78892 Federal Register / Vol. 75, No. 242 / Friday, December 17, 2010 / Rules and Regulations 

1 17 CFR 145.9. 

2See Dodd-Frank Wall Street Reform and 

Consumer Protection Act, Public Law 111–203, 124 

Stat. 1376 (2010), hereinafter cited as ‘‘Dodd-Frank 

Act.’’ 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. 

5The term ‘‘swap data repository’’ is defined in 

Section 1a(48) of the CEA to mean ‘‘any person that 

collects and maintains information or records with 

respect to transactions or positions in, or the terms 

and conductions of, swaps entered into by third 

parties for the purpose of providing a centralized 

recordkeeping facility for swaps.’’ 

Dated: December 13, 2010. 

Kevin J. Wolf, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2010–31653 Filed 12–16–10; 8:45 am] 

BILLING CODE 3510–33–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 44 

RIN 3038–AD29 

Reporting Certain Post-Enactment 

Swap Transactions 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Interim final rule; request for 

comment. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘Commission’’ or 

‘‘CFTC’’) is publishing for comment an 

interim final rule to implement new 

statutory provisions introduced by Title 

VII of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act 

(‘‘Dodd-Frank Act’’). Section 723 of the 

Dodd-Frank Act amends Section 2 of the 

Commodity Exchange Act (‘‘CEA’’ or the 

‘‘Act’’) by adding new Section 2(h)(5)(B), 

which directs that rules adopted by the 

Commission under this section shall 

provide for the reporting of ‘‘transition’’ 

swaps—that is, swaps entered into on or 

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

of swap data reporting rules to 

implement Section 2(h)(5)(B)—to a 

registered swap data repository (‘‘SDR’’) 

or to the Commission. Each category of 

data is subject to a reporting timetable 

specified in Section 2(h)(5). The 

Commission intends shortly to notice 

for comment substantive rules 

implementing the swap data reporting 

provisions of Section 2(h)(5)(B). In order 

to ensure the preservation of data 

pending implementation of such rules, 

the Commission is today adopting an 

interim final rule directing specified 

counterparties to post-enactment, or 

transition, swap transactions entered 

into prior to the effective date of the 

swap data reporting and recordkeeping 

rules implementing Section 2(h)(5)(B) of 

the CEA to retain information pertaining 

to the terms of such swaps. 

DATES: This interim final rule is 

effective December 17, 2010. Comments 

on all aspects of the interim final rule 

must be received on or before January 

18, 2011. 

ADDRESSES: You may submit comments, 

identified by RIN number 3038–AD29, 

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: Address to 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. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

All comments must be submitted in 

English or, if not, 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 is exempt from disclosure under the 

Freedom of Information Act, a petition 

for confidential treatment of the exempt 

information may be submitted according 

to the procedures established in § 145.9 

of the Commission’s Regulations.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: 

Susan Nathan, Senior Special Counsel, 

Division of Market Oversight, 

Commodity Futures Trading 

Commission, 1155 21st Street, NW., 

Washington, DC 20581, at (202) 418– 

5133. 

SUPPLEMENTARY INFORMATION: The 

Commission is adopting an interim final 

rule under part 44 of its regulations 

under the Commodity Exchange Act and 

is soliciting comments on all aspects of 

the rule. The Commission will carefully 

consider all comments received and will 

address them, as applicable, in 

connection with the permanent 

reporting rules to be adopted under the 

Dodd-Frank Act. 

I. Background 

On July 21, 2010, President Obama 

signed into law the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (‘‘Dodd-Frank Act’’).2 Title VII of the 

Dodd-Frank Act 3 amended the 

Commodity Exchange Act (‘‘CEA’’ or the 

‘‘Act’’) 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 

derivative 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. 

Among other things, the Dodd-Frank 

Act requires that swaps be reported to 

a registered SDR 5 or to the Commission 

if there is no registered SDR that would 

accept the swap. Section 723 of the 

Dodd-Frank Act adds to the CEA new 

Section 2(h)(5)(B), to require that 

transition swaps be reported to a 

registered SDR or the Commission 

according to specified timetables. As 

described below, pursuant to its 

authority under Sections 4r and 

2(h)(5)(A) of the CEA the Commission 

previously has adopted an interim final 

rule addressing the reporting timetable 

for swaps entered into prior to the 

enactment of the Dodd-Frank Act the 

terms of which had not expired by that 

date. 

