35200 Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Rules and Regulations 

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: Final rulemaking. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘Commission’’ or 

‘‘CFTC’’) is adopting rules to further 

implement the Commodity Exchange 

Act (‘‘CEA’’ or ‘‘Act’’) with respect to 

the new statutory framework regarding 

swap data recordkeeping and reporting 

established by the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (‘‘Dodd-Frank Act’’). The DoddFrank Act, which amended the CEA, 

directs 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 the Dodd-Frank 

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

relating to swaps entered into on or after 

the date of enactment of the Dodd-Frank 

Act and prior to the compliance date 

specified in the Commission’s final 

swap data reporting rules (‘‘transition 

swaps’’). These final rules establish 

swap data recordkeeping and reporting 

requirements for pre-enactment swaps 

and transition swaps. 

DATES: The effective date of this part is 

August 13, 2012. Compliance dates: (1) 

Swap dealers and major swap 

participants shall commence full 

compliance with this part with respect 

to credit swaps and interest rate swaps 

on the later of: July 16, 2012; or 60 

calendar days after publication in the 

Federal Register of the later of the 

Commission’s final rule defining the 

term ‘‘swap’’ or the Commission’s final 

rule defining the terms ‘‘swap dealer’’ 

and ‘‘major swap participant;’’ (2) Swap 

dealers and major swap participants 

shall commence full compliance with 

this part with respect to equity swaps, 

foreign exchange swaps, and other 

commodity swaps on or before 90 days 

after the compliance date for credit 

swaps and interest rate swaps; (3) NonSD/MSP counterparties shall commence 

full compliance with this part with 

respect to all swaps on or before 90 days 

after the compliance date applicable to 

swap dealers and major swap 

participants with respect to equity 

swaps, foreign exchange swaps, and 

other commodity swaps. 

FOR FURTHER INFORMATION CONTACT: 

David Taylor, Associate Director, 

Division of Market Oversight, 202–418– 

5488, dtaylor@cftc.gov; Commodity 

Futures Trading Commission, Three 

Lafayette Centre, 1155 21st Street NW., 

Washington, DC 20851. 

SUPPLEMENTARY INFORMATION: The 

Commission is adopting new part 46 of 

its regulations relating to recordkeeping 

and reporting requirements applicable 

to both pre-enactment and transition 

swaps. 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. Introduction ................................................................................................................................................................................ ....................

B. Swap Data Provisions of the Dodd-Frank Act .......................................................................................................................... ....................

C. The Commission’s Part 45 Rules on Swap Data Recordkeeping and Reporting Requirements ............................................ ....................

D. The Interim Final Rules for Pre-Enactment and Transition Swaps ........................................................................................ ....................

E. Summary of the Proposed Part 46 Rule .................................................................................................................................... ....................

1. Fundamental Goals .............................................................................................................................................................. ....................

2. Historical Swap Recordkeeping .......................................................................................................................................... ....................

3. Historical Swap Data Reporting .......................................................................................................................................... ....................

4. Unique Identifiers ................................................................................................................................................................ ....................

5. Determination of Which Counterparty Must Report ......................................................................................................... ....................

6. Third-Party Facilitation of Reporting ................................................................................................................................. ....................

7. Reporting a Swap to a Single SDR ...................................................................................................................................... ....................

8. Reporting Swaps in an Asset Class Not Accepted By Any SDR ...................................................................................... ....................

9. Data Standards ..................................................................................................................................................................... ....................

10. Reporting Errors in Previously Reported Data ................................................................................................................. ....................

F. Overview of Comments Received .............................................................................................................................................. ....................

II. Part 46 of the Commission’s Regulations ......................................................................................................................................... ....................

A. Recordkeeping Requirements .................................................................................................................................................... ....................

1. Proposed Rule ...................................................................................................................................................................... ....................

2. Comments Received ............................................................................................................................................................. ....................

3. Final Rule ............................................................................................................................................................................. ....................

B. Swap Data Reporting .................................................................................................................................................................. ....................

1. Proposed Rule ...................................................................................................................................................................... ....................

2. Comments Received ............................................................................................................................................................. ....................

3. Final Rule ............................................................................................................................................................................. ....................

C. Unique Identifiers ....................................................................................................................................................................... ....................

1. Proposed Rule ...................................................................................................................................................................... ....................

2. Comments Received ............................................................................................................................................................. ....................

3. Final Rule ............................................................................................................................................................................. ....................

D. Determination of the Reporting Counterparty .......................................................................................................................... ....................

1. Proposed Rule ...................................................................................................................................................................... ....................

2. Comments Received ............................................................................................................................................................. ....................

3. Final Rule ............................................................................................................................................................................. ....................

E. Third-Party Facilitation of Data Reporting ................................................................................................................................ ....................

1. Proposed Rule ...................................................................................................................................................................... ....................

2. Comments Received ............................................................................................................................................................. ....................

3. Final Rule ............................................................................................................................................................................. ....................

F. Reporting to a Single Swap Data Repository ............................................................................................................................ ....................

1. Proposed Rule ...................................................................................................................................................................... ....................

2. Comments Received ............................................................................................................................................................. ....................


srobinson on DSK4SPTVN1PROD with RULES4
Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Rules and Regulations 35201 

1 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. 2Pursuant to Section 701 of the Dodd-Frank Act, 

Title VII may be cited as the ‘‘Wall Street 

Transparency and Accountability Act of 2010.’’ 3 7 U.S.C. 1 et seq. 

4See also CEA § 1a(40)(E). 

5Regulations governing core principles and 

registration requirements for, and the duties of, 

SDRs are the subject of part 49 of this chapter. 

3. Final Rule ............................................................................................................................................................................. ....................

G. Data Reporting for Swaps in a Swap Asset Class Not Accepted by any Swap Data Repository .......................................... ....................

1. Proposed Rule ...................................................................................................................................................................... ....................

2. Comments Received ............................................................................................................................................................. ....................

3. Final Rule ............................................................................................................................................................................. ....................

H. Required Data Standards ........................................................................................................................................................... ....................

1. Proposed Rule ...................................................................................................................................................................... ....................

2. Comments Received ............................................................................................................................................................. ....................

3. Final Rule ............................................................................................................................................................................. ....................

I. Reporting of Errors and Omissions in Previously Reported Data ............................................................................................. ....................

1. Proposed Rule ...................................................................................................................................................................... ....................

2. Comments Received ............................................................................................................................................................. ....................

3. Final Rule ............................................................................................................................................................................. ....................

J. Compliance Dates ........................................................................................................................................................................ ....................

1. Proposed Rule ...................................................................................................................................................................... ....................

2. Comments Received ............................................................................................................................................................. ....................

3. Final Rule ............................................................................................................................................................................. ....................

III. Related Matters ................................................................................................................................................................................. ....................

A. Regulatory Flexibility Act .......................................................................................................................................................... ....................

B. Paperwork Reduction Act .......................................................................................................................................................... ....................

1. Introduction .......................................................................................................................................................................... ....................

2. Need for Information Collection ......................................................................................................................................... ....................

3. Comment on proposed information collection .................................................................................................................. ....................

4. Recordkeeping burdens ....................................................................................................................................................... ....................

5. Reporting Burdens ............................................................................................................................................................... ....................

C. Consideration of Costs and Benefits .......................................................................................................................................... ....................

1. Introduction .......................................................................................................................................................................... ....................

2. Recordkeeping ...................................................................................................................................................................... ....................

3. Reporting .............................................................................................................................................................................. ....................

IV. Compliance Dates ............................................................................................................................................................................. ....................

A. Introduction ................................................................................................................................................................................ ....................

B. Compliance dates for swap dealers and major swap participants .......................................................................................... ....................

C. Compliance date for non-SD/MSP counterparties .................................................................................................................... ....................

Final Rules .............................................................................................................................................................................................. ....................

I. Background 

A. Introduction 

On July 21, 2010, President Obama 

signed into law the Dodd-Frank Act.1

Title VII of the Dodd-Frank Act 2

amended the CEA 3 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: 

providing for the registration and 

comprehensive regulation of swap 

dealers (‘‘SDs’’) and major swap 

participants (‘‘MSPs’’); imposing 

clearing and trade execution 

requirements on standardized 

derivatives products; creating robust 

recordkeeping and reporting regimes 

with respect to swaps, including real 

time reporting; and enhancing the 

Commission’s rulemaking and 

enforcement authorities with respect to, 

among others, all registered entities, 

intermediaries and swap counterparties 

subject to the Commission’s 

jurisdiction. 

B. Swap Data Provisions of the DoddFrank Act 

To enhance transparency, promote 

standardization, and reduce systemic 

risk, Section 727 of the Dodd-Frank Act 

added to the CEA new section 

2(a)(13)(G), which requires all swaps, 

whether cleared or uncleared, to be 

reported to swap data repositories 

(‘‘SDRs’’),4 which are new registered 

entities created by section 728 of the 

Dodd-Frank Act to collect and maintain 

data related to swap transactions as 

prescribed by the Commission, and to 

make such data electronically available 

to regulators.5 New section 21(b) of the 

CEA, added by section 728 of the DoddFrank Act, directs the Commission to 

prescribe standards for swap data 

recordkeeping and reporting. 

Specifically, CEA section 21(b)(1)(A) 

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. 

These standards are to apply to both 

registered entities and counterparties 

involved with swaps. CEA section 

21(b)(1)(B) provides that: 

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. 

CEA section 21 also directs the 

Commission to prescribe data standards 

for SDRs. Specifically, CEA section 

21(b)(2) provides that: 

The Commission shall prescribe data 

collection and data maintenance standards 

for swap data repositories. 

These standards are to be comparable to 

those for clearing organizations. CEA 

section 21(b)(3) provides that: 

The [data] standards prescribed by the 

Commission under this subsection shall be 

comparable to the data standards imposed by 

the Commission on derivatives clearing 

organizations in connection with their 

clearing of swaps. 

In addition, CEA section 21(c)(3) 

provides that, once the data elements 

prescribed by the Commission are 

reported to an SDR, the SDR shall: 

maintain the data [prescribed by the 

Commission for each swap] in such form, in 

such manner, and for such period as may be 

required by the Commission. 


srobinson on DSK4SPTVN1PROD with RULES4
35202 Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Rules and Regulations 

6Senator Blanche Lincoln, ‘‘Wall Street 

Transparency and Accountability Act,’’ 

Congressional Record, July 15, 2010, at S5905. 8CEA § 4r(c)(2) requires individuals or entities 

that enter into a swap transaction that is neither 

cleared nor 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. 

9CEA § 4r(a)(1)(B) and § 4r(c). 

10CEA § 4r(d). 

11Subsection (A) of CEA Section 4r(a)(2) 

provides: ‘‘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.’’ 

12Pursuant 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 CFTC 

Interim Final Rule for Reporting Pre-Enactment 

Swap Transactions (‘‘Pre-Enactment Swaps IFR’’), 

75 FR 63080 (Oct. 14, 2010). 

13See Pre-Enactment Swaps IFR. 

14See CFTC Interim Final Rule for Reporting 

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

75 FR 78892 (Dec. 17, 2010). 

15Senator Blanche Lincoln, ‘‘Wall Street 

Transparency and Accountability Act,’’ 

Congressional Record, July 15, 2010, at S5923. 

16Subsection (A) of CEA Section 2(h)(5) 

Reporting Transition Rules provides: ‘‘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.’’ 

17Subsection (B) of CEA Section 2(h)(5) Reporting 

Transition Rules provides: ‘‘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 [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.’’ 

18The category of non-SD/MSP counterparties 

includes but is not limited to counterparties who 

are entitled, with respect to any swap, to elect the 

clearing requirement exception pursuant to CEA 

section 2(h)(7) with respect to particular swaps. 

19 77 FR 2136 (February 13, 2012). 

Section 727 of the Dodd-Frank Act, 

which added to the CEA new section 

2(a)(13)(G), provides that ‘‘Each swap 

(whether cleared or uncleared) shall be 

reported to a registered swap data 

repository.’’ Section 729 of the DoddFrank 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 

repository will accept the swap). 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 these 

provisions should be interpreted as 

complementary to one another to assure 

consistency between them, stating that: 

‘‘All swap trades, even those which are 

not cleared, would still be reported to 

regulators, a swap data repository, and 

subject to the public reporting 

requirements under the legislation.’’ 6

CEA Section 4r(a)(3) 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 an SD, the SD 

is required to report the swap. If one 

counterparty is an MSP, and the other 

counterparty is neither an SD nor an 

MSP (‘‘non-SD/MSP counterparty’’), the 

MSP must report. For any other swap, 

CEA section 4r(a)(3)(C) provides that the 

counterparties to the swap shall select a 

counterparty to report the swap as 

specified in section 4r.7

In addition, CEA section 4r provides 

for reporting to the Commission of 

swaps neither cleared nor 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 

regulators if requested to do so.8 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.9 Such reports must be as 

comprehensive as the data required to 

be collected by SDRs.10

Section 729 of the Dodd-Frank Act 

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.11 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.12

Section 723 of the Dodd-Frank Act, 

which added to the CEA new Section 

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

data for both swaps executed before the 

enactment of the Dodd-Frank Act 13 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.14 As 

discussed above, in a July 15, 2010 floor 

statement concerning swap data 

reporting as well as other aspects of the 

Dodd-Frank Act, Senator Lincoln 

emphasized that these provisions 

should be interpreted as complementary 

in order to assure consistency between 

them, and emphasized that ‘‘[T]his is 

particularly true with respect to issues 

such as the effective dates of these 

reporting requirements, the applicability 

of these provisions to cleared and/or 

uncleared swaps, and their 

applicability—or non-applicability—to 

swaps whose terms have expired at the 

date of enactment.’’ 15

This part refers to the two types of 

swaps addressed in CEA Section 2(h)(5) 

as follows. ‘‘Pre-enactment 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 Dodd-Frank Act.16

‘‘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 applicable 

compliance date set forth in this part 

and also specified in the final swap data 

reporting and recordkeeping 

requirements regulations in part 45 of 

this chapter.17 Collectively, this part 

refers to pre-enactment swaps and 

transition swaps as ‘‘historical swaps.’’ 

C. The Commission’s Part 45 Rules on 

Swap Data Recordkeeping and 

Reporting Requirements 

On January 13, 2012, the Commission 

published in new part 45 of its 

regulations final rules establishing swap 

data recordkeeping and reporting 

requirements applicable to SDs, MSPs, 

and non-SD/MSP counterparties,18 as 

well as to registered SDRs, DCOs, 

designated contract markets (‘‘DCMs’’), 

and swap execution facilities 

(‘‘SEFs’’).19

With respect to recordkeeping, part 45 

requires SDs and MSPs to keep records 

of all activities relating to their business 

with respect to swaps, and requires nonSD/MSP counterparties to keep records 

with respect to each swap in which they 

are a counterparty. Required records 

must be kept by all swap counterparties 

throughout the existence of a swap and 

for five years following termination of 

the swap. In the case of an SD or MSP, 

the records must be readily accessible 


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Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Rules and Regulations 35203 

20See Pre-Enactment Swaps IFR, supra note 17, 

at 63083. 

21See Pre-Enactment Swaps IFR, supra note 17. 

22 Id. at 63082. 

23See Transition Swaps IFR, supra note 18. 

24See Pre-Enactment Swaps IFR, supra note 17, 

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

at 78894. 

25See, 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’’). 

throughout the life of the swap and for 

two years following its termination, and 

retrievable by the SD or MSP within 

three business days during the 

remainder of the retention period. In the 

case of a non-SD/MSP counterparty, the 

records must be retrievable by the 

counterparty within five business days 

throughout the retention period. 

In order to ensure that complete data 

concerning swaps is available to 

regulators, part 45 calls for electronic 

reporting to an SDR of swap data from 

each of two important stages of 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. Creation data 

required to be reported pursuant to part 

45 includes both primary economic 

terms (‘‘PET’’) data and confirmation 

data for a swap. Continuation data 

required to be reported includes all 

changes to primary economic terms and 

all required valuation data. For swaps 

executed on or after the applicable 

compliance date, part 45 establishes a 

streamlined reporting regime calling for 

reporting by the entity or reporting 

counterparty the Commission believes 

has the easiest, fastest, and cheapest 

access to the data. For all swaps 

executed on a SEF or DCM, all required 

creation data is reported by the SEF or 

DCM. For off-facility swaps accepted for 

clearing within the applicable deadline 

for reporting PET data, all required 

swap creation data is reported by the 

DCO. For off-facility swaps not cleared 

or not accepted for clearing within the 

applicable deadline, required swap 

creation data is reported by the 

reporting counterparty. Continuation 

data for cleared swaps is reported by the 

DCO, though SD and MSP reporting 

counterparties must also report 

valuation data. For uncleared swaps, all 

continuation data is reported by the 

reporting counterparty. 

Part 45 notes that the obligations of 

swap counterparties with respect to 

historical swaps, i.e., swaps executed 

prior to the applicable compliance date 

and in existence on or after the date of 

enactment of the Dodd-Frank Act, will 

be as provided in part 46. 

D. The Interim Final Rules for PreEnactment and Transition Swaps 

Interim Final Rule for Pre-Enactment 

Swaps. New section 4r(a)(2) to the CEA, 

added by the Dodd-Frank Act, 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 

section 4r(a)(2)(B), the Commission 

published in new part 44 of its 

regulations an IFR advising specified 

counterparties to pre-enactment of the 

Commission’s intent to promulgate rules 

pursuant to CEA sections 2(h)(5) and 4r 

requiring that such data be reported to 

a registered SDR or to the Commission 

by a compliance date to be established 

in those rules, 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.20

This Pre-Enactment Swaps IFR stated 

that the reporting and recordkeeping 

provisions established by Section 4r and 

sections 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.21 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 that 

while 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.22

Interim Final Rule for Transition 

Swaps. Section 2(h)(5) also prescribes 

reporting requirements applicable to 

swaps entered into on or after the date 

of enactment (‘‘Transition Swaps’’). To 

provide clarity and guidance with 

respect to such swaps, the Commission 

promulgated an IFR for transition swaps 

to establish that these swaps will be 

subject to Commission regulations to be 

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

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.23

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 prescribing 

recordkeeping and reporting 

requirements for pre-enactment and 

transition swaps under part 46 of the 

Commission’s regulations. 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.24

Comments Received. The Commission 

received a number of comments in 

response to each of the IFRs and 

considered them all. 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.25 In 

this connection, commenters requested 

that the Commission issue guidance 


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35204 Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Rules and Regulations 

26EEI letter. 

