011, throughout the existence 

of the swap following the compliance 

date, the reporting counterparty as 

defined in part 45 shall report required 

swap continuation data as follows: 

(i) Swaps for which the reporting 

counterparty is a swap dealer or major 

swap participant. For each preenactment swap or transition swap in 

existence on or after April 25, 2011, for 

which the reporting counterparty as 

defined in part 45 is a swap dealer or 

major swap participant, the reporting 

counterparty shall report to a swap data 

repository electronically all required 

swap continuation data concerning the 

swap as provided in part 45. 

(ii) Swaps for which the reporting 

counterparty is a non-swap dealer/ 

major swap participant counterparty. 

For each pre-enactment swap or 

transition swap in existence on or after 

April 25, 2011, for which the reporting 

counterparty as defined in part 45 is a 

non-swap dealer/major swap participant 

counterparty, the reporting counterparty 

shall report to a swap data repository 

electronically all required swap 

continuation data concerning the swap 

as provided in part 45. However, 

notwithstanding any other provision of 

part 45, the state data reported to 

provide a snapshot view, on a daily 

basis, of the primary economic terms of 

the swap shall be the greater of the 

following which is in the possession of 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
Federal Register / Vol. 76, No. 79 / Monday, April 25, 2011 / Proposed Rules 22845 

the reporting counterparty on the 

compliance date: 

(A) The state data, or any part thereof, 

for the swap as defined in part 45 of this 

chapter; or 

(B) All of the data elements contained 

in the table of minimum primary 

economic terms for pre-enactment or 

transition swaps in the asset class of the 

swap in question that is included in the 

appendix to this part. 

(b) Reporting for pre-enactment and 

transition swaps expired or terminated 

prior to April 25, 2011. (1) Preenactment swaps expired or terminated 

prior to April 25, 2011. For each preenactment swap which expired or was 

terminated prior to April 25, 2011, the 

reporting counterparty shall report to a 

swap data repository (or to the 

Commission if no swap data repository 

for swaps in the asset class in question 

is available), on the compliance date, 

such information relating to the terms of 

the transaction as was in the reporting 

counterparty’s possession on or after 

October 14, 2010 (17 CFR 44.00 through 

44.02). This information can be reported 

via any method selected by the 

reporting counterparty. 

(2) Transition swaps expired or 

terminated prior to April 25, 2011. For 

each transition swap which expired or 

was terminated prior to April 25, 2011, 

the reporting counterparty shall report 

to a swap data repository (or to the 

Commission if no swap data repository 

for swaps in the asset class in question 

is available), on the compliance date, 

such information relating to the terms of 

the transaction as was in the reporting 

counterparty’s possession on or after 

December 17, 2010 (17 CFR 44.03). This 

information can be reported via any 

method selected by the reporting 

counterparty. 

§ 46.4 Unique identifiers. 

The unique identifier requirements 

for swap data reporting with respect to 

pre-enactment or transition swaps shall 

be as follows: 

(a) By the compliance date, the 

reporting counterparty (as defined by 

part 45 of this chapter) for each preenactment or transition swap in 

existence on or after April 25, 2011, for 

which an initial data report is required 

by this part 46, shall obtain a Unique 

Counterparty Identifier, as provided in 

part 45, for itself, and shall include its 

own Unique Counterparty Identifier in 

the initial data report concerning the 

swap. With respect to that Unique 

Counterparty Identifier, the reporting 

counterparty and the swap data 

repository to which the swap is reported 

shall comply thereafter with all unique 

identifier requirements of part 45 

respecting Unique Counterparty 

Identifiers. 

(b) Within 180 days after the 

compliance date, the non-reporting 

counterparty for each pre-enactment or 

transition swap in existence on or after 

April 25, 2011 for which an initial data 

report is required by this part 46, shall 

obtain a Unique Counterparty Identifier, 

as provided in part 45, for itself, and 

shall provide that Unique Counterparty 

Identifier to the reporting counterparty. 

Upon receipt of the non-reporting 

counterparty’s Unique Counterparty 

Identifier, the reporting counterparty 

shall provide that Unique Counterparty 

Identifier to the swap data repository to 

which swap data for the swap was 

reported. Thereafter, with respect to the 

Unique Counterparty Identifier of the 

non-reporting counterparty the 

counterparties to the swap and the swap 

data repository to which it is reported 

shall comply with all requirements of 

part 45 respecting Unique Counterparty 

Identifiers. 

(c) The Unique Counterparty 

Identifier requirements of parts 46 and 

45 of this chapter shall not apply to preenactment or transition swaps expired 

or terminated prior to April 25, 2011. 