Separately, Section 729 of the DoddFrank Act established in new Section 

4r(a)(2)(A) a transition rule applicable to 

pre-enactment swaps, providing for the 

reporting, by a date certain, of each 

swap entered into before the date of 

enactment of the Dodd-Frank Act, the 


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6The statute provides that reporting must occur 

either (i) 30 days after issuance of the interim final 

rule; or (ii) such other date as the Commission 

determines to be appropriate. 

7See Interim Final Rule for Reporting PreEnactment Swap Transactions, 75 FR 63080, Oct. 

14, 2010. 

8The term ‘‘transition swap’’ refers to a swap 

executed on or after the date of enactment of the 

Dodd-Frank Act and before the effective date of the 

swap data reporting and recordkeeping rules 

implementing Section 2(h)(5)(B) of the CEA. As 

discussed infra., Sections 2(h)(5)(A) and 4r describe 

as a separate category of swaps those executed prior 

to the enactment of the Dodd-Frank Act, the terms 

of which had not expired by that date (‘‘preenactment swaps’’). 

9See Notice of Proposed Rulemaking Relating to 

Swap Data Recordkeeping and Reporting 

Requirements n. 10, approved for publication by the 

Commission at an open meeting on November 19, 

2010 and expected to be published shortly in the 

Federal Register (to be codified at 17 CFR part 45). 

Rules adopted by the Commission under this 

section shall provide for the reporting of swap data 

as follows: 

(A) Swaps entered into on or 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. 

(B) Swaps entered into on or after such date of 

enactment shall be reported to a registered swap 

data repository or the Commission no later than the 

later of— 

(i) 90 days after such effective date; or 

(ii) Such other time after entering into the swap 

as the Commission may prescribe by rule or 

regulation. 

10The reporting obligations of specified 

counterparties are delineated in Section 4r(a)(3) of 

the CEA, as amended. Unlike certain other 

provisions of Section 4r, these obligations are not 

limited to pre-enactment swaps. 

11The term ‘‘transition swap’’ is defined in 

§ 44.00(c) of the Commission’s Regulations to mean 

‘‘any swap entered into after the enactment of the 

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

to the effective date of the swap data reporting and 

recordkeeping rules implemented pursuant to 

Section 2(h)(5)(B)’’ of the CEA. 

12As relevant here, the effective date is 360 days 

after the enactment of the Dodd-Frank Act—July 15, 

2011. 

13Lincoln, ‘‘Wall Street Transparency and 

Accountability,’’ Congressional Record (July 15, 

2010) at S5923. 

terms of which had not expired as of 

that date.6 Section 4r(a)(2)(B) directs 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 each swap 

entered into before the date of 

enactment. On October 14, 2010, the 

Commission 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 

the 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 can be 

effectuated under permanent rules. The 

reporting requirements established by 

Section 4r and §§ 44.00–44.02 of the 

Commission’s Regulations will 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.7

Section 4r did not mandate an interim 

final rulemaking addressing reporting 

provisions for transition swap 

transactions entered into on or after the 

date of enactment of the Dodd-Frank 

Act and prior to the effective date of the 

swap data reporting rule to implement 

the provisions of Section 2(h)(5)(B). The 

instant interim final rule is intended to 

provide clarity and guidance with 

respect to such swaps by (i) establishing 

that transition swaps 8 be subject to 

Section 2(h)(5)(B)’s reporting 

requirements and to Commission 

regulations to be promulgated 

thereunder; and (ii) advising potential 

counterparties to such swaps that 

implicit in this reporting requirement is 

the need to retain relevant data. 

The Commission intends to establish 

permanent data recordkeeping and 

reporting requirements for transition 

swaps in a separate rulemaking under 

Section 2(h)(5)(B) of the CEA.9 The 

Commission anticipates that its 

rulemaking for transition swaps will 

address specifically the records, 

information and data regarding 

transition swaps that must be retained 

and the timeframe for reporting such 

information to a registered SDR or to the 

Commission. 

II. The Scope of the Interim Final Rule 

This interim final rule will apply to 

all swaps entered into on or after the 

date of enactment of the Dodd-Frank 

Act and before the effective date of the 

swap data reporting and recordkeeping 

rules implementing Section 2(h)(5)(B) of 

the CEA. 