27Working Group letters; EEI letter; Hess 

Corporation letter. 

28AGA letter; Coalition letters. 

29Letter dated November 12, 2010, from the 

International Swaps and Derivatives Association, 

Inc. and the Futures Industry Association. 

30Letter 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. 

31See CFTC Swap Data Recordkeeping and 

Reporting Requirements: Pre-Enactment and 

Transition Swaps, 76 FR 22833 (April 25, 2011). 

32The NOPRs for both parts 45 and 46 of this 

chapter used the term ‘‘unique counterparty 

identifier’’ in this context. As explained in the final 

part 45 rule, in response to comments the 

Commission has decided to use the term ‘‘legal 

entity identifier,’’ which refers to the same 

identifier and is in common international use, in 

order to prevent confusion. 

clarifying and limiting the information 

that must be retained,26 or create a safe 

harbor for good faith compliance 

efforts.27 Several commenters 

recommended 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.28

One commenter urged greater specificity 

with respect to the Pre-Enactment 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 preenactment swaps, particularly with 

respect to reporting protocols, record 

retention, and confidentiality issues 

(notably, those confidentiality issues 

arising in the context of cross-border 

transactions).29 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.30

The Commission considered these 

comments in preparing its part 46 

Notice of Proposed Rulemaking 

(‘‘NOPR’’) with respect to historical 

swaps.31

E. Summary of the Proposed Part 46 

Rule 

1. Fundamental Goals 

The fundamental goals of the part 46 

NOPR were to provide for 

recordkeeping and reporting with 

respect to pre-enactment swaps and 

transition swaps as required by the 

Dodd-Frank Act; to provide specificity 

and clarity, to the extent possible, 

concerning what records must be kept 

and what data must be reported with 

respect to such historical swaps; and to 

ensure that data needed by regulators 

concerning historical swaps is available 

to regulators through SDRs when swap 

data reporting begins. 

2. Historical Swap Recordkeeping 

The NOPR proposed limited 

recordkeeping requirements for 

counterparties to historical swaps. For 

swaps in existence on or after April 25, 

2011, the date of publication of the 

NOPR, counterparties would be 

required to keep records of specified, 

minimum primary economic terms for a 

swap of the asset class in question, 

listed in Tables in the Appendix to the 

NOPR. In addition, if a historical swap 

counterparty had a confirmation of the 

historical swap as of that date, the 

NOPR called for the counterparty to 

keep it. For historical swaps that 

expired or were terminated prior to 

April 25, 2011, the NOPR provided that 

counterparties should keep the records 

they already have, in the form they are 

already kept. For all historical swaps, 

the required records would have to be 

kept throughout any remaining 

existence of a historical swap and for 

five years following its final termination 

or expiration. 

3. Historical Swap Data Reporting 

a. Historical swaps in existence on or 

after April 25, 2011. For each historical 

swap in existence on or after April 25, 

2011, the NOPR called for an initial data 

report by the reporting counterparty on 

the applicable compliance date, and for 

ongoing reporting of data from the 

continuation of the historical swap 

during its remaining existence. As 

proposed, the initial data report would 

include the minimum primary 

economic terms for a historical swap of 

the asset class in question, as specified 

in the appropriate Table in the 

Appendix to the rule. If the reporting 

counterparty possessed a confirmation 

of the historical swap on or after April 

25, 2011, the confirmation terms 

recorded in the automated system of the 

reporting counterparty would also be 

included in the initial data report. For 

historical swaps already reported to an 

existing repository prior to the effective 

date of the final reporting rules, the 

NOPR would not require duplicate 

reporting. With respect to ongoing 

reporting of continuation data during 

the remaining existence of a historical 

swap, the NOPR aligned with the 

proposed part 45 rule in following 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. 

b. Historical swaps expired or 

terminated prior to April 25, 2011. For 

each historical swap which expired or 

was terminated prior to April 25, 2011, 

the NOPR called for the reporting 

counterparty to report such information 

relating to the terms of the transaction 

as was in the reporting counterparty’s 

possession as of issuance of the interim 

final rule, in either electronic or nonelectronic form at the option of the 

reporting counterparty. 

4. Unique Identifiers 

The NOPR called for the initial data 

report for each historical swap in 

existence on or after April 25, 2011, to 

include the legal entity identifier 

(‘‘LEI’’),32 as provided in part 45 of this 

chapter, of the reporting counterparty. 

The NOPR proposed giving the nonreporting counterparty for each such 

historical swap an additional 180 days 

after the applicable compliance date to 

obtain an LEI. Once this LEI was 

obtained, the NOPR called for it to be 

provided to the reporting counterparty 

and reported by the reporting 

counterparty to the SDR. After LEIs 

were obtained for either counterparty, 

the NOPR proposed requiring the 

counterparty identified by an LEI and 

the SDR to comply with the LEI 

requirements of part 45 of this chapter 

with respect to LEIs. The NOPR 

provided that the LEI requirements of 

parts 45 and 46 of this chapter would 

not apply to historical swaps expired or 

terminated prior to April 25, 2011. 

The NOPR proposed that the unique 

swap identifier and unique product 

identifier requirements of part 45 of this 

chapter would not apply to historical 

swaps. 

5. Determination of Which Counterparty 

Must Report 

The NOPR provided that 

determination of which counterparty is 

the reporting counterparty for a 

historical swap would be made in the 

same way provided in part 45 of this 

chapter. Counterparty reporting would 

follow the hierarchy outlined in the 

statute, giving SDs or MSPs the duty to 

report when possible, and limiting 

reporting by non-SD/MSP 

counterparties to situations where there 

is no SD or MSP counterparty. Where 

both counterparties have the same 

hierarchical status, the NOPR required 

them to agree as one term of their swap 

which of them is to report. Where only 

one counterparty to a historical swap is 

a U.S. person, the NOPR called for that 

counterparty to be the reporting 


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counterparty. For historical swaps in 

existence as of the applicable 

compliance date, the NOPR called for 

determination of the reporting 

counterparty to be made by applying the 

above provisions to the current 

counterparties to the swap as of the 

compliance date. For historical swaps 

for which reporting is required, but 

which have terminated prior to the 

compliance date, the NOPR called for 

determination of the reporting 

counterparty to be made as of the date 

of the swap’s expiration or termination. 

6. Third-Party Facilitation of Reporting 

The NOPR proposed explicit 

permission for third-party facilitation of 

data reporting with respect to historical 

swaps, without removing the reporting 

responsibility from the appropriate 

reporting counterparty. 

7. Reporting a Swap To a Single SDR 

To avoid fragmentation of data for a 

given historical swap across multiple 

SDRs, the NOPR provided that all data 

for a particular historical swap must be 

reported to the same SDR to which the 

initial data report concerning the swap 

is made. 

8. Reporting Swaps in an Asset Class 

Not Accepted by any SDR 

As required by section 729 of the 

Dodd-Frank Act, the NOPR provided 

that if there were an asset class for 

which no SDR currently accepted data, 

registered entities or counterparties 

required to report concerning historical 

swaps in such an asset class would be 

required to report the same data to the 

Commission at a time and in a form and 

manner determined by the Commission. 

9. Data Standards 

The NOPR required reporting 

counterparties for historical swaps to 

use the facilities, methods, or data 

standards provided or required by the 

SDR to which the counterparty reports 

swap data. 

10. Reporting Errors in Previously 

Reported Data 

Finally, the NOPR required reporting 

counterparties to report any errors or 

omissions in reported data, in the same 

format as the original data report, as 

soon as technologically practicable after 

their discovery. Non-reporting 

counterparties discovering an error or 

omission would be required to notify 

the reporting counterparty, who in turn 

would be required to report them to the 

SDR. 

F. Overview of Comments Received 

The Commission received 12 

comment letters in response to its 

proposal. Commission staff also held 

three public roundtables relating to 

swap data reporting, on September 14, 

2010, January 28, 2011, and June 6, 

2011, which provided input from a 

broad cross-section of industry and 

private sector experts concerning issues 

relating to the NOPR. Comments are 

addressed in the discussion below. 

Some comments received by the 

Commission requested further 

clarification relating to definitions 

provided in the NOPR, or regarding the 

application of NOPR provisions in 

various contexts. Additional or 

modified definitions included in the 

final rule are provided for clarification 

and do not impose new substantive 

requirements. 

II. Part 46 of the Commission’s 

Regulations 

New part 46 contains provisions 

governing swap data recordkeeping and 

reporting for pre-enactment swaps and 

transition swaps. Definitions are set 

forth in § 46.1. Section 46.2 establishes 

swap recordkeeping requirements for 

swap counterparties subject to the 

Commission’s jurisdiction. Section 46.3 

establishes swap data reporting 

requirements. Required use of unique 

identifiers in swap data recordkeeping 

and reporting for historical swaps is 

addressed in § 46.4. Determination of 

which counterparty must report swap 

data for each swap is established by 

§ 46.5. Third-party facilitation of swap 

data reporting is addressed by § 46.6. 

Section 46.7 establishes requirements 

for reporting all data concerning a swap 

to a single SDR. Section 46.8 addresses 

data reporting for swaps in a swap asset 

class not accepted by any SDR. Section 

46.9 addresses voluntary supplemental 

reporting. Section 46.10 establishes 

required data standards for swap data 

reporting. Finally, § 46.11 sets forth 

requirements for reporting concerning 

errors and omissions in previously 

reported swap data. 

A. Recordkeeping Requirements 

1. Proposed Rule 

For historical swaps in existence on 

or after April 25, 2011, the NOPR 

imposed 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. They would also be required to 

keep records of a confirmation of their 

swaps if they had that information in 

their possession on or after April 25, 

2011, the date from which public notice 

of specific recordkeeping requirements 

for historical swaps was available. In 

parallel with the proposed rules in part 

45 of this chapter, the NOPR also called 

for counterparties to such swaps to keep 

copies of any master agreement or credit 

support agreement pertaining to the 

swap, if such copies were in the 

counterparty’s possession on or after 

April 25, 2011. For a historical swap in 

existence on or after April 25, 2011, that 

remains in existence after the applicable 

compliance date, counterparties would 

also be required to keep for that swap 

any records required by § 45.2 of this 

chapter, to the extent that such records 

are created by or become available to the 

counterparty on or after the compliance 

date. 

For a pre-enactment swap expired or 

terminated prior to April 25, 2011, the 

NOPR called for counterparties to keep 

the information and documents relating 

to the terms of the swap that were 

possessed by the counterparty on or 

after October 15, 2010, the publication 

date for the Interim Final Rule For PreEnactment Swaps. For a transition swap 

expired or terminated prior to April 25, 

2011, the NOPR called for 

counterparties to keep the information 

and documents relating to the terms of 

the swap that were possessed by the 

counterparty on or after December 17, 

2010, the date of publication of the 

Interim Final Rule For Transition 

Swaps. For all such historical swaps, 

the NOPR provided that counterparties 

could retain this information in the 

format in which it existed on or after the 

relevant Interim Final Rule publication 

date, or in such other format as the 

counterparty chooses to retain it. 

For all historical swaps, the NOPR 

called for retention of required records 

through the life of the swap and for five 

years following its termination. Records 

kept by SDs and MSPs would be 

required to be readily accessible through 

the life of the swap and for two years 

following its termination, and 

retrievable within three business days 

during the remainder of the retention 

period. Records kept by non-SD/MSP 

counterparties would be required to be 

retrievable within three business days 

throughout the retention period. 

2. Comments Received 

a. Recordkeeping for historical swaps 

in existence on or after April 25, 2011. 

The Coalition of Physical Energy 

Companies (‘‘COPE’’) and the Electric 

Trade Association (‘‘ETA’’) supported 

limiting the records required for 

historical swaps in existence on or after 

April 25, 2011, to minimum PET data 

and related documentation as proposed. 


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Both these commenters stated that such 

data includes commercially relevant 

terms typically retained by most swap 

counterparties, although both noted that 

small entities involved in few swaps 

might not retain all such data. COPE 

also stated that requiring a counterparty 

to keep records of ‘‘all terms’’ of any 

confirmation in its possession is too 

vague, and that a counterparty could not 

be sure of meeting a requirement to keep 

records of any modification of a master 

or credit support agreement. The 

International Swaps and Derivatives 

Association (‘‘ISDA’’) stated that the 

scope and nature of the required 

minimum PET data, particularly time of 

trade data for credit swaps, could 

require some retroactive data creation. 

The Financial Services Roundtable 

(‘‘FSR’’) noted that its members might 

not necessarily have all the specified 

minimum PET data, particularly in the 

context of mergers or identification of 

settlement agents for historical currency 

swaps. 

b. Recordkeeping for historical swaps 

expired prior to April 25, 2011. ISDA 

noted that, for historical swaps expired 

prior to April 25, 2011, the proposed 

rule did not require parties to alter the 

format in which they already retain 

records, and requested clarification 

concerning whether this conflicted with 

the NOPR’s general requirement for 

records to be kept in a form and manner 

acceptable to the Commission. ISDA 

argued that reporting counterparties 

whose current recordkeeping format 

would not enable making records 

electronically accessible in real time 

should not have to meet this 

accessibility requirement for historical 

swaps already reported to a repository 

that registers as an SDR. ISDA further 

recommended that SDs and MSPs not be 

required to keep records readily 

accessible during the first two years of 

the five years following termination of 

the swap, but instead that they should 

be required to make such records 

accessible within a reasonable time 

during the five years following 

termination of the swap. The Working 

Group of Commercial Energy Firms 

(‘‘WGCEF’’) requested clarification that 

keeping records in the form in which 

they are already retained would be 

acceptable to the Commission for all 

historical swaps, and requested that its 

members be required to make records 

available within three business days 

throughout the retention period. COPE 

stated that the requirement for 

counterparties to keep whatever 

information and documents they have 

relating to the terms of a historical swap 

expired before April 25, 2011, is too 

vague and overbroad, and asked that the 

requirement be limited to only the PET 

data listed in the NOPR Appendix. 

c. Records relating to credit support 

agreements. With respect to the NOPR 

requiring for counterparties to keep 

records of credit support agreements or 

‘‘equivalent documentation relating to 

the swap,’’ WGCEF commented that the 

term ‘‘equivalent documentation’’ was 

overbroad, and asked for clarification of 

what constitutes such documentation. 

3. Final Rule 

a. Recordkeeping for historical swaps 

in existence on or after April 25, 2011. 

The Commission has considered all of 

the comments, including the comments 

stating that most counterparties to 

historical swaps will have records of the 

commercially relevant, limited set of 

minimum PET data called for in the 

NOPR. It has also considered the 

comments stating that all counterparties 

to historical swaps in existence on or 

after April 25, 2011, and particularly 

smaller counterparties not involved in 

large numbers of swaps, might not have 

records of all such terms for each such 

swap in which they were a 

counterparty, and the comments noting 

the undesirability of retroactive creation 

or recreation of records concerning 

historical swaps, particularly records of 

execution times, which some 

counterparties may not have. In light of 

these considerations, and in order to 

limit burdens on counterparties to the 

extent consistent with the minimum 

information the Commission will need 

concerning historical swaps, the 

Commission has determined that the 

final rule will require counterparties to 

historical swaps in existence on or after 

April 25, 2011 (the date on which 

publication of the NOPR provided 

notice of what records would be 

required) to keep records of all 

information specified in the minimum 

PET data tables included in Appendix 1 

which was in their possession on or 

after April 25, 2011. The NOPR 

provided that a counterparty to such a 

swap must keep records of confirmation 

terms, and of master or credit support 

agreements and modifications thereto, 

only if such records are in the 

possession of the counterparty on or 

after April 25, 2011. The Commission 

does not believe this requirement is 

unclear or unduly burdensome, and has 

determined that it should be retained in 

the final rule. 

b. Recordkeeping for historical swaps 

expired prior to April 25, 2011. The 

Commission has considered these 

comments, and has determined that the 

final rule should retain the NOPR 

provisions concerning limited 

recordkeeping for historical swaps 

expired prior to April 25, 2011, which 

required counterparties to keep only the 

information and documents concerning 

such swaps that were in their 

possession on or after the date of the 

applicable Interim Final Rule. The final 

rule provides that counterparties may 

keep these records in any format they 

choose. The final rule calls for all 

counterparties to historical swaps 

expired prior to April 25, 2011 to be 

able to retrieve such records within five 

business days throughout the retention 

period, rather than requiring 

counterparties to keep the records 

readily accessible for part of the 

retention period or to be able to retrieve 

records within three business days, as 

provided in the NOPR. This reduced 

retrievability requirement is designed to 

mitigate costs for counterparties to 

historical swaps expired prior to April 

25, 2011, while achieving the same 

regulatory objective. 

c. Records relating to credit support 

agreements. The Commission has 

considered the comment requesting 

clarification of the meaning of 

‘‘equivalent documentation’’ in the 

context of records of credit support 

agreements for historical swaps. The 

Commission recognizes that, while 

some swap counterparties may enter 

into credit support agreements, others 

may enter into other agreements that 

fulfill the same function. The 

Commission believes that records of 

such agreements can be important for 

market supervision and enforcement 

purposes as well as for prudential 

supervision. To clarify the intent of the 

rule in this regard, the final rule 

eliminates the phrase ‘‘equivalent 

documentation,’’ and addresses records 

of credit support agreements or other 

agreements between counterparties 

having the same function as a credit 

support agreement. 

B. Swap Data Reporting 

1. Proposed Rule 

a. Reporting for historical swaps in 

existence on or after April 25, 2011. For 

each pre-enactment or transition swap 

in existence on or after April 25, 2011, 

the NOPR called for an initial data 

report on the applicable compliance 

date; and, if the swap has not expired 

or been terminated as of the compliance 

date, for ongoing reporting of required 

swap continuation data, as defined in 

part 45 of this chapter, during the 

remaining existence of the swap. 

