63080 Federal Register / Vol. 75, No. 198 / Thursday, October 14, 2010 / Rules and Regulations 

1The term ‘‘swap data repository’’ is defined in 

Section 1a(48) of the Commodity Exchange Act 

(‘‘CEA’’ or the ‘‘Act’’) to mean ‘‘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.’’ 

educational settings, such as schools, 

summer camps, or child care facilities, 

this type of a distribution strategy 

would not necessarily convert a general 

use product into a children’s product. 

However, if the product is packaged in 

such a manner that either expressly 

states or implies with graphics, themes, 

labeling, or instructions that the product 

is designed or intended primarily for 

children 12 years of age or younger, 

then it may be considered a children’s 

product if the required consideration of 

all four statutory factors supports that 

determination. The requirements of the 

Labeling of Hazardous Art Materials Act 

are similar to the labeling requirements 

of the FHSA, of which it is a part. 

Therefore, third party testing to LHAMA 

is not required. An art material designed 

or intended primarily for children 12 

years of age or younger would have to 

be tested by a third party laboratory to 

demonstrate compliance with CPSIA, 

but it would not require third party 

testing and certification to the LHAMA 

requirements. For the same reasons, no 

general conformity certificate is 

required for general use art materials. 

(6) Books—The content of a book can 

determine its intended audience. 

Children’s books have themes, 

vocabularies, illustrations, and covers 

that match the interests and cognitive 

capabilities of children 12 years of age 

or younger. The age guidelines provided 

by librarians, education professionals, 

and publishers may be dispositive for 

determining the intended audience. 

Some children’s books have a wide 

appeal to the general public, and in 

those instances, further analysis may be 

necessary to assess who the primary 

intended audience is based on 

consideration of relevant additional 

factors, such as product design, 

packaging, marketing, and sales data. 

(7) Science Equipment—Microscopes, 

telescopes, and other scientific 

equipment that would be used by an 

adult, as well as a child, are considered 

general use products. Equipment that is 

intended by the manufacturer for use 

primarily by adults, although there may 

be use by children through such 

programs, is a general use product. Toy 

versions of such items are considered 

children’s products. If a distributor or 

retailer sells or rents a general use 

product in bulk through distribution 

channels that target children 12 years of 

age or younger in educational settings, 

such as schools or summer camps, this 

type of a distribution strategy would not 

necessarily convert a general use 

product into a children’s product. 

However, if the product is packaged in 

such a manner that either expressly 

states or implies with graphics, themes, 

labeling, or instructions that the product 

is designed or intended primarily for 

children 12 years of age or younger, 

then it may be considered a children’s 

product if the required consideration of 

all four statutory factors supports that 

determination. Products mainly 

intended for use by the instructor would 

not be considered children’s products. 

In general, scientific equipment that is 

specifically sized for children, such as 

protective gear, eyewear, gloves, or 

aprons and/or has childish themes or 

decorations and invites use by a child 

12 years of age or younger or is 

marketed to appeal primarily to 

children is considered a children’s 

product. 

(8) Sporting Goods and Recreational 

Equipment—Sporting goods that are 

intended primarily for consumers older 

than 12 years of age are considered 

general use items. Sporting equipment, 

sized for adults, are general use items 

even though some children 12 years of 

age or younger will use them. Unless 

such items are specifically marketed to 

children 12 years of age or younger, or 

have extra features that make them more 

suitable for children 12 years of age or 

younger than for adults, they would be 

considered general use products. If 

children 12 years or younger would 

mainly use the product because it 

would be too small or inappropriate for 

older children to use, then it likely 

would be considered a children’s 

product. Likewise, recreational 

equipment, such as roller blades, 

skateboards, bicycles, camping gear, and 

fitness equipment are considered 

general use products unless they are 

sized to fit children 12 years of age or 

younger and/or are decorated with 

childish features by the manufacturer. 

(9) Musical Instruments—Musical 

instruments, including electronicallyaided instruments suited for an adult 

musician, are general use products. 

Instruments intended primarily for 

children can be distinguished from 

adult instruments by their size and 

marketing themes. The Commission 

notes that if a distributor or retailer sells 

or rents in bulk, a general use musical 

instrument through distribution 

channels that target children 12 years of 

age or younger in educational settings, 

such as schools or summer camps, this 

type of a distribution strategy would not 

necessarily convert a general use 

product into a children’s product. 