1. Reporting Obligations 

The Commission expects that the 

reporting obligations outlined in § 44.03 

will implicate swap transaction 

information and data that counterparties 

normally retain as sound business 

practice. Interim § 44.03 establishes that 

reporting requirements are applicable to 

transition swaps and describes the 

information that would be reported to a 

registered SDR or to the Commission 

with respect to such transaction: (i) A 

copy of the transaction confirmation in 

electronic form, if available, or in 

written form if there is no electronic 

copy; (ii) if available, the time the 

transaction was executed; and (iii) 

additional information of the character 

described in Section 4 (‘‘Record 

Preservation’’) below. 

In addition, Interim § 44.03 provides 

that a designated counterparty 10 to a 

transition swap 11 must provide to the 

Commission on request any information 

relating to such transaction during the 

time that this interim final rule is in 

effect. The Commission expects that 

such information would vary depending 

upon the needs of the Commission and 

may include actual as well as summary 

trade data. Such summary data may 

include a description of a swap dealer’s 

counterparties or the total number of 

post-enactment pre-effective swap 

transactions entered into by the dealer 

and some measure of the frequency and 

duration of those contracts. The 

Commission believes that this 

requirement will facilitate its ability to 

understand and evaluate the current 

market for swaps and may inform its 

analysis of other required rulemakings 

under the Dodd-Frank Act. 

2. Reporting Party 

Section 4r(a)(3) of the CEA specifies 

the party obligated to report a particular 

swap transaction. Specifically, this 

section provides, with respect to a swap 

in which only one counterparty is a 

swap dealer or major swap participant, 

that entity must report the swap. With 

respect to a swap in which one 

counterparty is a swap dealer and the 

other counterparty is a major swap 

participant, the swap dealer is 

responsible for reporting the swap. With 

respect to any other swap, the 

counterparties shall select one of them 

to report the swap. Interim § 44.03 

incorporates these provisions. 

3. Effective Date for Reporting 

Transition Swaps 

Section 2(h)(5)(B) of the CEA requires 

that rules adopted by the Commission 

shall provide for the reporting of data 

for transition swaps no later than the 

later of 90 days after the effective date 

of the Dodd-Frank Act 12 or such other 

time after entering into the swap as the 

Commission may prescribe. Section 

4r(a)(2)(C) establishes that the reporting 

obligations described in Section 4r shall 

be effective on the enactment of that 

section—July 21, 2010. In a July 15, 

2010 floor statement, Senator Lincoln 

addressed inconsistencies between 

Sections 4r and 2(h)(5), emphasizing 

that the provisions of these two sections 

‘‘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.’’ 13 Accordingly, 


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14 5 U.S.C. 553. 

15 5 U.S.C. 553(b). 

16 Id. 

17 5 U.S.C. 553(d). 

18 75 FR 63080 (Oct. 14, 2010). 

19 Id. at 63084. 

Section 4r(a)(2)(C) should be read to 

require that the reporting obligations of 

Section 2(h)(5)(B) became effective on 

enactment of the Dodd-Frank Act and 

that counterparties who are or may 

become subject to this obligation 

should, as of that date, be prepared to 

report swap data relating to postenactment pre-effective swaps at such 

time as reporting is required: the later of 

90 days after July 15, 2011 or such other 

time after entering into the swap as the 

Commission may prescribed by rule. 

The Commission believes that this 

result achieves Senator Lincoln’s goal of 

assuring consistency between the 

legislative provisions embodied in 

Sections 4r and 2(h)(5). 

4. Record Preservation 

While neither Section 4r nor Section 

2(h)(5) expressly requires that 

counterparties retain data related to 

transition swaps, implicit in the 

reporting requirements established by 

these provisions is the necessity for 

counterparties to these transactions to 

retain information and data related to 

the terms of each transaction so that it 

may subsequently be reported. In this 

regard, § 44.03 includes a Note to 

paragraphs (a)(1) and (a)(2) advising 

potential counterparties to a postenactment pre-effective swap 

transaction to retain all information and 

documents relating to the terms of the 

transaction, to the extent and in such 

form as they presently exist. The 

Commission expects that counterparties 

to existing swaps routinely retain, 

consistent with reasonable business 

practice, information including but not 

limited to: (i) Any information 

necessary to identify and value the 

transaction (e.g., underlying asset and 

tenor); (ii) the date and time of 

execution of the transaction; (iii) 

volume (e.g., notional or principal 

amount); (iv) information relevant to the 

price and payment of the transaction 

until the swap is terminated, reaches 

maturity, or is novated; (v) whether the 

transaction was accepted for clearing by 

any clearing agency or derivatives 

clearing organization, and if so, the 

identity of such agency or organization; 

(vi) any modification(s) to the terms of 

the transaction; and (vii) the final 

confirmation of the transaction. 