The NOPR called for the initial data 

report for such swaps to include either 

all of the minimum primary economic 

terms specified in the NOPR Appendix, 


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33The NOPR also called for later reporting of the 

LEI of the non-reporting counterparty, after that LEI 

was obtained as provided in the NOPR. 

or all of the terms of the confirmation 

of the swap if those terms include all of 

the minimum primary economic terms 

specified in the NOPR Appendix. It also 

called for the initial data report to 

include: the LEI of the reporting 

counterparty and the internal identifier 

used by the automated systems of the 

reporting counterparty to identify the 

non-reporting counterparty; 33 the 

internal transaction identifier used by 

the automated systems of the reporting 

counterparty to identify the swap; and 

the internal master agreement identifier 

(if any) used by the automated systems 

of the reporting counterparty to identify 

the master agreement governing the 

swap. 

Where the reporting counterparty has 

reported any of the information required 

as part of the initial data report to a 

trade repository prior to the applicable 

compliance date, if that repository has 

registered as an SDR by the compliance 

date the NOPR provided that the 

reporting counterparty would not be 

required to report such previously 

reported information again, and would 

be required to report only such initial 

data report information as had not been 

previously reported. 

With respect to continuation data 

reporting, the NOPR followed the 

proposed rules for part 45 of this 

chapter in calling for continuation data 

reporting to follow the life cycle 

approach for credit swaps and equity 

swaps, and the snapshot approach for 

interest rate swaps, currency swaps, and 

other commodity swaps. Where the 

snapshot approach was required, the 

NOPR called for SD and MSP reporting 

counterparties to report all continuation 

data required under part 45, but limited 

such reporting by non-SD/MSP 

reporting counterparties to the data 

elements in the PET data tables in the 

Appendix to part 46 in cases where they 

did not possess all continuation data 

specified in part 45 on the compliance 

date. 

b. Reporting for historical swaps 

expired or terminated prior to April 25, 

2011. For historical swaps expired or 

terminated prior to April 25, 2011, the 

NOPR proposed only a single data 

report, made on the applicable 

compliance date. In the case of a preenactment swap, this report would 

include such information relating to the 

terms of the swap as was in the 

reporting counterparty’s possession on 

or after October 14, 2010, the date of 

publication of the Interim Final Rule for 

Pre-Enactment Swaps. In the case of a 

transition swap, this report would 

include such information relating to the 

terms of the swap as was in the 

reporting counterparty’s possession on 

or after December 17, 2010, the date of 

publication of the Interim Final Rule for 

Transition Swaps. In both cases, the 

information would be permitted to be 

reported via any method or in any 

format selected by the reporting 

counterparty. 

2. Comments Received 

a. PET data for historical swaps. 

Commenters made a number of 

suggestions with respect to the PET data 

required to be reported for historical 

swaps in existence on or after April 25, 

2011. Commenters generally viewed the 

NOPR requirement for reporting a 

specified, limited set of minimum PET 

data for historical swaps as reasonable, 

since they believed the specified PET 

data elements reflect the commercially 

relevant terms typically retained by 

swap counterparties. However, ETA, 

WGCEF, ISDA, and the Global Foreign 

Exchange Division (‘‘Global Forex’’) 

recommended that the requirement to 

report PET data should be limited to the 

data elements in the minimum PET data 

tables that are in the possession of the 

reporting counterparty. They argued 

that some counterparties, particularly 

smaller counterparties that may not 

trade swaps frequently, may not have 

captured or retained all of the specified 

data elements. 

Three commenters, ISDA, ETA, and 

WGCEF, requested that the Commission 

drop the catch-all category of ‘‘any other 

primary economic term’’ verified or 

matched by the counterparties from the 

required PET data for historical swaps, 

arguing that it would be better to define 

PET data precisely for historical swaps. 

ETA stated that requiring such 

information could require extensive text 

submissions of non-standardized 

transaction terms, complicating the 

compilation task of the SDRs. 

Both ISDA and Global Forex 

requested that the Commission not 

require reporting the time of trade for a 

historical swap, arguing that in many 

cases counterparties may not have 

recorded this information when a 

historical swap was executed. 

ISDA recommended that the PET data 

tables should not include indications of 

whether either or both counterparties 

are SDs or MSPs, arguing that if the SDR 

already has this information from 

registration, it would be simpler and 

more reliable for this indication to be 

centrally supplied by the SDR. ISDA 

requested that reporting counterparties 

be permitted to report the legally 

binding record already present in an 

existing trade repository (called a ‘‘gold 

record’’ by some existing trade 

repositories), in lieu of reporting the 

required minimum PET data. 

b. Master agreement identifiers. ISDA, 

ETA, Global Forex, and WGCEF 

recommended eliminating the 

requirement to report master agreement 

identifiers. Global Forex noted that 

providing this data would impose a 

significant burden because such 

information is not routinely stored on 

the same systems as the other PET data 

specified in the tables. WGCEF argued 

that counterparties are in the best 

position to make exposure calculations 

and that the Commission already has 

the ability to request such information 

from them. The Coalition of Derivative 

End-Users (‘‘End-User Coalition’’) 

requested that the Commission explain 

the use and value of reporting master 

agreement identifiers. 

c. Continuation data reporting. ETA 

requested that non-SD/MSP reporting 

counterparties not be required to report 

continuation data, arguing that 

transactions not involving SDs and 

MSPs represent only a small portion of 

the swaps market, and that such a 

requirement would be unduly 

burdensome. Alternatively, ETA asked 

that non-SD/MSP reporting 

counterparties be permitted to report 

continuation data for historical energy 

swaps on a quarterly basis. 

d. Electronic images of swap 

documentation. WGCEF disagreed with 

the Commission’s proposed prohibition 

on the electronic transmission of an 

image of a document to satisfy the 

electronic reporting requirements of the 

proposed rule, arguing that by 

prohibiting the use of images for 

reporting, the Commission is effectively 

requiring market participants to rely on 

more burdensome, costly, and less 

efficient means of gathering and 

submitting required data to SDRs. 

WGCEF asked the Commission to allow 

reporting counterparties to submit 

images of confirmations and other paper 

swap documentation in lieu of 

submission of normalized data in data 

fields. 

e. Reporting of data beyond specified 

PET data. WGCEF requested that 

reporting counterparties be permitted to 

report data beyond the data required in 

the proposed rules, including all data 

pertaining to the swap if that is less 

burdensome for the reporting 

counterparty, as long as the data 

required by the proposed rules is 

included in the data reported. 

f. Reporting by both counterparties to 

a swap. WGCEF asked the Commission 

to allow both counterparties to a 

historical swap report the data to an 


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35208 Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Rules and Regulations 

34WGCEF also stated that dual reporting may be 

necessary if the Commission has not issued a final 

rule on entity definitions before data reporting 

begins, since in that event counterparties would be 

unable to determine which of them has the 

obligation to report. The compliance dates 

established in parts 45 and 46 for swap data 

reporting eliminate this issue, since the initial 

compliance date will be the later of July 16, 2012 

or 60 days after issuance of entity and product 

definitions. 

35Commodity Futures Trading Commission and 

Securities and Exchange Commission, Joint Study 

on the Feasibility of Mandating Algorithmic 

Descriptions for Derivatives, April 7, 2011, available 

at http://www.sec.gov/news/studies/2011/719bstudy.pdf. 

36The final part 45 rules, which apply to 

continuation data reporting for uncleared historical 

swaps, extend and phase in continuation data 

reporting for non-SD/MSP counterparties in order 

to reduce burdens to the extent consistent with the 

purposes of such reporting. 

37Section 46.3(a)(2) of this final rule provides 

that ‘‘For each uncleared pre-enactment or 

transition swap in existence on or after April 25, 

2011, throughout the existence of the swap 

following the compliance date, the reporting 

counterparty must report all required swap 

continuation data * * * .’’ This means that 

reporting counterparties for such swaps must report 

changes to primary economic terms occurring after 

the applicable compliance date. It does not require 

reporting of changes occurring after execution of the 

historical swap but prior to the compliance date. 

SDR if they so choose. WGCEF argued 

that permitting such dual reporting 

would avoid the need for counterparties 

of equal reporting hierarchy status to 

negotiate which will be the reporting 

counterparty.34

g. Safe harbor for good faith reporting. 

Global Forex asked that counterparties 

be allowed to meet their reporting and 

recordkeeping obligations on a best 

efforts basis without the need to recreate 

or report data that might have been lost. 

Global Forex expressed concerned that 

parties to FX swaps who use the SWIFT 

Accord system or use paper 

confirmations to keep records would 

need to transfer this information to new 

systems to meet the proposed reporting 

and retrieval requirements of the rules. 

It noted that in the time between the 

enactment of the Dodd-Frank Act and 

the compliance date for reporting, 

internal systems may have gone through 

a number of upgrades or migrations, 

potentially resulting in loss of 

information and thus in incomplete 

data. The Financial Services Roundtable 

(‘‘FSR’’) also requested a safe harbor for 

institutions that have complied with the 

previously issued interim-final rules by 

preserving all information on file, yet do 

not have full records for pre-enactment 

swaps. ETA also asked the Commission 

to create a safe harbor for non-financial 

entities that keep records for historical 

swaps consisting of data elements 

routinely captured prior to enactment of 

the Dodd-Frank Act, in the format in 

which they are already kept, and report 

only such data, whether or not it 

includes all of the data required by the 

final rules, without having to gather any 

required data from paper records. 

3. Final Rule 

a. PET data for historical swaps. The 

Commission has considered the 

comments stating that the minimum 

PET data proposed to be reported for 

historical swaps reflects the 

commercially relevant terms typically 

retained by swap counterparties. It has 

also considered the comments noting 

that some counterparties, particularly 

smaller counterparties that may not 

trade swaps frequently, may not have 

captured or retained all of the specified 

data elements. In order to mitigate costs 

and burdens for swap counterparties 

while achieving the same regulatory 

objective, the Commission has 

determined that the final rule will 

require reporting of all of the minimum 

primary economic terms specified in 

Appendix 1 that were in the possession 

of the reporting counterparty on or after 

April 25, 2011. The final rule will not 

require reporting of unspecified, 

additional primary economic terms 

matched or verified by the 

counterparties to such swaps. With 

respect to execution times, the final rule 

will require reporting the date of 

execution, and call for reporting the 

time of execution only if that time was 

recorded when the trade was executed 

and is known to the reporting 

counterparty on or after April 25, 2011. 

The Commission believes that the 

minimum PET data for historical swaps 

should include indications of whether 

either or both counterparties are SDs or 

MSPs, and that this information should 

be provided to SDRs. SDs and MSPs 

will register with the Commission, and 

their status will be determined by 

Commission rules. SDs and MSP will 

need to possess this information in 

order to comply with the final rule, and 

the Commission believes they will have 

automated systems capable of recording 

and reporting it. The Commission has 

also determined that the final rule will 

not provide for reporting a legally 

binding record already present in an 

existing trade repository in lieu of 

reporting the required minimum PET 

data. Both the NOPR and the final rule 

provide that reporting counterparties 

need not re-report required PET data 

already reported to an existing trade 

repository that registers with the 

Commission as an SDR prior to the 

applicable compliance date for 

reporting. 

b. Master agreement identifiers. The 

Commission has considered the 

comments recommending elimination of 

the requirement to report master 

agreement identifiers for historical 

swaps. In the final swap data reporting 

rules in part 45 of this chapter, the 

Commission has already determined 

that it should not require master 

agreement reporting in its first swap 

data reporting final rules. As noted in 

the Joint Study on the Feasibility of 

Mandating Algorithmic Descriptions for 

Derivatives released by the CFTC and 

SEC in April 2011, at present the terms 

of such agreements are not readily 

reportable in an electronic format, as 

market participants have not developed 

electronic fields representing terms of a 

master agreement.35 For these reasons, 

the Commission has determined that the 

final rule will not require reporting of 

master agreement identifiers. The 

Commission may choose to revisit this 

issue at some point in the future, if and 

when market participants and SDRs 

develop ways to represent the terms of 

such agreements electronically. 

c. Continuation data reporting. The 

Commission believes that continuation 

data reporting for uncleared historical 

swaps must be retained to enable 

regulators to monitor exposures and 

systemic risk, and to fulfill their market 

supervision and enforcement 

responsibilities.36 Quarterly reports 

concerning changes to the primary 

economic terms of such a swap would 

impede regulators’ ability to see a 

current and accurate picture of the swap 

market. To take just one example, 

delaying reporting of a partial novation 

for a quarter would give regulators an 

inaccurate picture of what 

counterparties are exposed to the swap 

for a substantial period of time. The 

Commission has therefore determined 

that the final rule will retain the NOPR 

requirements with respect to 

continuation data reporting for 

uncleared historical swaps.37

Continuation data reporting for 

cleared historical swaps in existence on 

or after April 25, 2011, is affected by the 

fact that such swaps will have been 

cleared prior to the start of reporting on 

the applicable compliance date. Part 45 

requires DCOs to report continuation 

data, including valuation data, for 

cleared swaps, and limits continuation 

data reporting by reporting 

counterparties to reporting of valuation 

data by SD or MSP reporting 

counterparties. For swaps executed after 

the applicable compliance date, 

continuation data reporting will be 

linked to the original swap through use 

of unique swap identifiers. However, 

the Interim Final Rules for preenactment and transition swaps and the 


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38Unique swap identifiers will not be available 

for such swaps. 39 If further information concerning a cleared 

historical swap is needed, the Commission will 

have ability to obtain it through its special call 

authority. 40 77 FR 2136 (January 13, 2012), at 2171. 

NOPR took the fundamental approach 

that the data reported for historical 

swaps should be the data possessed by 

those involved in originating such 

swaps. Neither the Interim Final Rules 

nor the NOPR placed an obligation on 

DCOs to report to an SDR or to be able 

to trace the link between a historical 

swap submitted for clearing on or after 

April 25, 2011, and the transactions or 

positions resulting from novation of 

such a historical swap to the clearing 

house.38 The Commission understands 

that it therefore could be problematic for 

a DCO to be able to report valuation data 

for historical swaps cleared prior to the 

applicable compliance date. In addition, 

neither the Interim Final Rules nor the 

NOPR directly addressed the effect of 

clearing on the reporting requirements 

for the swap. In light of these factors, 

and in order to reduce burdens to the 

extent consistent with the purposes of 

the Dodd-Frank Act, the Commission 

has determined that this final rule 

regarding swap data reporting for 

historical swaps will not require 

reporting of continuation data for 

cleared historical swaps. This 

determination is limited to the reporting 

of cleared historical swaps pursuant to 

part 46 and has no effect on reporting 

required under part 45. As noted above, 

all historical swaps in existence on or 

after April 25, 2011 that have been 

accepted for clearing will be reported by 

the reporting counterparty, and these 

reports will include an indication that 

the swap has been accepted for clearing 

and the identity of the DCO clearing the 

swap.39 Under part 46, a DCO will have 

no duty to make an initial data report 

for the resulting novated swaps. The 

Commission plans to further clarify how 

novated and cleared historical swaps 

should be reported under the 

Commission’s data reporting rules 

d. Electronic images of swap 

documentation. The Commission 

believes that permitting reporting to be 

limited to submission of images would 

prevent regulators from searching, 

retrieving, aggregating, and 

manipulating historical swap data in 

SDRs for essential purposes, including 

monitoring systemic risk, conducting 

market oversight and enforcement, and 

calculating block trade sizes relevant to 

real time reporting, among others. The 

NOPR proposed to reduce the reporting 

burden to the extent possible in this 

respect, by allowing submission of 

images to fulfill reporting requirements 

for historical swaps that expired prior to 

April 25, 2011. The Commission is 

adopting the rule as proposed and, in so 

doing, notes that a reporting 

counterparty that maintained 

information concerning a historical 

swap in paper form could fulfill the 

final rule electronic reporting 

requirements by entering the minimum 

PET data from a paper confirmation into 

a web interface provided by the SDR. 

e. Reporting of data beyond specified 

PET data. With respect to the comment 

requesting that reporting counterparties 

be permitted to report data beyond the 

data required by the final rule, as long 

as the required data is included in the 

data reported, the Commission notes 

that neither the NOPR nor the final rule 

bars reporting of additional data beyond 

the minimum required, provided that 

such additional data is accepted by the 

SDR to which required swap data is 

reported. The Commission also notes 

that it is a business decision of the SDR 

whether to accept such additional data. 

f. Reporting by both counterparties to 

a swap. The Commission has 

considered the comment asking that the 

final rule permit voluntary reporting for 

a historical swap by the non-reporting 

counterparty. The Commission received 

a number of comments to the same 

effect in connection with the swap data 

reporting rules in part 45 of this chapter. 

The Commission determined in part 

45 that voluntary supplement reporting 

is technologically feasible and may have 

benefits for both data accuracy and 

counterparty business processes.40 As 

noted in part 45, while the Dodd-Frank 

Act requires swap data reporting by 

only one counterparty and establishes a 

hierarchy for choosing the reporting 

counterparty, it does not prohibit 

voluntary swap data reporting to an SDR 

that supplements required reporting. 

The Commission’s final part 49 rules 

permit counterparties to access to 

information in SDRs concerning their 

own swaps, and notes that nothing 

forbids swap counterparties to use an 

SDR as a provider of third-party services 

going beyond acceptance of required 

swap data reports for regulatory 

purposes. For these reasons, the final 

rules in part 45 provide for voluntary 

supplemental reporting to any SDR by 

either counterparty of swap data that 

part 45 does not require that 

counterparty to report. 

The Commission also determined in 

part 45 that, to avoid double-counting of 

the same swap due to voluntary 

supplemental reports, and to ensure that 

data reported via a voluntary 

supplemental report (‘‘VSR’’) to the 

same SDR to which required data is 

reported is integrated into that SDR’s 

record for the swap, each VSR must 

include minimum VSR information that 

ensures achievement of these purposes. 