However, if the product is packaged in 

such a manner that either expressly 

states or implies with graphics, themes, 

labeling, or instructions that the product 

is designed or intended primarily for 

children 12 years of age or younger, 

then it may be considered a children’s 

product if the required consideration of 

all four statutory factors supports that 

determination. 

Dated: October 6, 2010. 

Todd A. Stevenson, 

Secretary, Consumer Product Safety 

Commission. 

[FR Doc. 2010–25645 Filed 10–13–10; 8:45 am] 

BILLING CODE 6355–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 44 

RIN 3038–AD24 

Interim Final Rule for Reporting PreEnactment Swap Transactions 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Interim final rule; request for 

public 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 729 of the 

Dodd-Frank Act requires the CFTC to 

adopt, within 90 days of enactment of 

the Dodd-Frank Act, an interim final 

rule for the reporting of swap 

transactions entered into before July 21, 

2010 whose terms had not expired as of 

that date (‘‘pre-enactment unexpired 

swaps’’). Pursuant to this mandate, the 

CFTC is today adopting an interim final 

rule requiring specified counterparties 

to pre-enactment unexpired swap 

transactions to report certain 

information related to such transactions 

to a registered swap data repository 

(‘‘SDR’’) 1 or to the Commission by the 

compliance date to be established in 

reporting rules required under 

Section2(h)(5) of the CEA, or within 60 

days after an SDR becomes registered 

under Section 21 of the CEA, whichever 

occurs first. An interpretive note to the 

rule advises that counterparties that 

may be required to report to an SDR or 

the CFTC will need to preserve 

information pertaining to the terms of 

such swaps. 

DATES: This interim final rule is 

effective October 14, 2010. Comments 


emcdonald on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 75, No. 198 / Thursday, October 14, 2010 / Rules and Regulations 63081 

2 17 CFR 145.9. 

3See 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. 

4Pursuant to Section 701 of the Dodd-Frank Act, 

Title VII may be cited as the ‘‘Wall Street 

Transparency and Accountability Act of 2010.’’ 

5 7 U.S.C. 1 et seq. 

6 ‘‘(5) Reporting Transition Rules.—Rules adopted 

by the Commission under this section shall provide 

for the reporting of 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 or— 

(i) 90 days after such effective date; or such other 

time after entering into the swap as the Commission 

may prescribe by rule or regulation. 

7Section 21, added by Section 728 of the DoddFrank Act, requires that SDRs directly or indirectly 

making use of the mails or any means or 

instrumentality of interstate commerce to perform 

the functions of an SDR be registered with the 

Commission, and establishes statutory duties 

applicable to registered SDRs. 

on all aspects of the interim final rule 

must be received on or before November 

15, 2010. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

• Agency Web Site: Follow the 

instructions for submitting comments at 

http://www.federalregister.gov/agencies/ 

commodity-futures-trading-commission. 

• E-mail: peswapreport@cftc.gov. 

• Mail: Address to David A. Stawick, 

Secretary, Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581. 

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 established procedures in CFTC 

Regulation 145.9.2

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 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, Washington, DC 20581, at 

(202) 418.5133. 

SUPPLEMENTARY INFORMATION: The 

Commission is adopting Part 44 to its 

Regulations under the Commodity 

Exchange Act as an interim final rule 

and is soliciting comment on all aspects 

of the rule. The Commission will 

carefully consider all comments 

received and will address them, where 

applicable, in connection with the 

permanent reporting rules required to be 

adopted by 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’’).3 Title VII of the 

Dodd-Frank Act 4 amended the 

Commodity Exchange Act (‘‘CEA’’) 5 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 realtime 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 or to the Commission 

if there is no registered SDR that would 

accept the swap. Section 723 of the 

Dodd-Frank Act adds Section 2(h)(5) to 

the CEA to require that pre-enactment 

swaps be reported to a registered SDR or 

to the Commission no later than 180 

days after the effective date of that 

subsection.6 By its terms, the 

effectiveness of this rule is governed by 

the effective date of the Dodd-Frank 

Act—July 16, 2011. Section 729 of the 

Dodd-Frank Act establishes, in new 

Section 4r of the CEA, reporting 

requirements that 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. 