The Commission believes that 

counterparties that may be required to 

report transition swap transactions 

should preserve such information in 

order to ensure that they will be able to 

comply with the reporting requirements 

of Interim § 44.03 as well as with 

permanent reporting rules to be 

promulgated under CEA Section 2(h)(5). 

The Commission is mindful that the 

data retention requirement may be 

perceived as burdensome, and in that 

regard the Note attempts to limit the 

data to material information that may be 

expected to assist the Commission in 

performing its oversight functions under 

the CEA. In addition, to ensure that 

important information relating to the 

terms of such swaps may be retained 

with minimal burden on the 

counterparties, the Note does not 

require any counterparty to a transition 

swap transaction to create new records, 

and permits records to be retained in 

their existing format. Similarly, the 

Commission recognizes that information 

that the counterparty does not have 

prior to the effective date of the interim 

final rule cannot be reported. 

III. Request for Comments 

The Commission requests comments 

on the questions outlined below: 

1. Should the date on which data 

concerning transition swaps is required 

to be reported to a registered swap data 

repository or to the Commission be 

more than 90 days following the July 15, 

2011 effective date of the Dodd-Frank 

Act? If so, what date(s) should the 

Commission consider and why? 

2. Should the date for such reporting 

be different for reporting counterparties 

who are swap dealers or major swap 

participants than it is for reporting 

counterparties who are not swap dealers 

or major swap participants? 

3. What information should be 

reported with respect to transition 

swaps? Who would use this 

information, and for what purpose(s)? 

4. Should data reporting for transition 

swaps be asset-class specific? 

5. What methods of data accuracy 

verification should be used for 

transition swap data? 

6. Should the Commission’s 

permanent rules concerning data 

reporting for transition swaps between 

counterparties who are not swap dealers 

or swap participants specify how such 

counterparties should determine which 

counterparty will report the swap data? 

If so, what factors should govern this 

choice? 

7. The Note to the interim final rule 

advises that counterparties retain, in 

their existing format, all information 

and documents relating to the terms of 

the transition swap, including but not 

limited to certain data elements. What 

documents and data typically are kept 

by swap market participants to 

memorialize their transactions? In what 

format? How long are such records 

currently maintained by market 

participants? 

8. What additional records should be 

kept, if any, and what burdens or costs 

would the retention of such information 

entail? 

In addition to the specific requests for 

comment above, the Commission 

welcomes comment on all aspects of the 

interim final rule and invites interested 

persons to submit written presentations 

of views, data and arguments on all 

aspects of the interim final rule. 

IV. Related Matters 

A. Administrative Procedure Act 

The Administrative Procedure Act 14

(‘‘APA’’) generally requires an agency to 

publish notice of a proposed rulemaking 

in the Federal Register.15 This 

requirement does not apply, however, 

when the agency ‘‘for good cause finds 

* * * that notice and public procedure 

are impracticable, unnecessary, or 

contrary to the public interest.’’ 16

Moreover, while the APA requires 

generally that an agency publish an 

adopted rule in the Federal Register 30 

days before it becomes effective, this 

requirement does not apply if the 

agency finds good cause to make the 

rule effective sooner.17

By way of background, Section 729 of 

the Dodd-Frank Act amended the CEA 

to add new Section 4r, which in turn 

requires the Commission to adopt, 

within 90 days of enactment of the 

Dodd-Frank Act, an interim final rule 

providing for the reporting of swaps 

entered into before the date of 

enactment of the Dodd-Frank Act the 

terms of which had not expired as of 

that date. In response to that mandate, 

the Commission adopted in new part 44 

of the CEA an interim final rule whose 

purpose was to establish reporting 

requirements for pre-enactment 

unexpired swaps and to serve as notice 

to potential reporting entities of a 

subsequent requirement to report 

certain data 18 associated with such 

swaps. This interim rule provides notice 

to counterparties to preserve data 

associated with transition swaps until 

the Commission issues permanent 

reporting and recordkeeping rules for all 

swaps pursuant to CEA Section 

2(h)(5).19

The Commission is mindful that the 

Dodd-Frank Act did not mandate an 

interim final rule relating to transition 

swaps (those entered into after the date 

of enactment of the Act and prior to its 

effective date), although such swaps 

will in the future be subject to a 

permanent reporting requirement 


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20 44 U.S.C. 3501 et.seq. 