As provided in part 45, this required 

VSR information includes: an indication 

that the report is a VSR; the USI for the 

swap that has been created as required 

by this part; the identity of the SDR to 

which all required creation data and 

continuation data is reported for the 

swap, if the VSR is made to a different 

SDR; the LEI of the counterparty making 

the VSR; and if applicable, an indication 

that the VSR is made pursuant to the 

law of a jurisdiction outside the U.S. To 

avoid confusion and double-counting, 

and to ensure that each VSR includes 

the USI for the swap, part 45 also 

provides that a VSR may not be made 

until after the USI for the swap has been 

created as provided in § 45.5 and 

transmitted to the counterparty making 

the VSR. 

In light of these comments and 

considerations, the Commission has 

determined that the final rules in this 

part should align with part 45 and 

permit voluntary supplemental 

reporting for historical swaps in 

existence on or after April 25, 2011. The 

Commission believes, for the reasons 

noted above, and as provided in part 45, 

that appropriate safeguards are needed 

with respect to such VSRs, to avoid 

confusion and double counting with 

respect to these swaps. The final rule 

therefore provides that a VSR 

concerning a historical swap may not be 

made until after the initial data report 

required by part 46 concerning the swap 

is made. The final rule also provides 

that a VSR concerning a historical swap 

must include: an indication that the 

report is a VSR; the identity of the SDR 

to which the required initial data report 

concerning the swap has been made; the 

LEI of the counterparty making the VSR; 

and, if applicable, an indication that the 

VSR is made pursuant to the law of a 

jurisdiction outside the U.S. 

One of the safeguards provided in part 

45 is the inclusion in each VSR of the 

USI for the swap in question. SDRs are 

required by part 45 to create USIs for 

swaps with a non-SD/MSP reporting 

counterparty through what is known as 

the ‘‘name space’’ method, under which 

the first characters of each USI created 

by an SDR will consist of a unique code 

that identifies that SDR, given to the 

SDR by the Commission during the SDR 

registration process. The automated 

systems of SDRs will create an identifier 

for each historical swap reported in the 

normal course of SDR operation. Due to 

the above-mentioned requirements of 

part 45, SDRs will have the capacity to 


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35210 Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Rules and Regulations 

41The Commission is mindful in this connection 

of a comment made by TriOptima in the context of 

part 45 of this chapter concerning USIs. TriOptima 

noted that the swap market has a relatively large 

outstanding stock of transactions, some quite longdated, and a relatively thin flow of new 

transactions, and stated that having USIs for new 

transactions only would result in a long transition 

period where there are live contracts both with and 

without USIs, something TriOptima stated would 

be problematic from a technology perspective. 

TriOptima recommended the creation of USIs via 

the name-space technique as the best way to resolve 

the issue. 

42The NOPRs for both parts 45 and 46 of this 

chapter used the term ‘‘unique counterparty 

identifier’’ in this context. As explained in the final 

part 45 rule, in response to comments the 

Commission has decided to use the term ‘‘legal 

entity identifier,’’ which refers to the same 

identifier and is in common international use, in 

order to prevent confusion. 

create SDR identifiers for historical 

swaps using the name space technique. 

This would make the SDR identifiers for 

historical swaps functionally equivalent 

to USIs. The part 46 NOPR provided 

that the USI requirements of part 45 

would not apply to historical swaps, 

and the final rule retains this provision. 

To provide for historical swaps an 

essential safeguard against confusion 

and double-counting in the context of 

VSRs similar to the safeguard provided 

for swaps reported pursuant to part 45 

by USIs, the final part 46 rule requires 

that each VSR for a historical swap in 

existence on or after April 25, 2011, 

must include the SDR identifier 

assigned to the swap by the automated 

systems of the SDR to which the 

required initial data report concerning 

the swap is made. The Commission 

strongly encourages all SDRs to use the 

name space capability they are required 

to have pursuant to part 45 to create 

such SDR identifiers using the name 

space technique, making them 

functionally equivalent to USIs.41 This 

would enhance the safeguard provided 

by such SDR identifiers. 

g. Safe harbor for good faith reporting. 

The Commission has considered the 

comments which addressed possible 

safe harbor provisions. As discussed 

above, the Commission has determined 

in response to comments that the final 

rule will only require counterparties to 

historical swaps in existence on or after 

April 25, 2011, the publication date of 

the NOPR, to report specified 

information in their possession as of 

that date. The final rule will only 

require counterparties to historical 

swaps expired or terminated prior to 

April 25, 2011, to report whatever 

information was in their possession as 

of publication of the relevant Interim 

Final Rule. The Commission believes 

this is the appropriate way to address 

the fundamental concerns raised in 

these comments, which centered on 

problems that could be caused by 

requiring reporting of information not 

possessed by some counterparties and 

on the technological burdens involved. 

C. Unique Identifiers 

1. Proposed Rule 

The NOPR called for the initial data 

report for each historical swap in 

existence on or after April 25, 2011, to 

include the legal entity identifier 

(‘‘LEI’’),42 as provided in part 45 of this 

chapter, of the reporting counterparty, 

as well as the reporting counterparty’s 

internal system identifiers for the nonreporting counterparty and the 

particular swap transaction in question. 

The NOPR proposed giving the nonreporting counterparty for each such 

historical swap an additional 180 days 

after the applicable compliance date to 

obtain an LEI. Once this LEI was 

obtained, the NOPR called for it to be 

provided to the reporting counterparty 

and reported by the reporting 

counterparty to the SDR. After LEIs 

were obtained for either counterparty, 

the NOPR proposed requiring the 

counterparty identified by an LEI and 

the SDR to to comply with the LEI 

requirements of part 45 of this chapter 

with respect to LEIs. The NOPR 

provided that the LEI requirements of 

parts 45 and 46 would not apply to 

historical swaps expired or terminated 

prior to April 25, 2011. The NOPR 

proposed that the unique swap 

identifier and unique product identifier 

requirements of part 45 of this chapter 

would not apply to historical swaps. 

2. Comments Received 

a. Obtaining LEIs by the compliance 

date. The End-User Coalition, ETA, and 

ISDA raised concerns regarding whether 

counterparties will be able to obtain 

LEIs by the compliance date. ISDA 

commented that the requirement for 

reporting an LEI for each counterparty 

would require finalization of parts 45 

and 46 in advance of the compliance 

date to allow the LEI system to be built. 

In the event that LEIs are not available 

by the applicable compliance date, 

WGCEF asked that the final rule LEI 

provisions not require re-reporting a 

historical swap in order to include LEIs 

in the data for such a swap, but instead 

permit submission of a cross-referenced 

table of counterparties’ internal 

counterparty identifiers matched with 

the new LEIs. 

b. Non-SD/MSPs and LEIs. ETA asked 

that non-SD/MSP counterparties be 

placed on a compliance schedule 

separate from SDs and MSPs to allow 

time for entities to develop and 

implement the requisite systems and 

procedures to input and report 

identifiers. The End-User Coalition 

asked that non-SD/MSP counterparties 

be given at least 18 months after the 

final rule is issued to obtain LEIs, 

stating that a potential ‘‘logistical traffic 

jam’’ of entities seeking LEIs, as well as 

the currently undefined process for 

obtaining the identifiers, could make 

obtaining LEIs difficult for non-SD/MSP 

counterparties. 

3. Final Rule 

a. Obtaining LEIs by the compliance 

date. The Commission has determined 

that the final rule should maintain the 

NOPR provisions requiring use of LEIs 

in data reporting for historical swaps in 

existence on or after April 25, 2011. 

LEIs will be a crucial tool for enabling 

the Commission and other regulators to 

search, aggregate, and use the swap data 

reported to SDRs to fulfill the purposes 

of the Dodd-Frank Act. Both the NOPR 

and the final rule address concerns 

regarding whether a Commissionapproved LEI will be available by the 

compliance date by applying the 

provisions of part 45 of this chapter, 

including the provision for use of a 

substitute counterparty identifier in the 

event that an LEI is not available on the 

compliance date, until a Commissionapproved LEI is available. 

b. Non-SD/MSPs and LEIs. The 

Commission has determined that the 

final rule should maintain the NOPR 

provisions concerning LEIs for non-SD/ 

MSP counterparties. The applicable 

compliance date set in the final rule for 

non-SD/MSP counterparties is 180 days 

after the compliance date for SDs and 

MSPs, and the final rule provides an 

additional 180 days after the applicable 

compliance date for non-reporting 

counterparties to obtain an LEI. The 

Commission believe this appropriately 

addresses commenters’ concerns 

relating to obtaining LEIs for non-SD/ 

MSP counterparties. 

c. USIs and UPIs. The final rule 

retains the NOPR provision stating that 

the USI and UPI requirements of part 45 

do not apply to historical swaps. 

D. Determination of the Reporting 

Counterparty 

1. Proposed Rule 

The NOPR provided that 

determination of which counterparty is 

the reporting counterparty for a 

historical swap would be made in the 

same way provided in part 45 of this 

chapter. Counterparty reporting would 

follow the hierarchy outlined in the 


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43The Commission expects to provide 

interpretative guidance concerning determination of 

the reporting counterparty in situations where a 

historical swap was executed and submitted for 

clearing via a platform on which the counterparties 

to the swap do not know each other’s identity. 44 77 FR 22136 (January 13, 2012), at 2167. 

statute, giving SDs or MSPs the duty to 

report when possible, and limiting 

reporting by non-SD/MSP 

counterparties to situations where there 

is no SD or MSP counterparty. Where 

both counterparties have the same 

hierarchical status, the NOPR required 

them to agree as one term of their swap 

which of them is to report. Where only 

one counterparty to a historical swap is 

a U.S. person, the NOPR called for that 

counterparty to be the reporting 

counterparty. For historical swaps in 

existence as of the applicable 

compliance date, the NOPR called for 

determination of the reporting 

counterparty to be made by applying the 

above provisions to the current 

counterparties to the swap as of the 

compliance date. For historical swaps 

for which reporting is required, but 

which have terminated prior to the 

compliance date, the NOPR called for 

determination of the reporting 

counterparty to be made as of the date 

of the swap’s expiration or termination. 

2. Comments Received 

a. Non-agreement by counterparties at 

the same hierarchical level. WGCEF, 

Global Forex, ISDA, ETA, and Encana 

Marketing (‘‘Encana’’) each raised the 

issue of how to assign the reporting 

obligation in cases where counterparties 

cannot come to an agreement. ETA 

recommended that the Commission 

clarify that the parties are under no 

obligation to renegotiate the transaction 

to provide for additional consideration, 

and should structure its rules to assume 

that the transaction data will be 

reported by one or both counterparties, 

or neither. WGCEF recommended 

allowing both counterparties to report if 

they cannot agree. ISDA stated that in 

cases where the hierarchy does not 

resolve the issue, the final rules should 

designate the calculation agent as the 

reporting counterparty. Global Forex 

recommended not requiring reporting of 

historical swaps that expire prior to the 

compliance date, to reduce the number 

of instances where counterparties would 

need to agree on which of them should 

report. 

b. Date for determining counterparty 

reporting obligations. For historical 

swaps which must be reported but 

which have expired prior to the 

compliance date, the proposed 

regulations called for determining the 

reporting counterparty by applying the 

statutory reporting hierarchy to the 

parties who were counterparties to the 

swap when it expired. ISDA noted that 

it may be difficult or impossible to 

determine whether a counterparty was 

an SD or MSP as of an expiration that 

occurred before final SD or MSP 

definitions and a registration system are 

put in place, and recommended that the 

reporting counterparty for such swaps 

be determined as of the compliance 

date. 

c. Non-U.S. counterparties. The EndUser Coalition, ETA, WGCEF and ISDA 

recommended that a foreign SD or MSP 

should be the reporting counterparty for 

a historical swap in which the other 

counterparty is a U.S. non-SD/MSP. 

ISDA argued that requiring a non-SD/ 

MSP to report in circumstances where 

the counterparty is a foreign SD could 

dissuade U.S. parties from engaging in 

transactions with foreign SDs. In 

contrast, Encana supported the 

proposed rule provision requiring the 

U.S. person to be the reporting 

counterparty in circumstances where 

only one of the parties is a U.S. person. 

d. Historical swaps platform-executed 

or cleared prior to the compliance date. 

ETA recommended that the final 

regulations should provide that, if a 

reportable historical swap between nonSD/MSP counterparties was executed 

prior to the compliance date on a 

platform later registered as a SEF or 

DCM, or was cleared prior to the 

compliance date by a DCO, the SEF, 

DCM, or DCO should be required to 

make the initial data report for the 

swap, in lieu of a report by either nonSD/MSP counterparty. 

3. Final Rule 

a. Non-agreement by counterparties at 

the same hierarchical level. The 

Commission has determined that the 

final rule should substantially maintain 

the NOPR provisions concerning 

determination of the reporting 

counterparty. The Commission believes 

that requiring swap counterparties to 

agree on which of them is the reporting 

counterparty ‘‘as one term of their swap 

transaction’’ could require potentially 

problematic renegotiation of a preexisting swap agreement. Accordingly, 

the final regulations remove the phrase 

‘‘as one term of their swap transaction’’ 

from § 46.5. The final rule requires 

counterparties to a historical swap at the 

same hierarchical level to agree prior to 

the applicable compliance date on 

which of them is the reporting 

counterparty, but does not require them 

to do so as a term of the swap.43 The 

final rule follows part 45 of this chapter 

in providing an additional decision 

factor for determining the reporting 

counterparty for a swap between two 

non-SD/MSP counterparties: in such 

situations, if only one of the two nonSD/MSP counterparties is a financial 

entity as defined in the Dodd-Frank Act, 

the financial entity will be the reporting 

counterparty. The final rule addresses 

the concern raised in one comment 

about the difficulty of determining the 

reporting counterparty in the absence of 

definitions of swap dealer and major 

swap participant, by providing that the 

compliance dates on which historical 

swaps must be reported will come no 

less than 60 days after publication of 

such definitions. 

b. Date for determining counterparty 

reporting obligations. The Commission 

believes that it is prudent to determine 

the reporting counterparty for a 

historical swap as of the applicable 

compliance date where possible. The 

final rule provides that for historical 

swaps in existence as of the applicable 

compliance date, the reporting 

counterparty shall be determined by 

applying § 46.5 to the current 

counterparties as of that date. For 

historical swaps expired or terminated 

prior to the compliance date, the final 

rule requires determination of the 

reporting counterparty by applying 

§ 46.5 to the counterparties to the swap 

as of the date of its expiration or 

termination (except for determination of 

a counterparty’s status as an SD or MSP, 

which shall be determined as of the 

compliance date). 

c. Non-U.S. counterparties. The 

Commission has considered the 

comments recommending that a nonU.S. SD or MSP in a historical swap 

with a U.S. counterparty at a lower 

hierarchical level should be the 

reporting counterparty despite its status 

as a non-U.S. person. The Commission 

received a large number of similar 

comments in connection with its part 45 

rules. It determined in part 45 in 

response to those comments that, 

because non-U.S. SDs and MSPs will be 

required to register with the 

Commission in this connection, the 

Commission will have sufficient 

oversight and enforcement authority 

with respect to such counterparties.44

The Commission therefore determined 

in part 45 that, with a single exception, 

the determination of the reporting 

counterparty in situations where only 

one counterparty is a U.S. person 

should be made by applying the normal 

counterparty determination procedure. 

In cases where both counterparties are 

non-SD/MSP counterparties and only 

one counterparty is a U.S. person, part 

45 requires the U.S. person to be the 

reporting counterparty, which is 


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35212 Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Rules and Regulations 

45As discussed above at pages 31–33, the 

Commission plans to further clarify how novated 

and cleared historical swaps should be reported 

under the Commission’s data reporting rules. 

necessary in such situations because the 

non-U.S. non-SD/MSP counterparty will 

not be required to register with the 

Commission. Where neither 

counterparty to a swap executed on a 

SEF or DCM, otherwise executed in the 

U.S., or cleared on a DCO is a U.S. 

person, part 45 applies the same 

hierarchical selection criteria as for 

other swaps. In response to the 

comments on this subject made in 

connection with both parts 45 and 46, 

and for the same reasons, the 

Commission has determined that this 

final rule will follow part 45, as set forth 

above, with respect to determination of 

the reporting counterparty in this 

context. 

d. Historical swaps platform-executed 

or cleared prior to the compliance date. 

The NOPR did not call for platform 

reporting of PET data or DCO reporting 

of confirmation data with respect to 

historical swaps, but mandated 

reporting by the reporting counterparty. 

The Commission has determined that 

the final rule should maintain these 

NOPR provisions. Counterparties to 

historical swaps in existence on or after 

April 25, 2011, were put on notice by 

the NOPR to retain records of the 

minimum PET data that will be required 

to be reported for such swaps, and as 

discussed above, the final rule limits 

required reporting for such swaps to the 

specified minimum PET data in the 

possession of the reporting counterparty 

as of April 25, 2011. Such reporting by 

the reporting counterparty should 

therefore be practicable. The 

Commission believes it may be 

impracticable to require execution 

facilities or DCOs to report data for 

swaps executed or cleared by them at a 

time when they were neither required 

by a rule nor on notice pursuant to a 

notice of proposed rulemaking to retain 

data for the purpose of making such a 

report.45

E. Third-Party Facilitation of Data 

Reporting 

1. Proposed Rule 

The NOPR proposed explicit 

permission for third-party facilitation of 

data reporting with respect to historical 

swaps, without removing the reporting 

responsibility from the appropriate 

reporting counterparty. 

2. Comments Received 

The Commission received no 

comments concerning this NOPR 

provision. 

3. Final Rule 

The Commission has determined that 

the final rule should maintain this 

NOPR provision as proposed. 

F. Reporting to a Single Swap Data 

Repository 

1. Proposed Rule 

To avoid fragmentation of data for a 

given historical swap across multiple 

SDRs, the NOPR provided that all data 

for a particular historical swap must be 

reported to the same SDR to which the 

initial data report concerning the swap 

is made. 