Section 4r(a)(1) of the CEA, as 

amended, provides generally that each 

swap that is not accepted for clearing by 

any derivatives clearing organization 

(‘‘DCO’’) must be reported to a swap data 

repository (‘‘SDR’’) registered in 

accordance with new Section 21 of the 

CEA 7 or, where there is no SDR that 

would accept the swap, to the 

Commission within the time period 

prescribed by the Commission. Section 

4r(a)(2) specifies that each swap entered 

into before the date of enactment of the 

Dodd-Frank Act, the terms of which had 

not expired by the date of enactment of 

that Act, must be reported to a 

registered SDR or to the Commission, 

and directs the Commission to 

promulgate, within 90 days of 

enactment of the Dodd-Frank Act, an 

interim final rule providing for the 

reporting of such swaps. Section 

4r(a)(2)(A) directs that such swaps be 

reported by a date 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. 

Consistent with this mandate, the 

Commission is adopting, in new Part 44 

of the Commission’s regulations, Rule 

44.02 to (i) establish a reporting time 

frame for unexpired pre-enactment 

swaps that is no later than 60 days from 

the date the appropriate SDR is 

registered with the Commission or by 

the compliance date established in the 

swap reporting rules required by 

Section 2(h)(5) of the CEA, whichever 

comes first; and (ii) require that 

counterparties specified in Section 

4r(a)(3) report information concerning 

pre-enactment unexpired swaps to the 

Commission on request during the 

interim period. Finally, the Commission 

is specifying in an interpretive note 

(‘‘Note’’) to Rule 44.02(a) the information 

the Commission believes reporting 

entities should retain in order to comply 

with the reporting obligations in the 

rule. 

II. The Interim Final Rule 

A. Reconciling the Relevant Statutory 

Provisions 

Sections 723 and 729 of the DoddFrank Act establish requirements for the 

reporting of pre-enactment swaps to 

SDRs or to the Commission; each 

provides generally that swaps must be 

reported pursuant to such rules or 

regulations as the Commission 

prescribes. Section 729 provides that 

swaps entered into prior to the July 21, 

2010 enactment date and outstanding on 


emcdonald on DSK2BSOYB1PROD with RULES
63082 Federal Register / Vol. 75, No. 198 / Thursday, October 14, 2010 / Rules and Regulations 

8The interim final rule must be promulgated 

within 90 days of enactment of the Dodd-Frank Act. 

See Section 4r(a)(2)(B). 

9Section 774 of the Dodd-Frank Act describes the 

effective date as follows: ‘‘unless otherwise 

provided,’’ the provisions of Title VII shall take 

effect ‘‘on the later of 360 days after the date of 

enactment’’ or to the extent that a provision of Title 

VII requires a rulemaking, ‘‘not less than 60 days 

after publication of the final rule or regulation 

implementing’’ such provision of Title VII. 

10The Commission believes that this 

circumstance might occur where no SDR has yet 

been approved or where no SDR has been approved 

for a particular asset class. In addition, it is 

conceivable that an SDR’s system might not be 

equipped to accept a particular bespoke swap 

transaction. 

11Section 4r(a)(2)(B) provides that ‘‘[t]he 

Commission shall promulgate an interim final rule 

within 90 days of the date of enactment of this 

section providing for the reporting of each swap 

entered into before the date of enactment as 

referenced in subparagraph (A).’’ See Section 729 of 

the Dodd-Frank Act. 

12For swaps in which only one counterparty is 

a swap dealer or major swap participant, that swap 

dealer or major swap participant shall report the 

swap (Section 4r(3)(A)); where one counterparty is 

a swap dealer and the other is a major swap 

participant, the swap dealer shall report the swap 

(Section 4r(3)(B)). With respect to any other swap 

not described in subsections (A) and (B), the 

counterparties to the swap shall select a 

counterparty to report the swap (Section 

4r(a)(3)(C)). 13Lincoln, ‘‘Wall Street Transparency and 

Accountability,’’ Congressional Record (July 15, 

2010) at S5923. 