21 44 U.S.C. 3501 et seq. 

pursuant to new Section 2(h)(5)(B) of 

the CEA. The Commission believes that 

these circumstances similarly warrant 

notice to potential counterparties of a 

present obligation to retain data relating 

to such swaps until the Commission 

issues permanent rules pursuant to 

Section 2(h)(5)(B). Moreover, the 

Commission believes that issuance of 

such a rule as an interim final rule 

serves the public interest. The 

availability of this data will facilitate the 

Commission’s ability to understand and 

evaluate the current market for swaps 

and may inform its analysis of other 

required rulemaking under the DoddFrank Act; any delay in adopting such 

rules likely will result in a substantial 

loss of significant swap data. 

Accordingly, the Commission believes 

that good cause exists under 5 U.S.C. 

553(b) and (d) because delay in 

clarifying the potential scope of Section 

2(h)(5)’s reporting and record 

preservation obligations likely will 

result in a substantial loss of material 

data relating transition swaps that 

would assist the Commission in 

performing its oversight and analytic 

functions under the CEA. 

B. Paperwork Reduction Act 

The Paperwork Reduction Act 

(‘‘PRA’’) provides that an agency may 

not conduct or sponsor, and a person is 

not required to respond to, a collection 

of information unless it displays a 

currently valid control number from the 

Office of Management and Budget 

(‘‘OMB’’).20 OMB has not yet assigned a 

control number to the new collection. 

As described below, the Interim Final 

Rule will result in new collection of 

information requirements within the 

meaning of the PRA. 

1. Reporting Requirements 

The Commission has determined that 

this interim final rulemaking will not 

impose on swap counterparties any new 

reporting requirements that would be 

collections of information requiring the 

approval of the Office of Management 

and Budget (‘‘OMB’’) under the 

Paperwork Reduction Act (‘‘PRA’’).21

The Commission intends to propose 

permanent reporting requirements 

associated with Section 723 of the 

Dodd-Frank Act, at which time the 

Commission will issue a notice of 

proposed rulemaking, seek comments 

on the proposed reporting requirements, 

and seek OMB approval for the 

collections of information as provided 

by 5 CFR 1320.8 and 1320.11. 

2. Recordkeeping Requirements 

In order to comply with the reporting 

requirements contained in § 44.03, and 

in anticipation of permanent 

recordkeeping and reporting 

requirements to be adopted by the 

Commission pursuant to Section 

2(h)(5)(B) of the CEA, each potential 

counterparty to a transition swap that 

may be required to report such 

transaction should retain information 

relating to the terms of the swap 

transaction. The Commission believes 

that this recordkeeping element, while 

not explicit, is considered to be a 

collection of information within the 

meaning of the PRA. 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 

‘‘Regulation 44.03—Interim Final Rule 

for Reporting Certain Post-Enactment 

Swap Transactions. OMB control 

number 3038–NEW.’’ 

The Commission will, by separate 

action, publish in the Federal Register 

a notice and request for comment on the 

paperwork burden associated with the 

recordkeeping element of this interim 

final rule in accordance with 5 CFR 

1320.8. If approved, this new collection 

of information will be mandatory. 

C. Cost-Benefit Analysis 

Section 15(a) of the CEA requires the 

Commission to consider the costs and 

benefits of its action before issuing a 

new regulation or order under the Act. 

By its terms, Section 15(a) does not 

require the Commission to quantify the 

costs and benefits of its action or to 

determine whether the benefits of the 

action outweigh its costs. Rather, 

Section 15(a) requires the Commission 

simply to ‘‘consider the costs and 

benefits’’ of the subject rule or order. 