2. Comments Received 

The Commission received no 

comments concerning this NOPR 

provision. 

3. Final Rule 

The Commission has determined that 

the final rule should maintain this 

NOPR provision as proposed. 

G. Data Reporting for Swaps in a Swap 

Asset Class Not Accepted by Any Swap 

Data Repository 

1. Proposed Rule 

As required by section 729 of the 

Dodd-Frank Act, the NOPR provided 

that if there were an asset class for 

which no SDR currently accepted data, 

registered entities or counterparties 

required to report concerning historical 

swaps in such an asset class would be 

required to report the same data to the 

Commission at a time and in a form and 

manner determined by the Commission. 

2. Comments Received 

The Commission received no 

comments concerning this NOPR 

provision. 

3. Final Rule 

The Commission determined in part 

45 that, in this circumstance, data 

should be reported at times announced 

by the Commission and in an electronic 

format acceptable to the Commission. 

Part 45 delegates to the Commission’s 

Chief Information Officer the authority 

to determine such times and formats. 

Since the part 46 NOPR called for 

reporting in this context at a time and 

in a form and manner determined by the 

Commission, the final rule must specify 

the Commission’s requirements in these 

respects. The Commission has 

determined that, for historical swaps in 

existence on or after April 25, 2011, the 

final rule should provide, in parallel 

with part 45, that in this circumstance, 

data must be reported at times 

announced by the Commission and in 

an electronic format acceptable to the 

Commission. The final rule delegates to 

the Commission’s Chief Information 

Officer, also in parallel with part 45, the 

authority to determine such times, and 

to determine with respect to historical 

swaps in existence on or after April 25, 

2011, the electronic format for making 

the report. For historical swaps expired 

or terminated as of that date, the final 

rule permits reporting in any format 

chosen by the reporting counterparty. 

H. Required Data Standards 

1. Proposed Rule 

The NOPR required reporting 

counterparties for historical swaps to 

use the facilities, methods, or data 

standards provided or required by the 

SDR to which the counterparty reports 

swap data. 

2. Comments Received 

The Commission received no 

comments concerning this NOPR 

provision. 

3. Final Rule 

The Commission has determined that 

the final rule should maintain these 

NOPR provisions as proposed. 

I. Reporting of Errors and Omissions in 

Previously Reported Data 

1. Proposed Rule 

The NOPR required reporting 

counterparties to report any errors or 

omissions in reported data, in the same 

format as the original data report, as 

soon as technologically practicable after 

their discovery. Non-reporting 

counterparties discovering an error or 

omission would be required to notify 

the reporting counterparty, who in turn 

would be required to report them to the 

SDR. 

2. Comments Received 

The Commission received no 

comments concerning this NOPR 

provision. 

3. Final Rule 

The Commission has determined that 

the final rule should maintain these 

NOPR provisions as proposed. 

J. Compliance Dates 

1. Proposed Rule 

The proposed rules require swap data 

reporting for historical swaps to 

commence on the compliance date 

specified in the Commission’s final 

swap data recordkeeping and reporting 

regulations in part 45. 

2. Comments Received 

a. Compliance date on which 

reporting begins. Due to the dependence 


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46 76 FR 22833. 

47 29 U.S.C. 1106. 

48 47 FR 18618 (Apr. 30, 1982). 

49Additionally, the Commission is required to 

exempt from designation entities that engage in a 

de minimis level of swaps. Id. at 18619. 

50 47 FR at 18620. 

51CEA section 2(e) provides that ‘‘It shall be 

unlawful for any person, other than an eligible 

contract participant, to enter into a swap unless the 

swap is entered into on, or subject to the rules of, 

a board of trade designated as a contract market 

under section 5.’’ Congress created the ECP category 

in the Commodity Futures Modernization Act in 

2000, to include individuals and entities that 

Congress determined to be sufficiently 

sophisticated in financial matters that they should 

be permitted to trade over-the-counter swaps 

without the protection of federal regulation. See, 

e.g., ‘‘Report of the President’s Working Group on 

Financial Markets’’ (Nov. 1999) at 16 

(recommending that ‘‘sophisticated counterparties 

that use OTC derivatives simply do not require the 

Continued 

of part 46 on other rulemakings, 

especially final rules defining ‘‘swap,’’ 

‘‘swap dealer,’’ and ‘‘major swap 

participant,’’ several commenters 

requested that Part 46 compliance and 

implementation take place on a 

staggered basis that takes the need for 

such definitions into account. 

Commenters stated that differences 

between asset classes with respect to 

both existing automation and existing 

data normalization are significant and 

should also be taken into account. 

Commenters made several specific 

recommendations concerning 

compliance dates and phasing also 

made by them in connection with part 

45, which the Commission has already 

considered and addressed in part 45, 

and will not address again here. 

b. Using the same compliance dates 

for parts 45 and 46. WGCEF stated that 

the compliance date on which the initial 

data report for historical swaps must be 

made should not be the same 

compliance date provided for the 

beginning of swap data reporting 

pursuant to part 45, in order to avoid 

subjecting SDRs to a logjam of data on 

that date, and advocated setting the part 

46 compliance date for historical swap 

data reporting somewhat earlier than the 

part 45 compliance date. 

3. Final Rule 

a. Compliance date on which 

reporting begins. The Commission 

believes that the compliance dates for 

swap data reporting under part 46 

should take into account the need for 

Commission definitions of ‘‘swap,’’ 

‘‘swap dealer,’’ and ‘‘major swap 

participant.’’ The Commission also 

believes that the compliance dates for 

swap data reporting should take both 

asset class differences and the needs of 

non-SD/MSP reporting counterparties 

into account. As set forth in part 45, the 

compliance dates established in part 45 

phase in compliance dates in both these 

respects. Accordingly, the Commission 

has determined that this final rule will 

maintain the NOPR provision setting the 

same compliance dates for both parts 45 

and 46. The Commission believes that 

these compliance dates strike the 

appropriate balance between the need 

for swaps data by the Commission 

charged with achieving the purposes of 

the Dodd-Frank Act and potential costs 

and burdens that may be imposed on 

market participants. 

b. Using the same compliance dates 

for parts 45 and 46. Since automated 

systems for swap data reporting must be 

developed, tested, and used for 

reporting with respect to both historical 

and new swaps, the Commission 

believes that setting the same 

compliance dates for data reporting in 

both part 45 and part 46, as provided in 

the proposed rules, remains appropriate. 

However, the Commission recognizes 

that having some initial data reporting 

for historical swaps pursuant to part 46 

precede the start of data reporting for 

new swaps pursuant to part 45 could 

have the practical benefit of reducing 

the volume of data SDRs would have to 

receive on a single day if data reporting 

for all historical swaps as well as new 

swaps began on the same date. In light 

of comments and these considerations, 

the final rule will permit voluntary 

initial data reporting for historical 

swaps prior to the applicable 

compliance date, if a registered SDR is 

prepared to accept the initial data report 

required by this part prior to the 

applicable compliance date. Where such 

a voluntary early initial data report is 

made, continuation data reporting for 

the swap in question will still be 

required to commence as of the 

applicable compliance date. 

III. Related Matters 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

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

that agencies consider the impact of 

their rules on ‘‘small entities.’’ As 

provided in the NOPR, this part will 

have a direct effect on SDs, MSPs, and 

non-SD/MSP counterparties who are 

counterparties to one or more preenactment or transition swaps and 

subject to the Commission’s 

jurisdiction. 

As stated in the NOPR,46 the 

Commission proposed that certain 

entities for which the Commission had 

not previously made a determination for 

RFA purposes—namely SDs, and 

MSPs—should not be considered to be 

small entities, for reasons set forth in 

the NOPR. 

As noted in the NOPR, this part 

requires limited swap data reporting by 

a non-SD/MSP counterparty regarding 

pre-enactment and transition swaps 

only with respect to the swaps in which 

neither counterparty is an SD or MSP. 

With respect to such swaps, which 

represent a minority of swap 

transactions, only one of the swap nonSD/MSP counterparties will be required 

to report—the counterparty designated 

as the reporting counterparty. In 

addition, the Commission has 

determined that the final rule provides 

that for swaps between non-SD/MSP 

counterparties where only one 

counterparty is a ‘‘financial entity’’ as 

defined in CEA section 2(h)(7)(C), the 

financial entity shall be the reporting 

counterparty. As the NOPR noted, 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.47

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.48 Like 

FCMs, SDs will be subject to minimum 

capital and margin requirements and are 

expected to comprise the largest global 

financial firms.49 Similarly, with respect 

to MSPs, the Commission has 

previously determined that large traders 

are not ‘‘small entities’’ for RFA 

purposes.50 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. 

For these reasons, the Commission 

does not believe that the regulations 

would have a significant economic 

impact on a substantial number of small 

entities. The Commission believes these 

provisions of the final rule reduce the 

economic impact on any non-SD/MSP 

counterparties that may be considered 

to be small entities under the RFA. 

Due to the operation of certain 

provisions of the CEA and the final rule, 

non-SD/MSP counterparties who may 

be considered small entities for RFA 

purposes are never required to report 

any swap creation data. Under the CEA, 

a non-SD/MSP counterparty is required 

to transact on a SEF or DCM unless that 

non-SD/MSP is an Eligible Contract 

Participant (‘‘ECP’’).51 The Commission 


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35214 Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Rules and Regulations 

same protections under the CEA as those required 

by retail investors’’). In the Dodd-Frank Act, 

Congress made two changes to the statutory ECP 

definition, both of which increased the thresholds 

to qualify as an ECP, making it harder for some 

entities and individuals to qualify. Compare CEA 

section 1a(12), 7 U.S.C. 1a(12) (2009), with 

§§ 721(a)(1) and (9) of the Dodd-Frank Act, 

respectively redesignating section 1a(12) as section 

1a(18) and increasing thresholds for certain 

categories of ECP. 

52 66 FR 20740, 20743, Apr. 25, 2001. 53 44 U.S.C. 3301 et. seq. 

54These wage estimates are derived from an 

industry-wide survey of participants and thus 

reflect an average across entities; the Commission 

notes that the actual costs for any individual 

company or sector may vary from the average. The 

Commission estimated the dollar costs of hourly 

burdens for each type of professional using the 

following calculations: 

(1) [(2009 salary + bonus) * (salary growth per 

professional type, 2009–2010)] = Estimated 2010 

total annual compensation. The most recent data 

provided by the SIFMA report describe the 2009 

total compensation (salary + bonus) by professional 

type, the growth in base salary from 2009 to 2010 

for each professional type, and the 2010 base salary 

for each professional type; thus, the Commission 

estimated the 2010 total compensation for each 

professional type, but, in the absence of similarly 

granular data on salary growth or compensation 

from 2010 to 2011 and beyond, did not estimate 

dollar costs beyond 2010. 

(2) [(Estimated 2010 total annual compensation)/ 

(1,800 annual work hours)] = Hourly wage per 

professional type.] 

(3) [Hourly wage) * (Adjustment factor for 

overhead and other benefits, which the Commission 

has estimated to be 1.3)] = Adjusted hourly wage 

per professional type.] 

(4) [(Adjusted hourly wage) * (Estimated hour 

burden for compliance)] = Dollar cost of compliance 

for each hour burden estimate per professional 

type.] 

has previously determined that ECPs are 

not ‘‘small entities’’ for RFA purposes.52

For all swaps executed on a SEF or 

DCM, the final rule requires the SEF or 

DCM to report all required swap 

creation data. Therefore, no ‘‘small 

entities’’ for RFA purposes are required 

to report any swap creation data under 

the final rule. 

In the NOPR, the Chairman, on behalf 

of the Commission, certified that the 

rulemaking would not have a significant 

economic effect on a substantial number 

of small entities. Nonetheless, the 

Commission specifically requested 

comment on the impact these proposed 

rules may have on small entities. The 

Commission received one comment on 

its RFA statement, from the Electric 

Coalition, stating that the vast majority 

of members of the National Rural 

Electric Cooperative Association and the 

American Public Power Association are 

considered small entities for purposes of 

the RFA. The Electric Coalition 

recommended that the Commission 

should consider the overall impact of its 

Dodd-Frank Act rules on nonfinancial 

entities, including small entities, and 

conduct a comprehensive analysis 

under the RFA. 

In response to this comment, and to 

other comments by non-SD/MSP 

counterparties, the Commission has 

adjusted the final reporting regime to 

reduce burdens and costs for non-SD/ 

MSP counterparties in a variety of ways, 

as set forth in detail in the discussion 

above concerning §§ 45.3 and 45.4 of the 

final rule. The Commission notes that 

the commenter did not dispute the 

reasons for the Commission’s 

conclusion that this part does not have 

a significant impact on a substantial 

number of small entities. For these 

reasons, and for the reasons stated above 

and in the NOPR, the Commission 

continues to believe that this part will 

not have a significant impact on a 

substantial number of small entities. 

Therefore, the Chairman, on behalf of 

the Commission, hereby certifies, 

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

part as finally adopted will not have a 

significant economic impact on a 

substantial number of small entities. 

B. Paperwork Reduction Act 

1. Introduction 

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 issued by the Office of 

Management and Budget (‘‘OMB’’). 

Provisions of Commission Regulations 

46.2, 46.3, 46.4, 45.8, 45.10 and 45.11 

result in information collection 

requirements within the meaning of the 

Paperwork Reduction Act (‘‘PRA’’).53

The Commission submitted the NOPR 

and supporting documentation to OMB 

for review in accordance with 44 U.S.C. 

3507(d) and 5 CFR 1320.11. The 

Commission requested that OMB 

approve, and assign a new control 

number for, the collections of 

information covered by the NOPR. 

The title for the proposed collection 

of information under part 46 is ‘‘Swap 

Data Recordkeeping and Reporting: PreEnactment and Transition Swaps.’’ The 

OMB has assigned this collection 

control number 3038–0089. The 

responses to this new collection of 

information are 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. 

2. Need for Information Collection 

To the extent that the recordkeeping 

and reporting requirements in this 

rulemaking overlap with the 

requirements of other rulemakings for 

which the Commission prepared and 

submitted an information collection 

request to OMB, the burdens associated 

with those requirements are not being 

accounted for in the information 

collection request for this rulemaking, to 

avoid unnecessary duplication of 

information collection burdens. 

The collection of information under 

these regulations is necessary to 

implement certain provisions of the 

CEA, as amended by the Dodd-Frank 

Act. Specifically, it is essential to 

reducing risk, achieve market 

transparency, and for market 

supervision purposes for which the 

Dodd-Frank Act was enacted. Such data 

will be needed to give the Commission 

a complete picture of the swap market. 

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. 

3. Comment on Proposed Information 

Collection 

The Commission invited the public 

and other federal agencies to comment 

on any aspect of the reporting and 

recordkeeping burdens estimates. There 

was one comment from Encana relating 

to the collection of information 

estimates. Encana commented that the 

10 hour one-time burden estimate in the 

proposal for non-reporting entities was 

too low. The Commission addresses this 

and other related comments as follows. 

Under the final rules, the Commission 

has revised its estimates provided for in 

the proposal for reporting entities and 

persons who will provide information 

under sections 46.2, 46.3, 46.4, 45.8, 

45.10 and 45.11 of this part. The 

information provided under each 

regulation is set forth below, together 

with burden estimates that were 

calculated, through research and 

through consultation with the 

Commission’s technology staff, using 

wage rate estimates based on salary 

information for the securities industry 

compiled by the Securities Industry and 

Financial Markets Association 

(‘‘SIFMA’’).54


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The sum of each of these calculations for all 

professional types involved in compliance with a 

given element of the final rule represents the total 

cost for each counterparty, reporting counterparty, 

SD, MSP, SEF, DCM, or SDR, as applicable to that 

element of the final rule. 

55These are one-time recordkeeping costs, which 

necessarily take place in the period prior to the 

compliance date; therefore, the applicable 

recordkeeping burden applies during the period 

between the publication date and compliance date 

of Part 46, rather than the one year noted in the 

proposal. 

56The proposed rule estimated an average onetime per-entity burden of 40 hours (for SD/MSP 

reporting counterparties) and 10 hours (for non-SD/ 

MSP counterparties). These estimates have been 

revised following additional research by OCE staff 

and consultation with staff in the Commission’s 

Office of Data and Technology. 

57The Commission estimates that the percentage 

of non-SD/MSP counterparties that will contract 

with a third-party service provider to perform this 

function will likely be very low, given that the 

Commission has estimated that the recordkeeping 

requirements of section 46.2 would not impose 

costs on non-SD/MSP counterparties, which would 

not be required to manipulate, move, or update 

records, and would therefore not present a burden 

that could be more efficiently satisfied by 

contracting with a third-party service provider. 

Nevertheless, the Commission recognizes that some 

non-SD/MSP counterparties may contract with 

third-party service providers for a variety of 

regulatory compliance services, and may elect to 

engage a third-party service provider to manage its 

historical swap records, either as an individual 

service to satisfy the recordkeeping requirements of 

section 46.2, as part of a broader set of data 

management services for regulatory compliance, or 

to otherwise facilitate its own internal 

recordkeeping. 

58The Commission previously estimated that as 

many as 250 SDs and 50 MSPs would register. After 

recently receiving additional information, 

particularly a letter from Thomas Sexton, NFA 

Senior Vice President and General Counsel to Gary 

Barnett, Director of the Division of Swap Dealer and 

Intermediary Oversight, the Commission is revising 

its estimate downward. Accordingly, the 

Commission now believes that approximately 125 

Swaps Entities, including only a handful of MSPs, 

will register with the Commission as SDs or MSPs. 

59For purposes of this Paperwork Reduction Act 

analysis, the Commission estimates that ‘‘high 

activity’’ entities or persons are those who process 

or enter into hundreds or thousands of swaps per 

week that are subject to the jurisdiction of the 

Commission. Low activity users would be those 

who process or enter into substantially fewer than 

the high activity users. 