(d) The Unique Swap Identifier and 

Unique Product Identifier requirements 

of part 45 of this chapter shall not apply 

to pre-enactment or transition swaps. 

§ 46.5 Determination of which 

counterparty must report. 

(a) Determination of which 

counterparty must report swap data 

concerning each pre-enactment or 

transition swap shall be made as 

follows: 

(1) If only one counterparty is an SD, 

the SD shall fulfill all counterparty 

reporting obligations. 

(2) If neither party is an SD, and only 

one counterparty is an MSP, the MSP 

shall fulfill all counterparty reporting 

obligations. 

(3) For each pre-enactment swap or 

transition swap for which both 

counterparties are SDs, or both 

counterparties are MSPs, or both 

counterparties are non-SD/MSP 

counterparties, the counterparties shall 

agree as one term of their swap 

transaction which counterparty shall 

fulfill reporting obligations with respect 

to that swap; and the counterparty so 

selected shall fulfill all counterparty 

reporting obligations. 

(4) Notwithstanding the provisions of 

paragraphs (a)(1) through (3) of this 

section, if only one counterparty to a 

pre-enactment swap or transition swap 

is a U.S. person, that counterparty shall 

be the reporting counterparty and shall 

fulfill all counterparty reporting 

obligations. 

(5) If a reporting counterparty selected 

pursuant to paragraphs (a)(1) through (4) 

of this section ceases to be a 

counterparty to a swap due to an 

assignment or novation, and the new 

counterparty is a U.S. person, the new 

counterparty shall be the reporting 

counterparty and fulfill all reporting 

counterparty obligations following such 

assignment or novation. If a new 

counterparty to a swap due to an 

assignment or novation is not a U.S. 

person, the counterparty that is a U.S. 

person shall be the reporting 

counterparty and fulfill all reporting 

counterparty obligations following such 

assignment or novation. 

(b) For pre-enactment and transition 

swaps in existence as of the compliance 

date, determination of the reporting 

counterparty shall be made by applying 

the provisions of paragraph (a) of this 

section with respect to the current 

counterparties to the swap as of the 

compliance date, regardless of whether 

either or both were original 

counterparties to the swap when it was 

first executed. 

(c) For pre-enactment and transition 

swaps for which reporting is required, 

but which have expired or been 

terminated prior to the compliance date, 

determination of the reporting 

counterparty shall be made by applying 

the provisions of paragraph (a) of this 

section to the counterparties to the swap 

as of the date of its expiration or 

termination, regardless of whether 

either or both were original 

counterparties to the swap when it was 

first executed. 

§ 46.6 Third-party facilitation of data 

reporting. 

Counterparties required by this part 

46 to report swap data for any preenactment or transition swap, while 

remaining fully responsible for 

reporting as required by this part 46, 

may contract with third-party service 

providers to facilitate reporting. 

§ 46.7 Reporting to a single swap data 

repository. 

All data reported for each preenactment or transition swap pursuant 

to this part 46, and all corrections of 

errors and omissions in previously 

reported data for the swap, by any 

registered entity or counterparty, shall 

be reported to the same swap data 

repository to which the initial data 

report concerning the swap is made (or 

to its successor in the event that it 

ceases to operate, as provided in part 49 

of this chapter). 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
22846 Federal Register / Vol. 76, No. 79 / Monday, April 25, 2011 / Proposed Rules 

§ 46.8 Data reporting for swaps in a swap 

asset class not accepted by any swap data 

repository. 

Should there be a swap asset class for 

which no swap data repository currently 

accepts swap data, each counterparty 

required by this part 46 to report swap 

data with respect to a pre-enactment or 

transition swap in that asset class must 

report that same data at a time and in 

a form and manner determined by the 

Commission. 

§ 46.9 Required data standards. 

In reporting swap data to a swap data 

repository as required by this part 46, 

each reporting counterparty shall use 

the facilities, methods, or data standards 

provided or required by the swap data 

repository to which counterparty reports 

the data. 

§ 46.10 Reporting of errors and omissions 

in previously reported data. 

(a) Each swap counterparty required 

by this part 46 to report swap data shall 

report any errors and omissions in the 

data so reported. Corrections of errors or 

omissions shall be reported as soon as 

technologically practicable after 

discovery of any such error or omission. 

(b) For pre-enactment or transition 

interest rate swaps, currency swaps, or 

other commodity swaps in existence as 

of the compliance date, reporting 

counterparties fulfill the requirement to 

report errors or omissions in state data 

previously reported as part of required 

continuation data reporting by making 

appropriate corrections in their next 

daily report of state data as required by 

this part 46 and part 45 of this chapter. 