Section 15(a) further specifies that the 

costs and benefits of Commission 

regulations shall be evaluated in light of 

five broad areas of market and public 

concern: (1) Protection of market 

participants and the public; (2) 

efficiency, competitiveness, and 

financial integrity of the market for 

listed derivatives; (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 of 

concern and may, in its discretion, 

determine that notwithstanding its 

costs, a particular regulation is 

necessary or appropriate to protect the 

public interest or to effectuate any of the 

provisions or accomplish any of the 

purposes of the CEA. 

Title VII of the Dodd-Frank Act 

requires the Commission to undertake a 

number of rulemakings to implement 

the regulatory framework for swaps 

dictated by that Act, including the 

reporting of swap transactions. This 

interim final rule implements the DoddFrank Act by providing clarity and 

guidance with respect to the reporting of 

transition swaps by (i) establishing that 

transition swaps will be subject to 

Section 2(h)(5)(B)’s reporting 

requirements and to Commission 

regulations to be promulgated 

thereunder; and (ii) advising potential 

counterparties to such transition swaps 

that implicit in this reporting 

requirement is the present obligation to 

retain data for reporting at a time to be 

determined by rules promulgated under 

Section 2(h)(5)(B). This interim final 

rule will enable the Commission to 

obtain data on transition swaps and will 

also ensure the preservation of such 

data until permanent recordkeeping and 

reporting rules are issued by the 

Commission. The availability of data 

relating to transition swaps will enable 

the Commission to gain a better 

understanding of the swap market— 

including the size and scope of that 

market. This understanding ultimately 

will lead to a more robust and 

transparent environment for the swaps 

market. Further, the Commission 

expects this rule to make available 

information that could inform the 

Commission’s decision-making with 

respect to the rules it is required to 

implement under the Dodd-Frank Act. 

The Note to Interim § 44.03(a)(1) and 

(2) addresses the retention of records 

relating to transition swaps. Although 

there are recordkeeping costs associated 

with retention of existing swap 

transaction information, the 

Commission has crafted the Interim 

Final Rule to be efficient in terms of 

these costs. The Interim Rule does not 

require market participants to modify 

data for retention purposes, and the 

information that is to be reported should 

be information that is already kept by 

swap counterparties in their normal 

course of business—and it may be 

reported in the format in which it is 

kept. Moreover, counterparties must 

report the time of execution only to the 

extent such information is available. 

The recordkeeping and reporting rules 

that the Commission is required to 

adopt under new CEA Section 2(h)(5)(B) 

will apply to transition swaps. 

Accordingly, in adopting this Interim 

Rule the Commission has sought to limit 

the burden on market participants by 


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22 5 U.S.C. 601(2). 

23 5 U.S.C. 553(b). 

not imposing substantial or potentially 

conflicting reporting requirements. 

D. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(‘‘RFA’’), 5 U.S.C. 601 et seq., requires 

federal agencies, in promulgating rules, 

to consider the impact of those rules on 

small entities. The term ‘‘rule’’ under the 

RFA is defined as ‘‘any rule for which 

the agency publishes a general notice of 

proposed rulemaking pursuant to 

Section 553(b) of this title, or any other 

law * * *.’’ 22 However, a general notice 

of proposed rulemaking under Section 

553(b) does not apply ‘‘when the agency 

for good cause finds (and incorporates 

the finding and a brief statement of 

reasons therefor) in the rules [issued] 

that notice and public procedure 

thereon are impracticable, unnecessary 

or contrary to the public interest.’’ 23 As 

noted above, the Commission believes 

that good cause exists under 5 U.S.C. 

553(b) because delay in clarifying the 

scope of 2(h)(5)’s reporting and record 

preservation obligations will likely 

result in a substantial loss of material 

data relating to post-enactment preeffective swaps that would assist the 

Commission in performing its oversight 

functions under the CEA. 

List of Subjects in 17 CFR Part 44 

Swap markets, Counterparties, 

Reporting and Recordkeeping 

requirements. 

■ In consideration of the foregoing, and 

pursuant to the authority in the 

Commodity Exchange Act, as amended, 

and in particular Sections 2(h)(5), 4r(a) 

and 12a(5), the Commission hereby 

proposes to amend Chapter 1 of Title 17 

of the Code of Federal Regulations by 

amending part 44 as follows: 

PART 44—INTERIM FINAL RULE FOR 

PRE–ENACTMENT SWAP 

TRANSACTIONS 

Authority and Issuance 

■ 1. The authority citation for part 44 

shall continue to read as follows: 

Authority: 7 U.S.C. 2(h)(5), 4r and 12a(5), 

as amended by Title VII of the Wall Street 

Reform and Consumer Protection Act (DoddFrank Act of 2010), Pub. L. 111–203, 124 

Stat. 1376 (2010). 