4. Recordkeeping Burdens 

Section 46.2. Under § 46.2, 

counterparties to a swap unexpired on 

or after April 25, 2011 are required to 

keep records containing minimum 

primary economic terms data, and (if 

they have them) confirmation 

documentation, master agreements, 

credit support or similar agreements, 

and any records required by § 45.2 if the 

swap remains unexpired after the 

compliance date. The final rules allow 

counterparties to keep either paper or 

electronic records as long as they are 

reportable but require swap dealers and 

major swap participants to keep 

electronic records unless their paper 

records were ‘‘originally created and 

exclusively maintained’’ in paper form. 

For historical swaps that expired prior 

to April 25, 2011, the final rules require 

that each counterparty ‘‘retain the 

information and documents relating to 

the terms of the transaction that were 

possessed by the counterparty on or 

after the publication date of the relevant 

Interim Final Rule (October 14, 2010 for 

pre-enactment swaps and December 17, 

2010 for transition swaps). They do not 

require counterparties to create or 

confirm any data that they possessed 

prior to October 14, 2010 for preenactment swaps or December 17, 2010 

for transition swaps. The Commission 

has not calculated the burden for this 

requirement to the extent the 

Commission has previously calculated 

such burden in the PRA analyses for the 

Interim Final Rules covering ‘‘preenactment swaps’’ and ‘‘transition 

swaps.’’ 

For historical swaps still in existence 

on or after April 25, 2011, the final rules 

require that records kept by swap 

dealers or major swap participants be 

readily accessible via real time 

electronic access throughout the life of 

the swap and for two years following 

termination. Following this two yearpost expiration period, the final rules 

require that records be retrievable 

within three business days ‘‘through the 

remainder of the period following final 

termination of the swap during which it 

is required to be kept.’’ For records 

maintained by non-SD/MSP 

counterparties the final rules require 

that they be retrievable within five 

business days ‘‘through the remainder of 

the period following final termination of 

the swap during which it is required to 

be kept.’’ The Commission has 

calculated the recordkeeping burden for 

the time period beginning on or after 

April 25, 2011, and ending on the 

compliance date; the burden occurring 

after the compliance date having been 

already considered in the Commission’s 

final swap data rules.55

The Commission believes that some 

percentage of the estimated 30,000 nonSD/MSP counterparties who would be 

subject to the recordkeeping 

requirements of section 46.2 would 

contract with third-party service 

providers to fulfill these requirements, 

and would therefore pay some fee to 

such providers in lieu of incurring the 

Commission’s estimated costs of 

reporting. The identity of such third 

parties, the composition of the 

marketplace for third party services, and 

the costs to third parties to provide 

recordkeeping services given the 

economies of scale and scope they may 

realize in providing those services are 

all presently unknowable. Therefore, the 

Commission does not believe it is 

feasible to quantify the fees charged by 

third parties to non-SD/MSPs at the 

present time, but believes that they will 

likely vary with the volume of records 

to be retained. The remaining non-SD/ 

MSP counterparties would elect to 

perform these functions themselves and 

incur the costs enumerated below.56 The 

Commission notes that this final rule 

allows non-SD/MSP counterparties to 

retain records in either an electronic or 

paper form, which will facilitate 

recordkeeping for less technologically 

resourced counterparties, who will 

likely choose to retain the records in the 

form in which they currently exist. For 

historical swaps still in existence on or 

after April 25, 2011, non-SD/MSP 

counterparties will already be required 

to normalize the data for those swaps to 

the minimum PET data tables, and the 

burdens associated with this task are 

addressed in the discussion of reporting 

burdens below; however, the 

recordkeeping requirements of section 

46.2 do not require non-SD/MSP 

counterparties to retroactively revise or 

recreate data for those swaps. Non-SD/ 

MSP counterparties will therefore not be 

required to manipulate, move, or update 

swap records in any way to comply with 

the recordkeeping requirements of the 

final rule; accordingly, the Commission 

believes that the recordkeeping 

requirements of this final rule will not 

impose costs on non-SD/MSP 

counterparties.57

With respect to SDs and MSPs (an 

estimated 125 entities or persons),58

which will have higher levels of swap 

recording activity 59 than non-SD/MSP 

counterparties, the Commission 

estimates that this requirement would 

impose an initial non-recurring burden 

of 335 hours per SD/MSP reporting 

counterparty at a cost of $22,172, 

equating to an aggregate estimated onetime burden of 41,875 hours at a cost of 

$2,771,500 for all SD/MSP reporting 

counterparties. The Commission also 

estimates that § 46.2 will result in 

retrieval costs for swap counterparties 

that do not currently have the ability to 

retrieve records within the required 

timeframe. The Commission expects 

that this requirement will present costs 

to registered entities and swap 

counterparties in the form of nonrecurring investments in technological 

systems and personnel associated with 

establishing data retrieval processes, 

and recurring expenses associated with 

the actual retrieval of swap data records. 

These same costs (including nonrecurring investments in technological 


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35216 Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Rules and Regulations 

60These are one-time recordkeeping costs, which 

necessarily take place in the period prior to the 

compliance date. For the purposes of this 

rulemaking, the Commission has considered only 

the one-time costs associated with recordkeeping; 

as noted in the Part 46 Consideration of Costs and 

Benefits section, the forward-looking (recurring) 

costs associated with recordkeeping are already 

covered by the recurring costs of recordkeeping 

enumerated in the Part 45 Consideration of Costs 

and Benefits section. See Final Data Rules, 77 FR 

2136, 2171. 

61The Commission obtained this estimate in 

consultation with the Commission’s information 

technology staff. 62The estimated burden hours have been adjusted 

from the proposal. The estimated burden hours 

were obtained in consultation with the 

Commission’s information technology staff. 63The estimated burden hours have been adjusted 

from the proposal. This is the estimated number of 

non-SD/MSP counterparties who will be required to 

report in a given year. Only one counterparty to a 

swap is required to report, typically an SD or a MSP 

as determined by § 45.8. Therefore, a non-SD/MSP 

counterparty that is in a swap with an SD or MSP 

counterparty will not be subject to the reporting 

obligations of §§ 45.3 and 45.4. 

64 In the event that all estimated 1,000 non-SD/ 

MSP reporting counterparties elect to perform their 

reporting functions themselves, rather than contract 

with a third-party service provider, the aggregate 

burden would be 55,000 hours at a cost of 

$4,191,000. 

systems and personnel associated with 

establishing data storage and retrieval 

systems, and recurring expenses 

associated with data storage and 

retrieval, and maintenance of data 

storage systems), however, are required 

to comply with the requirements of part 

45. Accordingly, they are not 

incremental to, and inappropriate for, 

consideration in this rulemaking.60

5. Reporting Burdens 

Sections 46.3, 46.4, 46.8, 46.10 and 

46.11. Pursuant to §§ 46.3 and 46.4, 

each historical swap in existence on or 

after April 25, 2011 will be reported to 

an SDR electronically [on or before the 

applicable compliance date], or to the 

Commission if no SDR accepts such a 

swap under § 46.8. The initial data 

report must contain all of the minimum 

primary economic terms data listed in 

Appendix 1 that were in the possession 

of the reporting counterparty on or after 

April 25, 2011, the legal entity identifier 

of the reporting counterparty, the 

internal counterparty identifier used by 

the reporting counterparty to identify 

the non-reporting counterparty, and the 

internal transaction identifier used by 

the reporting counterparty to identify 

the swap. For each such swap that 

remains in existence after the 

compliance date, the reporting 

counterparty must report swap 

continuation data as provided in part 45 

of this chapter, with the exception that 

such reports need only include changes 

to the minimum primary economic 

terms listed in Appendix 1 to this part, 

rather than changes to the larger list of 

primary economic terms provided in 

part 45. Continuation data must be 

reported to the same SDR which 

received the initial data report. In 

parallel with part 45 of this chapter, the 

final rule provides that multi-asset 

historical swaps must be reported to a 

single SDR that accepts swaps in the 

asset class that is treated as the primary 

asset class involved in the swap by the 

reporting counterparty; and provides 

that mixed historical swaps must be 

reported to an SDR or security-based 

SDR registered with both the 

Commission and the SEC. 

For historical swaps that expired prior 

to April 25, 2011, the final rules require 

that counterparties report to a SDR on 

the compliance date such information 

relating to the terms of the transaction 

as was in the counterparty’s possession 

on or after the publication date of the 

relevant Interim Final Rule (October 14, 

2010 for pre-enactment swaps and 

December 17, 2010 in the case of 

transition swaps.) This information may 

be reported via any method selected by 

the reporting counterparty. The 

Commission has not calculated the 

burden for this requirement to the 

extent the Commission has previously 

calculated such burden in the PRA 

analyses for the Interim Final Rule 

covering ‘‘pre-enactment swaps’’ and 

‘‘transition swaps.’’ 

For historical swaps still in existence 

on or after April 25, 2011, the 

Commission anticipates that the 

reporting required by §§ 46.3 and 46.4 

will to a significant extent be 

automatically completed by electronic 

computer systems; the following burden 

hours are calculated based on the 

annual burden hours necessary to 

oversee, maintain, and utilize the 

reporting functionality. SDs and MSPs 

(an estimated 125 entities or persons) 

are anticipated to have high levels of 

reporting activity; the Commission 

estimates that their average one-time 

burden may be approximately 285 hours 

per MSP or SD reporting counterparty at 

a cost of $20,169,61 equating to an 

estimated one-time aggregate burden of 

35,625 hours at a cost of $2,521,125 for 

all SD/MSP reporting counterparties. 

The Commission believes that this is a 

reasonable assumption due to the 

volume of swap transactions that will be 

processed or entered into by these 

entities, the varied nature of the 

information required to be reported, and 

the frequency with which information 

may be required to be reported.62

Non-SD/MSP counterparties who 

would be required to report—which 

presently would include an estimated 

1,000 entities 63—are anticipated to have 

lower levels of activity with respect to 

reporting. Of those 1,000 non-SD/MSPs, 

the Commission believes that a majority, 

estimated now at 75%, or 750 entities, 

will contract with third parties to satisfy 

their reporting obligations. The identity 

of such third parties, the composition of 

the marketplace for third party services, 

and the costs to third parties to provide 

reporting services given the economies 

of scale and scope they may realize in 

providing those services are all 

presently unknowable. Therefore, the 

Commission does not believe it is 

feasibly to quantify the fees charged by 

third parties to non-SD/MSPs at the 

present time, but believes that they will 

likely vary with the volume of reports 

to be made. For those estimated 250 

non-SDs/non-MSPs who are required to 

report swap transaction and pricing data 

to an SDR and do not contract with a 

third party, the Commission estimates a 

one-time burden of 55 hours per nonSD/MSP reporting counterparty at a cost 

of $4,191, equating to an aggregate 

estimated one-time burden of 13,750 

hours at a cost of $1,047,750 for all nonSD/MSP reporting counterparties that 

do not contract with a third party.64 For 

swaps unexpired on or after April 25, 

2011, the reporting counterparty shall 

obtain for itself an LEI as provided in 

§ 45.6 (or substitute LEI if applicable) 

and include such identifier in the 

relevant initial report. Within 180 days 

of the compliance date non-reporting 

counterparties must provide their LEI 

(or substitute if applicable) to the 

reporting counterparty, which then 

must report it to the relevant SDR, as set 

forth in part 45. Final § 46.5 sets forth 

the criteria for determining which 

counterparty must report. For unexpired 

swaps the provisions apply to the 

current counterparties as of the 

compliance date, notwithstanding 

whether they were the original 

counterparties. 

Final § 46.9 permits voluntary early 

submission of the initial data report 

(and of subsequent continuation data 

reports) prior to the applicable 

compliance date if a registered SDR is 

prepared to accept the reports and 

§ 46.10 require that each counterparty 

use the ‘‘facilities, methods, or data 

standards provided for or required by’’ 

the SDR to which the counterparty 

reports the data. Final § 46.11 also 

requires that corrections be reported ‘‘as 

soon as technologically practicable’’ to 

the applicable SDR in the same format 

that data was reported erroneously or 

omitted. It provides that reporting 

counterparties who report state data can 

report error corrections by updating 


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65Costs associated with reporting are already 

covered by the Part 45 rules. See Data Final Rules, 

77 FR 2136, 2171. 

66These sections established new sections 2(h)(5) 

and 4r(a)(2)(A) of the CEA, respectively. This 

rulemaking is undertaken to implement those two 

CEA sections. They are discussed in greater detail 

in section [ ], supra, including their 

interrelationship and the import of the 

Commission’s October 14, 2010 and December 17, 

2010 Part 44 interim final rules. 

67For discussion of costs of compliance with part 

45, see 77 FR 2136 (January 13, 2012) at 2176 et 

seq. 

68 7 U.S.C. 19(a). 

69 75 FR 76574 (December 8, 2010), at 76597. 

70 Id. 

71The Commission made these estimates in 

consultation with experts on its information 

technology staff through a collaborative process that 

involved determining the types of personnel needed 

to complete each aspect of the tasks necessary for 

compliance, determining the number of hours 

required of each of those personnel types, and 

comparing the burden estimates for separate tasks 

to identify and eliminate any redundancies. 

72To aid in cost estimates, the Commission at 

times has used wage rate estimates compiled by the 

Securities Industry and Financial Markets 

Association (‘‘SIFMA’’). These wage estimates are 

derived from a securities industry-wide survey of 

participants and thus reflect an average across 

entities; the Commission notes that the actual costs 

for any individual company or sector may differ. 

The Commission estimated the dollar costs of 

hourly burdens for each type of professional using 

the following calculations: 

(5) [(2009 salary + bonus) * (salary growth per 

professional type, 2009–2010)] = Estimated 2010 

total annual compensation. The most recent data 

provided by the SIFMA report describe the 2009 

total compensation (salary + bonus) by professional 

Continued 

their next daily report. Recordkeeping 

and reporting requirements that exist 

after compliance dates and those of 

§§ 46.9, 46.10 and 46.11 are covered by 

other rulemakings for which the 

Commission prepared and submitted an 

information collection request to OMB, 

the burdens associated with those 

requirements are not being accounted 

for in the information collection request 

for this rulemaking.65

C. Consideration of Costs and Benefits 

1. Introduction 

The Dodd-Frank Act’s swap reporting 

requirements apply to all swaps in 

existence on or after the date of the 

legislation’s enactment. Previously, in 

its separate Part 45 rulemaking, the 

Commission adopted final rules to 

implement the data reporting and 

recordkeeping requirements for swaps 

entered into on or after the applicable 

compliance date specified in Part 45. 

This final Part 46 rulemaking 

implements the mandate of sections 723 

and 729 of the Dodd-Frank Act 66

requiring that data be reported to SDRs 

for historical swaps. In so doing, the 

final rule specifies the Commission’s 

recordkeeping requirements with 

respect to historical swaps; and 

specifies the manner and form for 

reporting historical swap transaction 

data to an SDR, including the 

identification of entities and 

transactions through unique identifiers. 

As discussed in more detail below, 

the requirements of Part 46, working in 

tandem with Part 45, will enhance 

swaps market transparency beyond the 

level afforded by Part 45 alone; this 

enriches its value to regulators for the 

ultimate benefit of swap market 

participants and the general public. 

More specifically, the benefits of the 

improved transparency engendered by 

this rule include improved regulatory 

oversight of markets (with respect to 

surveillance, enforcement, and 

analysis); improved regulatory 

understanding of the behavior of swap 

market participants; improved 

regulatory understanding of the 

concentrations of risk in swap markets; 

and greater market integrity. In addition, 

the requirements of the regulation, in 

tandem with the requirements of Part 

45, promote the development of firmlevel infrastructure and practices wellsuited to improve market participants’ 

risk management capabilities. Further, 

market participants will be able to use 

data associated with their own historical 

swaps for which continuation data 

reporting extends past the Part 45 

compliance date to better understand 

and manage the risk associated with 

their swap exposure. 

The Commission also recognizes that 

compliance with these rules will impose 

costs. However, because certain non-SD/ 

MSP counterparties are subject to the 

Commission’s part 45 regulations, 

which impose swap data recordkeeping 

and reporting requirements similar in 

certain key respects to those of part 46, 

the Commission does not consider 

expenditures to be costs of this 

regulation if they are also required to 

comply with part 45. These 

expenditures would only constitute 

costs of this final rule, independent of 

the costs of part 45, in the case of a 

market participant that exits the swap 

market entirely immediately following 

the part 45 compliance date.67 Such an 

entity would not be required to comply 

with part 45, having no active swap data 

to report, but would still be required to 

report its historical swap data pursuant 

to part 46, because it was active during 

the pre-compliance date time period 

affected by this rule. The Commission 

cannot presently estimate the number of 

entities that may exit the swap market 

immediately after the compliance date. 

The two chief cost-driver categories in 

this final rulemaking are recordkeeping 

and reporting (including unique 

identifier requirements). For both 

categories, the Commission identifies 

the costs and benefits of the final rule, 

discusses comments regarding them, 

and considers them in relation to the 

five broad areas of market and public 

concern as required by section 15(a) of 

the CEA. 

a. Section 15(a) of the CEA 

Section 15(a) of the CEA 68 requires 

the Commission to consider the costs 

and benefits of its actions before 

promulgating a regulation under the 

CEA or issuing an order. Section 15(a) 

further specifies that the costs and 

benefits shall be evaluated in light of the 

following five broad areas of market and 

public concern: (1) Protection of market 

participants and the public; (2) 

efficiency, competitiveness, and 

financial integrity of futures markets; (3) 

price discovery; (4) sound risk 

management practices; and (5) other 

public interest considerations. 

Accordingly, the Commission considers 

is the costs and benefits resulting from 

its discretionary determinations with 

respect to the Section 15(a) factors. 

b. Cost Estimation Methodology 

In the NOPR, the Commission asked 

for public comment on the costs and 

benefits of the proposed regulations, 

and specifically invited commenters ‘‘to 

submit any data or other information 

that they may have quantifying or 

qualifying the costs and benefits’’ of the 

proposed requirements.69 The 

Commission also asked for comments 

on the overall costs and benefits of the 

proposed rules implementing the DoddFrank Act.70 The Commission received 

numerous comments addressing various 

cost and benefit considerations of the 

proposed rule, including several that 

recommended alternatives, but none 

provided data from which the costs and 

benefits of the rule could be quantified. 