14Financial historians believe that the first swap 

transaction was executed between the World Bank 

and IBM Corporation in 1981. See Paul C. Harding, 

Mastering the ISDA Master Agreements (1992 and 

2002) (FT Prentice Hall, 3d Ed. 2010) at 9. As noted 

in the text accompanying this footnote, the 

operational difficulties in requiring reporting of all 

swaps executed since 1981 could be substantial, 

and the cost in terms of technology and human 

capital resources would far outweigh any potential 

benefits for swaps that have expired. 

15The reporting obligations of specified 

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

the CEA, as amended. 

that date (hereafter ‘‘pre-enactment 

unexpired swaps’’) must be reported to 

a registered SDR or the CFTC not later 

than 30 days after the CFTC issues an 

interim final rule 8 or such other period 

determined by the CFTC. Section 723 

similarly provides that the Commission 

must promulgate a rule that preenactment swaps must be reported to a 

registered SDR not later than 180 days 

after the effective date of the 

subsection.9 The inconsistencies 

between these two reporting provisions 

must be reconciled in order to eliminate 

uncertainty with respect to the actual 

reporting requirements for preenactment swaps. 

1. Section 729 

Section 4r(a)(1) of the CEA, added by 

section 729 of the Dodd-Frank Act, 

provides generally that each swap that 

is not accepted for clearing by any DCO 

must be reported to an SDR described in 

new Section 21 of the CEA or, in the 

case where there is no SDR that would 

accept the swap,10 to the Commission 

within the time period prescribed by the 

Commission. Specifically, preenactment swaps must, pursuant to new 

CEA Section 4r(a)(2)(A), be reported to 

a registered SDR, or to the Commission 

if no SDR would accept the swap, by a 

date that is not later than 30 days after 

the issuance of the interim final rule 

prescribed in new Section 4r(a)(2)(B) 11

or such other period as the Commission 

determines to be appropriate. Section 

4r(a)(3) delineates the reporting 

obligations of the parties in specific 

circumstances.12

2. Section 723 

Section 723 of the Dodd-Frank Act 

adds to the CEA new Section 2(h)(5), 

which similarly requires that the 

Commission adopt a reporting transition 

rule for swaps entered into before the 

date of enactment of that subsection. 

Section 2(h)(5) provides that such swaps 

shall be reported to a registered SDR or 

to the Commission no later than 180 

days after the effective date of that 

subsection—or approximately 540 days 

after the date of enactment. 

3. Legislative Intent 

In a July 15, 2010 floor statement, 

Senator Lincoln addressed the 

inconsistencies between Sections 2(h)(5) 

and 4r(a)(2)(A) and emphasized 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

B. Scope and Coverage of the Interim 

Final Rule 

As noted, new Section 2(h)(5) does 

not contain the same qualifying 

language found in Section 4r(a)(2)(A), 

which limits the swaps that must be 

reported to pre-enactment swaps whose 

terms have not expired as of the date of 

enactment. In the Commission’s view, 

failure to limit the term ‘‘pre-enactment 

swaps’’ to ‘‘pre-enactment unexpired 

swaps’’ would require reporting of every 

swap that has ever been entered into.14

There are obvious practical and 

operational difficulties in an 

interpretation that imposes reporting 

requirements on expired swaps: 

counterparties may not have kept 

thorough, complete—or indeed any— 

records of such transactions. Moreover, 

the argument can be made that a swap 

whose terms have expired is no longer 

a swap as defined in the Dodd-Frank 

Act. For these reasons, the Commission 

believes that the trades described in 

Section 2(h)(5) should be viewed as 

consistent with those described in 

Section 4r(a)(2); that is, limited to those 

pre-enactment trades whose terms had 

not expired at the time of enactment— 

i.e., July 21, 2010. 

1. Reporting Obligations 

Rule 44.02(a) requires that the 

designated counterparty to a preenactment unexpired swap 

transaction 15 submit, with respect to 

such transaction, the following 

information to a registered SDR or to the 

Commission: (i) A copy of the 

transaction confirmation in electronic 

form, if available, or in written form if 

there is no electronic copy; and (ii) if 

available, the time the transaction was 

executed. In addition, Rule 44.02(b) 

provides that a counterparty to a preenactment unexpired swap transaction 

must report 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 

pre-enactment 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 DoddFrank Act. 