(c) Each counterparty to a preenactment or transition swap that is not 

the reporting counterparty as 

determined pursuant to part 45, and that 

discovers any error or omission with 

respect to any swap data reported to a 

swap data repository for that swap, shall 

promptly notify the reporting 

counterparty of each such error or 

omission. Upon receiving such notice, 

the reporting counterparty shall report a 

correction of each such error or 

omission to the swap data repository, as 

provided in § 45.10(a) and (b) of this 

chapter. 

(d) Unless otherwise approved by the 

Commission, or by the Director of 

Market Oversight pursuant to part 45 of 

this chapter, each swap counterparty 

reporting corrections to errors or 

omissions in data previously reported as 

required by this part 46 shall report 

such corrections in the same format as 

it reported the erroneous or omitted 

data. 

Appendix to Part 46—Tables of 

Minimum Primary Economic Terms 

Data for Pre-Enactment and Transition 

Swaps 

MINIMUM PRIMARY ECONOMIC TERMS DATA FOR PRE-ENACTMENT AND TRANSITION CREDIT SWAPS AND EQUITY SWAPS

Sample category Comment 

An indication of the counterparty purchasing protection and of the 

counterparty selling protection.

E.g., option buyer and option seller; buyer and seller. 

Information identifying the reference entity .............................................. The entity that is the subject of the protection being purchased and 

sold in the swap. 

An indication of whether or not both counterparties are swap dealers. 

An indication of whether or not both counterparties are major swap participants. 

An indication of whether or not either counterparty is a swap dealer or 

major swap participant. 

The date and time of trade, expressed using Coordinated Universal 

Time (‘‘CUT’’). 

The venue where the swap was executed. 

The effective date for the swap. 

The expiration date for the swap. 

The price ................................................................................................... E.g., strike, initial price, spread, etc. 

The notional amount, the currency in which the notional amount is expressed, and the equivalent notional amount in U.S. dollars.

The amount and currency or currencies of any up-front payment. 

A description of the payment streams of each counterparty ................... E.g., coupon. 

The title of any master agreement incorporated by reference and the 

date of any such agreement.

E.g., annex, credit agreement. 

If the transaction involved an existing swap, an indication that the 

transaction did not involve an opportunity to negotiate a material 

term of the contract, other than the counterparty.

E.g., assignment. 

The data elements necessary for a person to determine the market 

value of the transaction. 

Whether or not the swap will be cleared by a derivatives clearing organization. 

The name of the derivatives clearing organization that will clear the 

swap, if any. 

If the swap is not cleared, all of the settlement terms, including, without 

limitation, whether the swap is cash-settled or physically settled, and 

the method for determining the settlement value.

Any other primary economic term(s) of the swap matched by the 

counterparties in verifying the swap. 

MINIMUM PRIMARY ECONOMIC TERMS DATA FOR PRE-ENACTMENT AND TRANSITION CURRENCY SWAPS

Sample data field Comments 

1 Contract type ....................................................................................... E.g., swap, swaption, forwards, options, basis swap, index swap, basket swap, other. 

2 Swap transaction date ........................................................................ Date when the swap was entered. 


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Federal Register / Vol. 76, No. 79 / Monday, April 25, 2011 / Proposed Rules 22847 

MINIMUM PRIMARY ECONOMIC TERMS DATA FOR PRE-ENACTMENT AND TRANSITION CURRENCY SWAPS—Continued 

Sample data field Comments 

3 Currency 1 .......................................................................................... International Organization for Standardization Code. 

4 Currency 2 .......................................................................................... International Organization for Standardization Code. 

5 Notional amount 1 ............................................................................... For currency one. 

6 Notional amount 2 ............................................................................... For currency two. 

7 Settlement agent of the reporting counterparty .................................. ID of the settlement agent. 

8 Settlement agent of the non-reporting counterparty ........................... ID of the settlement agent. 

9 Settlement currency ............................................................................ If applicable. 

10 Exchange rate 1 ................................................................................ At the moment of trade/agreement. 

11 Exchange rate 2 ................................................................................ At the moment of trade/agreement, if applicable. 

12 Swap delivery type ............................................................................ Cash or physical. 

13 Expiration date .................................................................................. Expiration date of the contract. 

Any other primary economic term(s) of the swap matched by the 

counterparties in verifying the swap.

MINIMUM PRIMARY ECONOMIC TERMS DATA FOR PRE-ENACTMENT AND TRANSITION INTEREST RATE SWAPS

Sample data field Comment 

1 Contract type ....................................................................................... E.g., swap, swaption, option, basis swap, index swap, etc. 