Nevertheless, the Commission has 

endeavored to estimate quantifiable 

costs and benefits of the final rule where 

possible.71 Where estimation or 

quantification is not feasible, the 

Commission provides a qualitative 

assessment of the costs and benefits. 

The Part 46 final rules will affect 

three types of market participants, 

including SD/MSP counterparties, nonSD/MSP counterparties, and SDRs. To 

serve as the reference point for 

estimating the costs of these rules to 

non-SD/MSP counterparties, the 

Commission selected a non-SD/MSP 

counterparty that is not a financial 

entity as defined in CEA section 

(2)(h)(7)(C).72


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type, the growth in base salary from 2009 to 2010 

for each professional type, and the 2010 base salary 

for each professional type; using this, the 

Commission estimated the 2010 total compensation 

for each professional type. In the absence of similar 

data for 2011 and beyond, the Commission did not 

estimate dollar costs beyond 2010. 

(6) [(Estimated 2010 total annual compensation)/ 

(1,800 annual work hours)] = Hourly wage per 

professional type. 

(7) [(Hourly wage) * (Adjustment factor for 

overhead and other benefits, which the Commission 

has estimated to be 1.3)] = Adjusted hourly wage 

per professional type. 

(8) [(Adjusted hourly wage) * (Estimated hour 

burden for compliance)] = Dollar cost of compliance 

for each hour burden estimate per professional type. 

The sum of each of these calculations for all 

professional types involved in compliance with a 

given element of the final rule represents the total 

cost for each counterparty, reporting party, SD, 

MSP, SEF, DCM, or SDR, as applicable to that 

element of the final rule. 

73Again, because these costs have been 

considered in the context of the part 45 rulemaking, 

to reconsider them in this rulemaking would 

double-count them. 

74Swap counterparties that currently do not 

retain historical swap records for the period of time 

and in the form required by this final rule will incur 

costs to comply with these requirements. These 

same costs (including non-recurring investments in 

technological systems and personnel associated 

with establishing data storage and retrieval systems, 

and recurring expenses associated with data storage 

and retrieval, and maintenance of data storage 

systems), however, are required to comply with the 

requirements of part 45. Accordingly, they are not 

incremental to, and inappropriate for, consideration 

in this rulemaking. 

75For pre-enactment swaps, the rule allows swap 

counterparties to retain swap data in whatever form 

it currently exists. For transition swaps, the rule 

only requires the retention of data to populate the 

minimum PET data tables for swaps that were in 

existence after the issuance of the proposed rule. 

The Commission expects that the 

actual costs to established market 

participants will often be lower than 

this reference point—perhaps 

significantly so, depending on the 

extent to which swap counterparties 

currently format, organize, and store 

swap transaction data that would be 

reported as historical swap data 

pursuant to this final rule. 

To address costs specific to SDRs, the 

Commission has estimated the 

incremental costs SDRs would incur to 

comply with the reporting and 

recordkeeping requirements of this 

rulemaking above the base operating 

costs for SDRs to comply with part 45 

regulations.73

2. Recordkeeping 

a. Summary of Final Rule 

The final rule requires counterparties 

to a historical swap in existence on or 

after April 25, 2011 to keep records of 

the minimum primary economic terms 

data specified in the Appendix to the 

rule, as well as copies (if they have 

them) of confirmation documentation, 

master agreements, credit support or 

similar agreements. If the swap remains 

unexpired after the applicable 

compliance date, counterparties must 

also keep any records required by 

section 45.2 of this chapter. Non-SD 

counterparties may keep records in 

either paper or electronic form so long 

as they are retrievable and reportable as 

required, while SD or MSP 

counterparties must keep electronic 

records unless their paper records were 

originally created and are exclusively 

maintained in paper form. Records kept 

by SDs and MSPs must be readily 

accessible during the existence of the 

swap and for two years thereafter, and 

be retrievable within three business 

days during the remainder of the 

retention period, while records kept by 

non-SD/MSP counterparties must be 

retrievable within five business days 

throughout the retention period. 

For historical swaps that expired prior 

to April 25, 2011, each counterparty 

must retain the information and 

documents relating to the terms of the 

transaction that were in its possession 

on or after the date of the relevant 

Interim Final Rule (October 14, 2010 for 

pre-enactment swaps and December 17, 

2010 for transition swaps). The final 

rule does not require counterparties to 

create or retain records of information 

regarding such swaps that was not in 

their possession as of those dates, or to 

alter how the records are organized or 

stored. 

For all historical swaps, the final rule 

requires retention of records throughout 

the existence of the swap and for five 

years following expiration of the swap. 

b. Benefits 

By providing for the collection and 

retention of historical swap data (as well 

as its reporting), part 46 ensures the 

availability of data that will enhance the 

transparency of the swap markets. The 

Commission believes that improved 

swap market transparency (including 

transparency with respect to the 

historical swap transaction activity 

subject to Part 46’s recordkeeping 

requirements) is important to the 

Commission’s efforts to better identify, 

assess, and respond to risks, including 

systemic risks that swaps market may 

pose for market participants and the 

public in the future. The recordkeeping 

requirements of part 46 will increase the 

Commission’s and other regulatory 

agencies’ visibility into the activities 

and exposures of swap market 

participants and the dynamics of the 

swap market at large. This serves the 

public interest in effective regulatory 

enforcement. These recordkeeping 

requirements will enable Commission 

oversight and enforcement staff to 

reconstruct a comprehensive, sequenced 

record of swap transactions active 

between the enactment of the DoddFrank Act and this final rule’s 

compliance date. This data is necessary 

to effectively monitor and investigate 

activities that could compromise the 

integrity of swap markets. Additionally, 

the presence of an effective monitoring 

and investigation regime may deter 

parties from engaging in behavior that 

undermines the integrity of swap 

markets. 

In addition, the requirement to retain 

historical swap records for five years 

provides substantial benefit to market 

participants and the public because it 

affords the Commission the capability to 

analyze market trends through timeseries analysis for a reasonable period of 

time in the future. This in turn enhances 

the Commission’s ability to efficiently 

regulate the markets subject to its 

jurisdiction. A swap can continue to 

exist for a substantial period of time 

prior to its final termination or 

expiration, and key economic terms of 

the swap can change during this time. 

Thus, recordkeeping requirements with 

respect to a swap must necessarily cover 

the entire period of time during which 

the swap exists, as well as an 

appropriate period following final 

termination or expiration of the swap. A 

five-year retention period following 

termination of the swap also will ensure 

document retention consistent with the 

information that the Commission needs 

to carry out its oversight and 

enforcement responsibilities. It parallels 

the Commission’s existing five-year 

record retention requirement in the 

context of futures and is consistent with 

the Commission’s final part 49 rules 

regarding SDR registration. The 

identical retention periods provided in 

parts 45 and 46 will ensure that a single, 

comprehensive record is produced in 

the event that regulators require a data 

set spanning both Part 45 and Part 46 

data. Additionally, data collected on 

swap market activity both before and 

after the compliance date of part 45 and 

part 46 will be available to inform any 

pre/post-Dodd-Frank Act comparative 

analysis that might be performed in the 

future. Part 46 data would provide the 

starting point for such an assessment. 

c. Costs 

The Commission believes that the 

incremental74 costs to comply with the 

recordkeeping requirements of this part 

are limited to those related to historical 

swap data storage. The rules do not 

require counterparties to recreate data 

that does not presently exist, and thus 

imposes no costs in this respect.75


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76While swap counterparties also may have costs 

to maintain data storage infrastructure and/or costs 

to require the necessary data retrieval ability, these 

costs duplicate those that would be incurred to 

comply with part 45. Accordingly, they are not 

incremental to, and appropriate for, consideration 

in this rulemaking. 

77The costs of historical swap data storage were 

estimated based on the costs to SD/MSPs that 

decide not to contract with a third party to comply 

with the recordkeeping requirements of Part 46. See 

‘‘Overview of Cost Calculations.’’ This estimate is 

calculated as follows: [(Computer Operations 

Supervisor at 80 hours) + (Computer Operations 

Group/Section Manager at 80 hours) + (Computer 

Operations Department Manager at 40 hours) + (Sr. 

Database Administrator at 40 hours) + (Programmer 

at 40 hours) + (Systems Analyst at 20 hours) + 

(Compliance Manager at 10 hours) + (Director of 

Compliance at 5 hours) + (Compliance Attorney at 

20 hours)] = 335 hours per SD/MSP counterparty; 

[(335 hours per SD/MSP) × (125 SD/MSPs) = 41,875 

aggregate hours. The Commission believes that 

information on swap transactions is currently being 

retained by many market participants in the 

ordinary course of business, which may result in 

lesser burden for those parties. 

78See Table 2. 

The Commission believes that any 

incremental costs will be incurred 

primarily by SD/MSP swap 

counterparties, which are required to 

retain historical swap data according to 

the format and retrieval requirements of 

§ 46.2. The costs to SDRs of retaining 

historical swap data reported by swap 

counterparties pursuant to this final rule 

will be addressed in the discussion of 

the costs and benefits of reporting 

historical swap data in this 

Consideration of Costs and Benefits. 

Historical swap data storage. The 

Commission believes that storing 

historical swap data for the period of 

time required by this final rule will 

impose a one-time burden on swap 

counterparties associated with gathering 

and transferring the historical swap data 

onto a server for secure storage.76

Non-SD/MSP counterparties are 

permitted by the rule to keep records in 

either electronic or paper form at their 

discretion, so as to eliminate the burden 

of gathering and transferring historical 

swap data for recordkeeping. To satisfy 

the recordkeeping provision of this final 

rule, non-SD/MSP counterparties can 

simply retain their records as and 

wherever they currently exist. 

For SD/MSPs, the Commission 

estimates a one-time burden of 335 

hours per SD/MSP counterparty77 at an 

estimated cost of $22,172.78 The 

Commission anticipates that SD/MSPs 

will likely be required to process a 

larger volume of historical swap data 

than non-SD/MSPs, though many may 

be able to leverage existing technology 

and personnel expertise to reduce the 

burden to perform this function. 

d. Comments, Alternatives, and Cost 

Mitigation 

Recordkeeping for historical swaps in 

existence on or after April 25, 2011. The 

Commission received several comments 

related to the costs of recordkeeping for 

swaps in existence on or after April 25, 

2011. COPE supported the NOPR 

provision that limited the records 

required to be kept for such swaps to the 

minimum PET data specified in the 

NOPR Appendix (plus any 

confirmation, master agreement, or 

credit support agreement that the 

counterparty has), stating this is a 

reasonable requirement. COPE added 

that the specified PET data elements 

reflect the commercially relevant terms 

typically retained by swap 

counterparties, although a counterparty 

involved in few swaps might not retain 

all of this data in the ordinary course of 

its business. ETA also supported the 

requirement to keep records of the 

specified minimum PET data, stating 

that it believes all or most 

counterparties will have this data, 

although it could not be certain that all 

smaller non-financial entities in the 

energy sector will have all of it. 

As noted above, ISDA and Global 

Forex requested that the Commission 

eliminate the time of trade from the 

NOPR’s required PET data, arguing that 

including the time of trade would 

require some participants to 

retroactively create data they do not 

possess. FSR stated that its members 

have made best efforts to comply with 

the interim final rules for historical 

swaps by retaining the records in their 

possession, but that they do not 

necessarily have all of the required 

minimum PET data. The specific 

concerns FSR raised include identifying 

the settlement agent for pre-enactment 

currency swaps, and having data for 

pre-enactment swaps that were acquired 

through merger or acquisition. 

The Commission made two important 

modifications in the final rule in an 

effort to address these comments and 

mitigate the costs of the final rule while 

achieve the same regulatory benefits. 

First, as discussed above, the final 

rule requires counterparties to keep 

records of only the minimum PET data 

specified in Appendix 1 that was in 

their possession as of publication of the 

NOPR, which gave notice of what 

records would be required. The 

Commission believes that this will 

reduce costs and burdens associated 

with recordkeeping by counterparties to 

historical swaps to the extent consistent 

with ensuring the availability of swap 

data needed to fulfill the purposes of the 

Dodd-Frank Act. 

Second, as discussed above, the final 

rule will require reporting the date of 

execution for a historical swap, and 

require reporting the time of execution 

only if that time was recorded when the 

trade was executed and is known to the 

reporting counterparty on or after April 

25, 2011, the NOPR publication date. As 

noted above, the Commission believes 

that it would be undesirable for 

counterparties who did not record the 

execution time when a historical swap 

was executed to attempt to assign an 

execution time retroactively. 

Recordkeeping for historical swaps 

expired prior to April 25, 2011. ISDA 

noted that, for historical swaps expired 

prior to the publication date of the 

NOPR, the NOPR does not require 

parties to alter the format in which they 

already retain records concerning such 

swaps. ISDA asked the Commission to 

clarify whether this requirement 

allowed counterparties to keep records 

in the form already used. Similarly, 

WGCEF requested clarification that 

keeping records in the form in which 

they are already retained will be 

acceptable to the Commission for all 

historical swaps. 

As discussed above, and in order to 

achieve the benefits of the rule, the 

Commission has determined that the 

final rule should retain the NOPR 

provisions concerning limited 

recordkeeping for such swaps, which 

required counterparties to keep only the 

information and documents concerning 

such swaps that were in their 

possession on or after the publication 

date of the applicable Interim Final 

Rule. The final rule provides that 

counterparties may keep such records in 

any format they choose. The 

retrievability requirement for all 

counterparties to such swaps will 

require counterparties to be able to 

retrieve such records within five 

business days throughout the retention 

period, rather than to keep records 

readily accessible for part of the 

retention period or to be able to retrieve 

records within three business days, as 

provided in the NOPR. This reduced 

retrievability requirement is designed to 

further reduce costs and burdens for 

counterparties to historical swaps that 

have expired prior to April 25, 2011. 

e. Recordkeeping in Light of CEA 

Section 15(a) 

The Commission has evaluated the 

benefits of the recordkeeping provisions 

of this part in light of the specific 

considerations identified in section 

15(a) of the CEA as follows: 

Protection of market participants and 

the public. The Commission believes 

that the recordkeeping requirements in 


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79For example, such assessments may compare 

measures such as the concentration of swap activity 

by type of market participant, the volumes of 

cleared and uncleared swap transactions, or the 

effective cost to the user of engaging in similar swap 

transactions in the pre- and post-compliance 

marketplace. 

80The Commission notes that non-SD/MSP 

counterparties will be able to retain either 

electronic or paper records at their discretion; if 

paper rather than electronic records are retained, 

this system will not be necessary for compliance, 

and thus this ancillary risk management benefit will 

not apply. 

the final rule protect market participants 

and the public by improving the ability 

of the Commission and other regulatory 

agencies to fulfill their oversight and 

enforcement responsibilities, and 

contributing to improved transparency 

necessary to identify and assess risks 

that swaps markets may pose. 

The record retention periods in the 

final rule are consistent with both the 

Commission’s existing retention 

requirement in the context of futures, 

pursuant to Commission Regulation 

1.31, and with applicable statutes of 

limitation. A general five-year record 

retention requirement helps assure the 

Commission ready access to records and 

data essential to its mission to protect 

market participants and the public from 

violations of the CEA and Commission 

regulations. For example, records 

retained pursuant to Part 46 will enable 

Commission staff to reconstruct a 

comprehensive, sequenced record of 

swap transactions active during the 

window between statutory enactment 

and the final rule’s compliance date for 

purposes of analysis; investigation; and, 

if appropriate, prosecution of an 

enforcement action. 

Moreover, by providing for the 

collection and retention of historical 

swap data (as well as its reporting), Part 

46 assures that data valuable to enrich 

the depth and perspective of regulators’ 

understanding of swap markets over 

time is available for reporting and 

regulatory analysis. In this way, 

historical recordkeeping requirements 

serve an important role in counteracting 

the swap market opacity and potential 

for under-appreciation of systemic risk 

that contributed to the financial crisis of 

2008. The Commission believes that 

improved swap market transparency 

(including transparency with respect to 

the historical swap transaction activity 

subject to Part 46’s recordkeeping 

requirements) is critical to the 

Commission’s efforts to better identify, 

assess, and respond to risks that swap 

markets may pose for market 

participants and the public in the 

future. 

Efficiency, competitiveness, and 

financial integrity. This rule promotes 

efficiency and competitiveness. The 

historical swaps transaction data subject 

to these recordkeeping requirements 

will provide a basis for comparative 

assessments of the swap markets that 

might be conducted in the future 

(including potential comparative 

assessments of market efficiency and 

competitiveness 79). In addition, 

electronic recordkeeping, which will aid 

required electronic reporting, may 

improve efficiency and reduce initiation 

and maintenance costs in the future. 

Further, the Commission believes that 

the final Part 46 recordkeeping 

requirements promote swap market 

financial integrity. As previously 

discussed, the Commission believes that 

historical swap transaction data as 

collected and retained under these final 

rules will aid it in effective swap market 

oversight and legal enforcement, 

including by helping to assure the 

availability of records needed to 

monitor and investigate market abuses. 

Also, by ensuring a data pool that 

provides historical swap transaction 

transparency to better inform regulators’ 

swap market analysis, the recordkeeping 

requirements serve an important role in 

counteracting swap market opacity that, 

as evidenced in the 2008 financial 

crisis, may contribute to a loss of 

confidence in market integrity. 

The Commission does not believe that 

costs of these recordkeeping 

requirements will impede swaps market 

efficiency, competitiveness, or integrity. 

Price discovery. The Commission does 

not believe that this requirement has a 

significant effect on the price discovery 

process. 

Sound risk management practices. 

The Commission believes that the final 

rule’s recordkeeping requirements, in 

tandem with the recordkeeping 

requirements of Part 45, will serve to 

improve the soundness of the risk 

management practices of market 

participants. The Commission is 

essentially requiring the maintenance of 

accurate records in a manner that makes 

them appropriately available for 

reproduction to regulators. Market 

participants may leverage the highly 

organized and streamlined internal 

records system they will possess in 

order to comply with Parts 45 and 46 for 

an ancillary risk management benefit; 

the system will be useful for analysis 

and for development of enhanced risk 

management practices.80 The cost of 

implementation of the recordkeeping 

rule may be partially compensated by 

error avoidance and the mitigation of 

internal risk. 