2. Reporting Party 

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

the party obligated to report a swap 

transaction: either a swap dealer, a 

major swap participant, or a 

counterparty to the transactions. These 

provisions apply to reporting under the 

interim final rule. Specifically, Section 

4r(a)(3) provides, with respect to a swap 

in which only one counterparty is a 

swap dealer or major swap participant, 

it is that entity’s responsibility to 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 must 

report the swap; with respect to any 

other swap, the counterparties shall 

select one of them to report the swap. 

Rule 44.02(b) incorporates these 

provisions. 


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Federal Register / Vol. 75, No. 198 / Thursday, October 14, 2010 / Rules and Regulations 63083 

16Section 2(h)(5) does not specify an effective 

date. In these circumstances, the ‘‘default’’ effective 

date would be 360 days after enactment of the 

Dodd-Frank Act or 60 days after publication of a 

final rule or regulation. Adoption of the effective 

date prescribed in Section 2(h)(5) permits the 

implementation of Section 4r and achieves Senator 

Lincoln’s goal of assuring consistency between the 

two legislative provisions embodied in Sections 4r 

and 2(h)(5). 

17 5 U.S.C. 553. 18 5 U.S.C. 553(b). 19 Id. 20 5 U.S.C. 553(d). 

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

22 44 U.S.C. 3501 et seq. 

3. Effective Date for Reporting PreEnactment Unexpired Swaps 

New CEA Section 4r(a)(2)(C) 

establishes that the reporting provisions 

of section 4r are effective immediately 

upon enactment of the Dodd-Frank Act, 

despite the fact that at this time (i) there 

are no registered SDRs to immediately 

accept the swap data; (ii) the 

Commission is not prepared to accept 

swap data; and (iii) the Commission has 

not adopted rules governing either the 

registration of swap dealers or major 

swap participants or the reporting and 

maintenance of such data and is not 

required to do so until 360 days after 

enactment of the Dodd-Frank Act.16 In 

these circumstances, Section 4r should 

be read to require that the reporting 

obligation became effective on 

enactment of the Dodd-Frank Act and 

that counterparties who are subject to 

this obligation should, as of the date of 

enactment, retain all data relating to 

pre-enactment unexpired swaps until 

such time as reporting can be effected— 

e.g., when swap dealers and major swap 

participants, as well as the appropriate 

SDRs, have been registered, or when 

permanent regulations are enacted 

pursuant to Section 2(h)(5) of the CEA, 

whichever occurs first. 

4. Record Retention 

The pre-enactment swap transactions 

that must be reported pursuant to 

Section 4r of the CEA, as amended, and 

the new interim final rule (Part 44 of the 

Commission’s Regulations) occurred 

prior to enactment of the Dodd-Frank 

Act. Accordingly, implicit in the 

reporting requirements established by 

Section 4r and Rule 44 is the obligation 

of each counterparty to such 

transactions to retain information and 

documents relating to the terms of the 

transaction. Rule 44.02 includes a Note 

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

counterparties to a pre-enactment 

unexpired swap that may be required to 

report such transaction to retain in its 

existing format all information and 

documents, to the extent and in such 

form as they presently exist, relating to 

the terms of the transaction. This 

information includes, but is not limited 

to: (i) Any information necessary to 

identify and value the transaction; (ii) 

the date and time of execution of the 

transaction; (iii) information relevant to 

the price of the transaction; (iv) 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; (v) any modification(s) to 

the terms of the transaction; and (vi) the 

final confirmation of the transaction. 

The Commission believes that 

counterparties that may be required to 

report such transactions should retain 

such information in order to comply 

with the reporting requirements of Rule 

44.02. The information identified above 

and in the Note is designed to 

encompass material information about 

pre-enactment unexpired swap 

transactions that may be the subject of 

a request by the Commission to report 

pursuant to the interim final rule, as 

well as rules subsequently adopted 

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

CEA, and that will assist the 

Commission in performing its oversight 

functions under the CEA. 