2 Swap transaction date ........................................................................ Date when the swap was entered. 

3 Swap effective date ............................................................................ Effective date of the contract.

4 Swap end-date .................................................................................... Expiration date of the contract. 

5 Notional amount one ........................................................................... The current active notional in local currency. 

6 Notional currency one ......................................................................... International Organization for Standardization code of the notional currency. 

7 Notional amount two ........................................................................... The second notional amount (e.g., receiver leg). 

8 Notional currency two ......................................................................... International Organization for Standardization code of the notional currency. 

9 Payer (fixed rate) ................................................................................ Is the reporting party a fixed rate payer? Yes/No/Not applicable. 

10 Fixed leg payment frequency ........................................................... How often will the payments on fixed leg be made. 

11 Direction ............................................................................................ For swaps—if the principal is paying or receiving the fixed rate. For 

float-to-float and fixed-to-fixed swaps, it is unspecified. For non-swap 

instruments and swaptions, the instrument that was bought or sold. 

12 Option type ........................................................................................ E.g., put, call, straddle.

13 Fixed rate.

14 Fixed rate day count fraction.

15 Floating rate payment frequency.

16 Floating rate reset frequency.

17 Floating rate index name/rate period.

18 Leg 1 ................................................................................................. If two floating legs, report what is paid. 

19 Leg 2 ................................................................................................. If two floating legs, report what is received. 

Any other primary economic term(s) of the swap matched by the 

counterparties in verifying the swap.

MINIMUM PRIMARY ECONOMIC TERMS DATA FOR PRE-ENACTMENT AND TRANSITION OTHER COMMODITY SWAPS

Sample data field Comment 

1 Contract type ....................................................................................... E.g., swap, swaption, option, etc. 

2 Swap transaction date ........................................................................ Date when the swap was entered. 

3 Quantity ............................................................................................... The unit of measure applicable for the quantity on the swap. 

4 Start date ............................................................................................ Predetermined start date from which payments will be exchanged. 

5 End-date .............................................................................................. Predetermined end date from which payments will be exchanged. 

6 Buyer pay index .................................................................................. The published price as paid by the buyer. 

7 Seller pay index .................................................................................. The published price as paid by the seller. 

8 Buyer ................................................................................................... Party purchasing product, e.g. payer of the fixed price (for swaps), or 

payer of the floating price (for put swaption), or payer of the fixed 

price (for call swaption). 

9 Seller ................................................................................................... Party offering product, e.g. payer of the floating price (for swaps), 

payer of the fixed price (for put swaption), or payer of the floating 

price (for call swaption). 

10 Price .................................................................................................. E.g., fixed price, the heat rate value, etc. 

11 Price unit ........................................................................................... The unit of measure applicable for the price on the transaction. 

12 Grade ................................................................................................ E.g., the grade of oil or refined product being delivered. 

Any other primary economic term(s) of the swap matched by the 

counterparties in verifying the swap.


emcdonald on DSK2BSOYB1PROD with PROPOSALS
22848 Federal Register / Vol. 76, No. 79 / Monday, April 25, 2011 / Proposed Rules 

Issued in Washington, DC, on April 6, 

2011, by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

[FR Doc. 2011–9446 Filed 4–22–11; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF DEFENSE 

Office of the Secretary 

32 CFR Part 83 

[Docket ID DOD–2010–OS–0108] 

RIN 0790–AI63 

Alternative Dispute Resolution (ADR) 

and Conflict Management 

AGENCY: Defense Legal Services Agency, 

DoD. 

ACTION: Proposed rule. 

SUMMARY: This part establishes policy 

and assigns responsibilities. It 

establishes a framework for encouraging 

the expanded use of alternative means 

of dispute resolution and conflict 

management practices as an integral 

part of normal business practices within 

the Department of Defense. 

DATES: Comments must be received by 

June 24, 2011. 

ADDRESSES: You may submit comments, 

identified by docket number and or RIN 

number and title, by any of the 

following methods: 

• Federal Rulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Federal Docket Management 

System Office, 1160 Defense Pentagon, 

Room 3C843, Washington, DC 20301– 

1160. 

Instructions: All submissions received 

must include the agency name and 

docket number or Regulatory 

Information Number (RIN) for this 

Federal Register document. The general 

policy for comments and other 

submissions from members of the public 

is to make these submissions available 

for public viewing on the Internet at 

http://www.regulations.gov as they are 

received without change, including any 

personal identifiers or contact 

information. 

FOR FURTHER INFORMATION CONTACT: 

Christine M. Kopocis, 703–696–1809. 