■ 2. Section 44.00 is amended by 

redesignating paragraphs (c) through (e) 

as paragraphs (d) through (f) and by 

revising paragraph (c) to read as follows: 

§ 44.00 Definition of terms used in Part 44 

of this chapter. 

* * * * * 

(c) Transition swap means any swap 

entered into after the enactment of the 

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

and prior to the effective date of the 

swap data reporting and recordkeeping 

rule implemented under Section 

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

* * * * * 

■ 3. Section 44.03 is added to read as 

follows: 

§ 44.03 Reporting transition swaps to a 

swap data repository or to the Commission. 

(a) A counterparty to a post-enactment 

pre-effective swap transaction shall: 

(1) As required by the reporting rules 

required to be adopted pursuant to 

Section 2(h)(5)(B) of the Commodity 

Exchange Act, report data related to a 

transition swap to a registered swap 

data repository or the Commission by 

the compliance date established in such 

reporting rules or within 60 days after 

an appropriate swap data repository 

becomes registered with the 

Commission and commences operations 

to receive and maintain data related to 

such swap, whichever occurs first, the 

following information with respect to 

the swap transaction: 

(i) A copy of the transaction 

confirmation, in electronic form if 

available, or in written form if there is 

no electronic copy; 

(ii) The time, if available, that the 

transaction was executed; and 

(2) Report to the Commission on 

request, in the form and manner 

prescribed by the Commission, any 

information relating to the swap 

transaction. 

Note to Paragraphs (a). In order to comply 

with the reporting requirements contained in 

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

each counterparty to a post-enactment preeffective swap transaction that may be 

required to report such transaction should 

retain, in its existing format, all information 

and documents, to the extent and in such 

form as they exist on the effective date of this 

section, relating to: the terms of a swap 

transaction, including but not limited to any 

information necessary to identify and value 

the transaction (e.g., underlying asset and 

tenor); the date and time of execution of the 

transaction; volume (e.g., notional or 

principal amount); information relevant to 

the price and payment for the transaction 

until the swap is terminated, reaches 

maturity or is novated; whether the 

transaction was accepted for clearing and, if 

so, the identity of such clearing organization; 

any modification(s) to the terms of the 

transaction; and the final confirmation of the 

transaction. 

(b) Reporting party. The 

counterparties to a swap transaction 

shall report the information required 

under paragraph (a) of this section as 

follows: 

(1) Where only one counterparty to a 

swap transaction is a swap dealer or a 

major swap participant, the swap dealer 

or major swap participant shall report 

the transaction; 

(2) Where one counterparty to a swap 

transaction is a swap dealer and the 

other counterparty is a major swap 

participant, the swap dealer shall report 

the transaction; and 

(3) Where neither counterparty to a 

swap transaction is a swap dealer or a 

major swap participant, the 

counterparties to the transaction shall 

select the counterparty who will report 

the transaction. 

Issued in Washington, DC, on December 9, 

2010, by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

Appendices to Interim Final Rule for 

Reporting Certain Post-Enactment 

Swap Transactions—Commission 

Voting Summary and Statements of 

Commissioners 

Note: The following appendices will not 

appear in the Code of Federal Regulations. 

Appendix 1—Commission Voting 

Summary 

On this matter, Chairman Gensler and 

Commissioners Dunn, Sommers, 

Chilton and O’Malia voted in the 

affirmative; no Commissioner voted in 

the negative. 

Appendix 2—Statement of Chairman 

Gary Gensler 

I support the interim final rulemaking 

regarding the reporting timetable for 

swaps entered into after the date of 

enactment of the Dodd-Frank Act but 

prior to the effective date of swap data 

reporting rules, or ‘‘transition’’ swaps. 

The interim final rule is intended to 

ensure that data and information related 

those transition swaps will be preserved 

until reporting to swap data repositories 

or regulators can occur. The rule is 

indeed to prevent a substantial loss of 

data on transition swaps and to assist 

the Commission in performing its 

oversight functions under the 

Commodity Exchange Act. 

[FR Doc. 2010–31579 Filed 12–16–10; 8:45 am] 

BILLING CODE 6351–01–P 


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