The Note does not require any 

counterparty to a pre-enactment 

unexpired swap to create or retain new 

records with respect to transactions that 

occurred in the past. Permitting records 

to be retained in their existing format is 

designed to ensure that important 

information relating to the terms of preenactment unexpired swaps is 

preserved with minimal burden on the 

counterparties. Similarly, the 

Commission understands that 

information that the counterparty does 

not have prior to the effective date of the 

interim final rule cannot be reported. 

III. Related Matters 

A. Administrative Procedure Act 

The Administrative Procedure Act 17

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

publish notice of a proposed rulemaking 

in the Federal Register.18 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.’’ 19

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.20 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 were not expired as of 

that date. The Commission is adopting 

Part 44 to its Regulations in response to 

this mandate. In these circumstances, 

the Commission, for good cause, fines 

that notice and solicitation is 

impracticable, unnecessary or contrary 

to the public interest. This finding also 

satisfies the requirements of 5 U.S.C. 

808(2), permitting the rule to become 

effective notwithstanding the 

requirement of 5 U.S.C. 801 (if a federal 

agency finds that notice and public 

comment are ‘‘impractical, unnecessary 

or contrary to the public interest,’’ a rule 

‘‘shall take effect at such time as the 

federal agency promulgating the rule 

determines.’’). 

B. Paperwork Reduction Act 

1. Reporting Requirements 

The Commission has determined that 

these proposed orders 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 under the Paperwork 

Reduction Act.21 The reporting 

requirements associated with Section 

723 of the Dodd-Frank Act will be 

adopted by the Commission, at which 

time the Commission will issue a notice 

and request comments on the reporting 

requirements and seek OMB approval as 

provided by 5 CFR 1320.8 and 1320.11. 

2. Recordkeeping Requirements 

Proposed Commission Regulation 

44.02 imposes a recordkeeping 

requirement on swap counterparties that 

is considered to be a collection of 

information within the meaning of the 

Paperwork Reduction Act (‘‘PRA’’).22

The Commission therefore is required to 

submit to the Office of Management and 

Budget (OMB) an information collection 

request for review and approval in 

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

5 CFR 1320.8 an d1320.11. The 

Commission will, by separate action, 

publish in the Federal Register a notice 

and request for comments on the 

paperwork burden associated with these 

recordkeeping requirements in 

accordance with 5 CFR 1320.8. If 

approved, this new collection of 

information will be mandatory. 

C. Cost-Benefit Analysis 

Section 15 of the CEA requires the 

Commission to consider the costs and 


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63084 Federal Register / Vol. 75, No. 198 / Thursday, October 14, 2010 / Rules and Regulations 

23 5 U.S.C. 601(2). 

24 5 U.S.C. 553(b). 

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 to 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 set 

forth in that Act, including the reporting 

of swap transactions. This interim final 

rule implements the Dodd-Frank Act by 

establishing reporting requirements for 

pre-enactment unexpired swaps as 

required by Section 729 of that Act and 

serving as notice to reporting entities of 

a present obligation to retain data 

related to such swaps for reporting at a 

future date. The rule will enable the 

Commission to obtain data on preenactment swaps and will also provide 

for the preservation of data on such 

swaps until the Commission issues 

permanent recordkeeping and reporting 

rules for all swaps. By making available 

transaction data on pre-enactment 

swaps, this action will enable the 

Commission to gain a better 

understanding of the swap market— 

including the size and scope of that 

market; this understanding will 

ultimately lead to a more robust and 

transparent environment for the market 

for swaps. 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 Rule 44.02(a)(1) and (2) 

addresses the retention of records 

relating to swaps entered into before 

July 21, 2010, the terms of which had 

not expired as of that date. Although 

there are recordkeeping costs associated 

with retention of existing swap 

transaction information, the 

Commission does not believe those 

costs will be significant. The rule does 

not require market participants to 

modify the data they have for retention 

purposes, and the information that is 

required 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 permanent reporting rules that 

the Commission is required to adopt 

under new CEA Section 2(h)(5) also will 

apply to pre-enactment swaps. 

Accordingly, in adopting this interim 

final rule, the Commission has sought to 

limit the burden on market participants 

by not imposing substantial or 

potentially conflicting reporting 

requirements. 