SUPPLEMENTARY INFORMATION: 

Regulatory Procedures 

Executive Order 12866, ‘‘Regulatory 

Planning and Review’’ and Executive 

Order 13563, ‘‘Improving Regulation 

and Regulatory Review’’ 

It has been certified that 32 CFR part 

83 does not: 

(1) Have an annual effect on the 

economy of $100 million or more or 

adversely affect in a material way the 

economy; a section of the economy; 

productivity; competition; jobs; the 

environment; public health or safety; or 

State, local, or tribal governments or 

communities; 

(2) Create a serious inconsistency or 

otherwise interfere with an action taken 

or planned by another Agency; 

(3) Materially alter the budgetary 

impact of entitlements, grants, user fees, 

or loan programs, or the rights and 

obligations of recipients thereof; or 

(4) Raise novel legal or policy issues 

arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in these Executive Orders. 

Sec. 202, Public Law 104–4, ‘‘Unfunded 

Mandates Reform Act’’ 

It has been certified that 32 CFR part 

83 does not contain a Federal mandate 

that may result in expenditure by State, 

local and tribal governments, in 

aggregate, or by the private sector, of 

$100 million or more in any one year. 

Public Law 96–354, ‘‘Regulatory 

Flexibility Act’’ (5 U.S.C. 601) 

It has been certified that 32 CFR part 

83 is not subject to the Regulatory 

Flexibility Act (5 U.S.C. 601) because it 

[would or would not], if promulgated, 

have a significant economic impact on 

a substantial number of small entities. 

Public Law 96–511, ‘‘Paperwork 

Reduction Act’’ (44 U.S.C. Chapter 35) 

It has been certified that 32 CFR part 

83 does not impose reporting or 

recordkeeping requirements under the 

Paperwork Reduction Act of 1995. 

Executive Order 13132, ‘‘Federalism’’ 

It has been certified that 32 CFR part 

83 does not have federalism 

implications, as set forth in Executive 

Order 13132. This rule does not have 

substantial direct effects on: 

(1) The States; 

(2) The relationship between the 

National Government and the States; or 

(3) The distribution of power and 

responsibilities among the various 

levels of Government. 

List of Subjects in 32 CFR Part 83 

Personnel, Dispute resolution. 

Accordingly, 32 CFR Part 83 is 

proposed to be added to read as follows: 

PART 83—ALTERNATIVE DISPUTE 

RESOLUTION (ADR) AND CONFLICT 

MANAGEMENT 

Sec. 

83.1 Purpose. 

83.2 Applicability. 

83.3 Definitions. 

83.4 Policy. 

83.5 Responsibilities. 

Authority: 5 U.S.C. 571–584; Executive 

Order 12988. 

§ 83.1 Purpose. 

This part: 

(a) Establishes policy pursuant to title 

5, United States Code (U.S.C.) 571–584 

and Executive Order 12988. 

(b) Assigns responsibilities, and 

(c) Establishes a framework for 

encouraging the expanded use of 

alternative means of dispute resolution 

and conflict management practices as an 

integral part of normal business 

practices within the Department of 

Defense. 

§ 83.2 Applicability. 

This part applies to the Office of the 

Secretary of Defense, the Military 

Departments, the Office of the Chairman 

of the Joint Chiefs of Staff and the Joint 

Staff, the Combatant Commands, the 

Office of the Inspector General of the 

Department of Defense, the Defense 

Agencies, the DoD Field Activities, and 

all other organizational entities within 

the Department of Defense (hereafter 

referred to collectively as the ‘‘DoD 

Components’’). 

§ 83.3 Definitions. 

These terms and their definitions are 

for the purpose of this part. 

Alternative dispute resolution (ADR). 

Any procedure that is used to resolve 

issues in controversy, including, but not 

limited to, conciliation, facilitation, 

mediation, fact finding, mini-trials, 

arbitration, and use of ombuds, or any 

combination thereof. 

ADR coordinating committee. The 

group consisting of the dispute 

resolution specialists designated under 

title 5 U.S.C. 571–584 or their 

representatives from the DoD 

Components and other officials 

appointed by the Deputy General 

Counsel (Legal Counsel) (DGC(LC)). The 

purpose of the ADR Coordinating 

Committee is to promote among the DoD 

Components the exchange of 

information on ADR and conflict 

management design and 

implementation. 

Conflict management. A systemic 

process used to proactively identify and 

manage, at the earliest stage possible, 

conflict that can lead to one or more 

disputes, for the purpose of reducing the 


emcdonald on DSK2BSOYB1PROD with PROPOSALS