D. The 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 * * *.’’ 23 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.’’ 24

Congress in Section 4r(a)(2)(B) of the 

CEA directs the Commission to 

promulgate an interim final rule within 

90 days of enactment of the Dodd-Frank 

Act to require the reporting of 

unexpired pre-enactment swaps. The 

Commission believes that the RFA does 

not apply to this interim final rule 

because ‘‘good cause’’ under 5 U.S.C. 

553(b) has been established by specific 

order of Congress in the Dodd-Frank 

Act. 

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 Section 4r (a)(2) of the 

Act, the Commission hereby proposes to 

amend Chapter I of Title 17 of the Code 

of Federal Regulation by adding a new 

Part 44 as follows: 

PART 44—INTERIM FINAL RULE FOR 

PRE-ENACTMENT SWAP 

TRANSACTIONS 

Sec. 

44.00 Definition of terms used in Part 44 of 

this chapter. 

44.01 Effective date. 

44.02 Reporting pre-enactment swaps to a 

swap data repository or the Commission. 

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). 

§ 44.00 Definition of terms used in Part 44 

of this chapter. 

(a) Major swap participant shall have 

the meaning provided in Section 1a(33) 

of the Commodity Exchange Act, as 

amended, and any rules or regulations 

thereunder. 

(b) Pre-enactment unexpired swap 

means any swap entered into prior to 

the enactment of the Dodd-Frank Act of 

2010 (July 21, 2010) the terms of which 

had not expired as of the date of 

enactment of that Act; 

(c) Reporting entity, when used in this 

Part, means any counterparty referenced 

or identified in Section 4r(a)(3)(A)–(C) 

of the Commodity Exchange Act, as 

amended; 

(d) Swap Data Repository shall have 

the meaning provided in Section 1a(48) 

of the Commodity Exchange Act, as 

amended, and any rules or regulations 

thereunder; 

(e) Swap Dealer shall have the 

meaning provided in Section 1(a)(49) of 

the Commodity Exchange Act, as 

amended, and any rules or regulations 

thereunder; 

§ 44.01 Effective date. 

The provisions of this Part are 

effective immediately on publication in 

the Federal Register. 

§ 44.02 Reporting pre-enactment swaps to 

a swap data repository or the Commission. 

(a) A counterparty to a pre-enactment 

unexpired swap transaction shall: 

(1) Report to a registered swap data 

repository or the Commission by the 

compliance date established in the 

reporting rules required under Section 

2(h)(5) of the Commodity Exchange Act, 

or within 60 days after a swap data 

repository becomes registered with the 

Commission and commences operations 

to receive and maintain data related to 

such swap, whichever occurs first, the 


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Federal Register / Vol. 75, No. 198 / Thursday, October 14, 2010 / Rules and Regulations 63085 

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; and 

(ii) The time, if available, that the 

transaction was executed; and 

(2) Report to the Commission on 

request, in a form and manner 

prescribed by the Commission, any 

information relating to the swap 

transaction. 

Note to Paragraphs (a)(1) and (a)(2). In 

order to comply with the reporting 

requirements contained in paragraph 

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

counterparty to a pre-enactment 

unexpired 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 

presently exist, relating to the terms of 

a swap transaction, including but not 

limited to any information necessary to 

identify and value the transaction; the 

date and time of execution of the 

transaction; information relevant to the 

price of the transaction; 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. 

By the Commission. 

Dated: October 1, 2010. 

David A. Stawick, 

Secretary. 

[FR Doc. 2010–25325 Filed 10–13–10; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 529 

[Docket No. FDA–2010–N–0002] 

Certain Other Dosage Form New 

Animal Drugs; Progesterone 

Intravaginal Inserts 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Final rule. 

SUMMARY: The Food and Drug 

Administration (FDA) is amending the 

animal drug regulations to reflect 

approval of a supplemental new animal 

drug application (NADA) filed by 

Pharmacia & Upjohn Co., a Division of 

Pfizer, Inc. The supplemental NADA 

provides for use of progesterone 

intravaginal inserts and dinoprost 

tromethamine by injection for 

synchronization of estrus in lactating 

dairy cows. 

DATES: This rule is effective October 14, 

2010. 

FOR FURTHER INFORMATION CONTACT: 

Suzanne J. Sechen, Center for Veterinary 

Medicine (HFV–126), Food and Drug 

Administration, 7500 Standish Pl., 

Rockville, MD 20855, 240–276–8105, 

e-mail: suzanne.sechen@fda.hhs.gov. 

SUPPLEMENTARY INFORMATION: Pharmacia 

& Upjohn Co., a Division of Pfizer, Inc., 

235 East 42d St., New York, NY 10017 

filed a supplement to NADA 141–200 

that provides for use of EAZI–BREED 

CIDR Progesterone Intravaginal Inserts 

and dinoprost tromethamine by 

injection for synchronization of estrus 

in lactating dairy cows. The NADA is 

approved as of July 22, 2010, and the 

regulations are amended in 21 CFR 

529.1940 to reflect the approval. 

In accordance with the freedom of 

information provisions of 21 CFR part 

20 and 21 CFR 514.11(e)(2)(ii), a 

summary of safety and effectiveness 

data and information submitted to 

support approval of this application 

may be seen in the Division of Dockets 

Management (HFA–305), Food and Drug 

Administration, 5630 Fishers Lane, rm. 

1061, Rockville, MD 20852, between 

9 a.m. and 4 p.m., Monday through 

Friday. 

Under section 512(c)(2)(F)(iii) of the 

Federal Food, Drug, and Cosmetic Act 

(21 U.S.C. 360b(c)(2)(F)(iii)), this 

supplemental approval qualifies for 3 

years of marketing exclusivity beginning 

on the date of approval. 

The agency has determined under 21 

CFR 25.33 that this action is of a type 

that does not individually or 

cumulatively have a significant effect on 

the human environment. Therefore, 

neither an environmental assessment 

nor an environmental impact statement 

is required. 

This rule does not meet the definition 

of ‘‘rule’’ in 5 U.S.C. 804(3)(A) because 

it is a rule of ‘‘particular applicability.’’ 

Therefore, it is not subject to the 

congressional review requirements in 

5 U.S.C. 801–808. 

List of Subjects in 21 CFR Part 529 

Animal drugs. 

■ Therefore, under the Federal Food, 

Drug, and Cosmetic Act and under the 

authority delegated to the Commissioner 

of Food and Drugs and redelegated to 

the Center for Veterinary Medicine, 21 

CFR part 529 is amended as follows: 

PART 529—CERTAIN OTHER DOSAGE 

FORM NEW ANIMAL DRUGS 

■ 1. The authority citation for 21 CFR 

part 529 continues to read as follows: 

Authority: 21 U.S.C. 360b. 

■ 2. In § 529.1940, revise paragraphs 

(d)(2) and (e)(1) and remove the last 

sentence in paragraph (e)(2)(iii) to read 

as follows: 

§ 529.1940 Progesterone intravaginal 

inserts. 

* * * * * 

(d) * * * 

(2) Cows. This product is approved 

with the concurrent use of dinoprost 

solution when used for indications 

listed in paragraphs (e)(1)(ii)(A) and 

(e)(1)(ii)(B) of this section. See 

§ 522.690(c) of this chapter. 

(e) * * * 

(1) Cows—(i) Amount. Administer one 

intravaginal insert per animal for 7 days. 

When used for indications listed in 

paragraph (e)(1)(ii)(A) of this section, 

administer 25 milligrams (mg) dinoprost 

(5 milliliters (mL) of 5 mg/mL solution 

as in § 522.690(a) of this chapter) as a 

single intramuscular injection 1 day 

prior to insert removal (Day 6). When 

used for indications listed in paragraph 

(e)(1)(ii)(B) of this section, administer 25 

mg dinoprost as a single intramuscular 

injection on the day of insert removal 

(Day 7). 

(ii) Indications for use—(A) For 

synchronization of estrus in suckled 

beef cows and replacement beef and 

dairy heifers; for advancement of first 

postpartum estrus in suckled beef cows; 

and for advancement of first pubertal 

estrus in replacement beef heifers. 

(B) For synchronization of estrus in 

lactating dairy cows. 

(C) For synchronization of the return 

to estrus in lactating dairy cows 


emcdonald on DSK2BSOYB1PROD with RULES