3. Reporting 

a. Summary of Final Rule 

The final rule requires that each 

historical swap in existence on or after 

April 25, 2011 be reported to a SDR 

electronically on or before the 

applicable compliance date. The initial 

data report must contain all of the 

minimum primary economic terms data 

listed in Appendix 1 that were in the 

possession of the reporting counterparty 

on or after April 25, 2011, the legal 

entity identifier of the reporting 

counterparty, the internal counterparty 

identifier used by the reporting 

counterparty to identify the nonreporting counterparty, and the internal 

transaction identifier used by the 

reporting counterparty to identify the 

swap. For each such swap that remains 

in existence after the compliance date, 

the reporting counterparty must report 

swap continuation data as provided in 

part 45 of this chapter, with the 

exception that such reports need only 

include changes to the minimum 

primary economic terms listed in 

Appendix 1 to this part, rather than 

change to the larger list of primary 

economic terms provided in part 45. 

Continuation data must be reported to 

the same SDR that received the initial 

data report. In parallel with part 45 of 

this chapter, the final rule provides that 

multi-asset historical swaps must be 

reported to a single SDR that accepts 

swaps in the asset class that is treated 

as the primary asset class involved in 

the swap by the reporting counterparty, 

and that mixed historical swaps must be 

reported to an SDR or security-based 

SDR registered with both the 

Commission and the SEC. 

For historical swaps that expired prior 

to April 25, 2011, the final rule requires 

that counterparties report to an SDR on 

the applicable compliance date such 

information relating to the terms of the 

transaction as was in the counterparty’s 

possession on or after the publication 

date of the relevant Interim Final Rule 

(October 14, 2010 for pre-enactment 

swaps and December 17, 2010 in the 

case of transition swaps). This 

information may be reported via any 

method selected by the reporting 

counterparty. 

The rule permits voluntary early 

submission of the initial data report 

(and of subsequent continuation data 

reports) prior to the applicable 

compliance date if a registered SDR is 

prepared to accept the reports. 

For historical swaps in existence on 

or after April 25, 2011, by the applicable 

compliance date the reporting 

counterparty must obtain, report, and 

provide to its counterparty an LEI as 


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81Unique identifier use also reflects a 

harmonized approach between the part 45 and part 

46 regulations. Accordingly, historic swaps will be 

reported in a consistent fashion with part 45 swaps, 

ensuring comparable data for analysis. The use of 

unique identifiers also enabled the Commission to 

allow for historical swap reporting through a VSR; 

without unique identifiers, the value and usability 

of the data reported in a VSR would be greatly 

diminished because of potential double-counting 

(recording the same transaction from the reporting 

counterparty and from the VSR reported by the nonreporting counterparty), and would not be readily 

comparable to the data reported pursuant to Part 45 

after the compliance date (which are required to 

incorporate unique identifiers). 

82 GFMA, Creating a Global Legal Entity Identifier 

(LEI) Standard, September 21, 2001, p. 10. Publicly 

available at http://www.sifma.org/uploadedfiles/ 

issues/technology_and_operations/ 

legal_entity_identifier/lei-project-summaryslides.pdf. 

83CPSS–IOSCO Report on OTC Derivatives Data 

Reporting and Aggregation Requirement, August 

2011, p.36. Publicly available at http://www.bis.org/ 

publ/cpss96.pdf. 

84Swap counterparties that have not previously 

established a reporting infrastructure, including 

connectivity to an SDR (or the Commission in the 

absence of an SDR that collects data for a given 

asset class), will incur costs to comply with these 

requirements. The Commission anticipates, 

however, that swap counterparties will satisfy the 

reporting requirements of part 46 with a single, 

non-recurring transmission of data to an SDR 

occurring at the same time and through the same 

mechanism as its initial transmission of swap 

creation and continuation data pursuant to part 45. 

Thus, the costs (including non-recurring 

investments to train personnel, implement data 

reporting technology, and establish the required 

data connectivity; and recurring expenses 

associated with personnel hours and maintenance 

of the data reporting technology infrastructure), to 

comply with part 46 are already necessitated by 

part 45 and were considered in that rulemaking. 

Accordingly, they are not incremental to, and 

inappropriate for, consideration in this rulemaking. 

Similarly, swap counterparties will experience a 

one-time cost to format swap records subject to part 

46 and part 45 to the same minimum PET data 

tables required in both regulations. Because these 

costs were considered previously in the part 45 

rulemaking, they are not incremental to, and 

inappropriate for, consideration in this rulemaking. 

Continued 

provided in part 45. Within 180 days of 

the applicable compliance date, the 

non-reporting counterparty must obtain 

an LEI and provide it to the reporting 

counterparty, which then must report it 

to the relevant SDR. 

The final rule sets forth the criteria for 

determining which counterparty must 

report. For historical swaps in existence 

on the applicable compliance date, 

these provisions apply to the current 

counterparties as of the compliance 

date, notwithstanding whether they 

were the original counterparties. If only 

one counterparty is an SD, the SD 

reports. If neither counterparty is an SD 

and only one is an MSP, the MSP 

reports. If both counterparties are nonSD/MSP counterparties, and only one is 

a financial entity as defined in CEA 

section 2(h)(7)(C), the financial entity 

reports. If the counterparties share the 

same status, the rule requires them to 

agree which of them is the reporting 

counterparty for that swap. If both 

counterparties are non-SD/MSP 

counterparties but only one is a U.S. 

person, the U.S person must report. 

After the initial data report is made, if 

the reporting counterparty exits the 

original transaction (e.g., through an 

assignment), the new reporting 

counterparty will be: The SD (or the 

MSP if there is no SD) if only one is 

present; the U.S. person if both 

counterparties are non-SD/MSP 

counterparties and only one is a U.S. 

person; or, in all other cases, the 

counterparty that replaced the previous 

reporting counterparty, unless otherwise 

agreed by the counterparties. 

The final rule provides for third-party 

facilitation of reporting. It also requires 

that all data for a historical swap must 

be reported to the same SDR to which 

the initial data report is made. It permits 

either counterparty to make voluntary 

supplemental reports (‘‘VSRs’’), to either 

the same or a different SDR. To provide 

minimum safeguards against confusion 

or double-counting resulting from VSRs, 

the rule requires that each VSR must 

include an indication that it is a VSR, 

as well as the SDR identifier created for 

the swap by the automated systems of 

the SDR to which the required, initial 

data report is made. 

The final rule requires the reporting 

counterparty to use the facilities, 

methods, or data standards provided or 

required by the SDR to which it reports 

the data. Corrections must be reported, 

as soon as technologically practicable 

after discovery of an error or omission, 

to the same SDR that received the initial 

data report. 

b. Benefits 

The Commission believes that the part 

46 reporting requirements will improve 

regulatory oversight, enforcement, and 

understanding of systemic risks. 

The Commission’s harmonization of 

the reporting requirements of this part 

with those of part 45 will benefit market 

participants by enabling reporting 

counterparties to satisfy the reporting 

requirements of both parts in the same 

way, and avoiding redundant costs that 

could be caused by differing reporting 

requirements. 

Historical swap reporting under part 

46 also benefits the general public by 

supporting the Commission’s 

supervision of the swaps market. As 

considered above in the discussion of 

the benefits of historical swap 

recordkeeping in this final rule, the 

reporting requirements provide a means 

for the Commission to gain a better 

understanding of the swaps market. 

The incorporation of unique identifier 

requirements within the part 46 

reporting regime also provides 

important benefits to market 

participants and the public by 

enhancing the quality and usability of 

the historical swap data that will be 

provided to the Commission.81

The beneficial contributions 

attributable to the specific unique 

identifiers addressed in the final rule, 

including both SDR identifiers for VSRs 

and LEIs, are as follows: 

• SDR identifiers will facilitate the 

collating of various data reports concerning 

a swap into a single, accurate data record. 

Through them it is possible to identify the 

origins of each swap as well as events that 

affect the swap during its existence; aggregate 

transaction information without doublecounting swaps reported to different SDRs or 

to foreign trade repositories, or reported in 

VSRs; and create a clear and unified data 

stream that spans the pre- and post-part 46 

compliance date periods. Accordingly, the 

Commission believes they provide a vital tool 

for regulatory agencies’ analysis of historical 

swap market data to better protect market 

participants and the public from systemic 

risk. 

• LEIs will enhance the ability of the 

Commission and other regulatory agencies to 

oversee swap markets by providing necessary 

clarity and cohesion to the swap data used 

for regulatory analyses, particularly with 

regard to clearly understanding the activities 

of participants in the pre- and post- part 46 

compliance date periods. Among the benefits 

of an LEI regime, GFMA identified more 

efficient data aggregation; more powerful 

modeling and risk analysis; facilitation of 

information sharing and reconciliation 

between regulators; better supervision of 

cross-border firms and firms whose business 

lines are overseen by multiple regulators; and 

facilitating identification of affiliates and 

parent companies. GFMA also called the LEI 

regime ‘‘a powerful tool for regulators in 

monitoring and managing systemic risks.’’ 82

As recognized in the CPSS–IOSCO Report on 

OTC Derivatives Data Reporting and 

Aggregation Requirement, which 

recommends expeditious development of a 

global LEI: 

[A] standard system of LEIs is an essential 

tool for aggregation of OTC derivatives data. 

An LEI would contribute to the ability of 

authorities to fulfill the systemic risk 

mitigation, transparency, and market abuse 

protection goals established by the G20 

commitments related to OTC derivatives, and 

would benefit efficiency and transparency in 

many other areas. As a universally available 

system for uniquely identifying legal entities 

in multiple financial data applications, LEIs 

would constitute a global public good.83

c. Costs 

Incremental 84 costs to comply with 

the reporting requirements of this part 


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35222 Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Rules and Regulations 

SDRs will also incur recurring costs to maintain 

their data storage infrastructure. Since the same 

SDR infrastructure expectedly will support storage 

activities under part 45, however, the Commission 

believes that the same maintenance activities 

undertaken to support part 45 will support part 46. 

Because these costs were considered previously in 

the part 45 rulemaking, they are not incremental to, 

and inappropriate for, consideration in this 

rulemaking. 

85The costs of normalizing data for historical 

swaps in existence on or after April 25, 2011 in data 

fields for electronic reporting were estimated based 

on the costs to SD/MSPs that decide not to contract 

with a third party to comply with the recordkeeping 

requirements of Part 46. See ‘‘Overview of Cost 

Calculations.’’ This estimate is calculated as 

follows: [(Sr. Database Administrator at 80 hours) 

+ (Programmer at 80 hours) + (Systems Analyst at 

80 hours) + (Compliance Manager at 20 hours) + 

(Director of Compliance at 5 hours) + (Compliance 

Attorney at 20 hours)] = 285 hours per SD/MSP 

counterparty; [(285 hours per SD/MSP) x (125 SD/ 

MSPs) = 35,625 aggregate hours. The Commission 

believes that information on swap transactions is 

currently being retained by many market 

participants in the ordinary course of business, 

which may result in lesser burden for those parties. 

86See Table 1. 

87The costs of formatting transition swaps for 

storage were estimated based on the costs to nonSD/MSPs that decide not to contract with a third 

party to comply with the recordkeeping 

requirements of Part 46. See ‘‘Overview of Cost 

Calculations.’’ This estimate is calculated as 

follows: [(Compliance Manager at 10 hours) + 

(Director of Compliance at 5 hours) + (Compliance 

Attorney at 20 hours) + (Compliance Clerk at 20 

hours)] = 55 hours per non-SD/MSP counterparty; 

[(55 hours per non-SD/MSP) x (1,000 non-SD/ 

MSPs) = 55,000 aggregate hours. The Commission 

believes that information on swap transactions is 

currently being retained by many market 

participants in the ordinary course of business, 

which may result in lesser burden for those parties. 

88See Table 1. 

89The costs of applying unique identifiers to 

historical swap data were estimated based on the 

costs to SD/MSPs that decide not to contract with 

a third party to comply with the recordkeeping/ 

reporting requirements of Part 46. See ‘‘Overview of 

Cost Calculations.’’ This estimate is calculated as 

follows: [(Sr. Database Administrator at 80 hours) 

+ (Programmer at 160 hours) + (Systems Analyst at 

160 hours) + (Compliance Manager at 20 hours) + 

(Director of Compliance at 10 hours) + (Compliance 

Attorney at 10 hours)] = 440 hours per SD/MSP 

counterparty; [(440 hours per SD/MSP) x (125 SD/ 

MSPs) = 55,000 aggregate hours. The Commission 

believes that information on swap transactions is 

currently being retained by many market 

participants in the ordinary course of business, 

which may result in lesser burden for those parties. 

90See Table 3. The Commission notes that while 

tasks required for compliance with the unique 

identifier requirements of this rule may ultimately 

overlap to some extent with the tasks required for 

compliance with the unique identifier requirements 

of part 45, the Commission believes that the process 

of appending a unique identifier to historical data 

submissions will be substantially different than the 

process of incorporating a unique identifier into the 

submissions of active swaps from a technological 

implementation perspective, and has therefore 

estimated the burden of the two processes 

separately. The Commission notes that, in the event 

that SD/MSP counterparties find it practical to 

combine duplicative elements of the two task (for 

example, writing a single program to process both 

historical and active swaps), the burden of 

compliance with the unique identifier requirements 

of this rule may be reduced for those entities. 

91The costs of applying unique identifiers to 

historical swap data were estimated based on the 

costs to non-SD/MSPs that decide not to contract 

with a third party to comply with the recordkeeping 

requirements of Part 46. See ‘‘Overview of Cost 

Calculations.’’ This estimate is calculated as 

follows: [(Sr. Database Administrator at 40 hours) 

+ (Programmer at 80 hours) + (Systems Analyst at 

80 hours) + (Compliance Manager at 10 hours) + 

(Director of Compliance at 5 hours) + (Compliance 

Attorney at 5 hours)] = 220 hours per non-SD/MSP 

counterparty; [(220 hours per non-SD/MSP) x (1,000 

non-SD/MSPs) = 220,000 aggregate hours. The 

Commission believes that information on swap 

transactions is currently being retained by many 

market participants in the ordinary course of 

business, which may result in lesser burden for 

those parties. 

92See Table 3. 

will be incurred only by reporting 

counterparties for historical swaps, most 

of whom will be SDs or MSPs. The 

reporting requirements of the final rule 

apply only to reporting counterparties. 

They will incur costs associated with 

normalizing required PET data for 

historical swaps in existence on or after 

April 25, 2011 in data fields for 

electronic reporting, and obtaining LEIs 

and including them in reported data as 

required by the rule. SDRs will incur 

costs for data receipt and storage. The 

SDR identifiers used to provide a 

safeguard against confusion and doublecounting of historical swaps in the 

context of VSRs will be created 

automatically by the automated systems 

of SDRs when they receive the initial 

data report for a historical swap and 

transmit that identifier to the 

counterparties to the swap in the normal 

course of their business. SDRs are 

already required by part 45 to have the 

systems and personnel necessary to 

create unique swap identifiers, and the 

creation of SDR identifiers by SDR 

automated systems will not impose any 

additional costs in these respects due to 

the requirements of part 46. 

Normalizing data for electronic 

reporting. The Commission anticipates 

that formatting transition swaps to 

populate the minimum PET data tables 

would impose a one-time burden on 

swap counterparties associated with the 

manipulation of the electronic files from 

their existing form to the form required 

by the final rule. For SDs and MSPs, the 

Commission estimates a one-time 

burden of 285 hours per SD or MSP 

counterparty 85 at an estimated cost of 

$20,169.86 For non-SD/MSPs, the 

Commission estimates a one-time 

burden of 55 hours per non-SD/MSP 

counterparty 87 at an estimated cost of 

$4,191.88 The Commission estimates 

that this requirement will present a 

larger burden for SD and MSP 

counterparties than for non-SD/MSP 

counterparties, because SDs and MSPs 

are likely to be required to process a 

larger volume of historical swap data. 

The Commission notes that this burden 

may be reduced for swap counterparties, 

especially SDs or MSPs that are able to 

leverage existing technology and 

personnel expertise to perform this 

function. 

Applying unique identifiers. The 

Commission anticipates that including 

LEIs in historical swap data, as required 

by this final rule, would impose a onetime burden on swap counterparties 

associated with reviewing the subset of 

historical swap data and appending the 

LEIs. The Commission believes that it 

may be possible to achieve a high degree 

of automation or computer-assisted 

processing for the task of reporting the 

LEI and adding it to the historical swap 

data files in storage. 

For SD and MSP reporting 

counterparties, the Commission 

estimates a one-time burden of 440 

hours per SD or MSP reporting 

counterparty 89 at an estimated cost of 

$29,681.90 For non-SD/MSP reporting 

counterparties, the Commission 

estimates a one-time burden of 220 

hours per non-SD/MSP reporting 

counterparty 91 at an estimated cost of 

$18,481.92 The Commission estimates 

that this requirement will present a 

larger burden for SDs and MSPs than for 

non-SD/MSP reporting counterparties 

because SDs and MSPs are likely to be 

required to process a larger volume of 

historical swap data. The Commission 

notes that this burden may be reduced 

for swap counterparties, especially SDs 

or MSPs that are able to leverage 

existing technology and personnel 

expertise to perform this function. 

Receiving and storing data. The 

Commission believes that receiving and 

storing historical swap data, as required 

by this final rule, would impose a onetime burden on SDRs associated with 

importing, examining/approving, and 

organizing/storing the historical swap 

data. The Commission anticipates that 

this incremental burden will involve the 

additional usage of the processes and 

personnel time and expertise necessary 

for receiving the stream of swap data 

reported by market participants for Part 

45 compliance. 

The Commission anticipates that 

some aspects of this task, such as 

programming a code to process 

historical swap data, will require 

manual intervention; for other aspects of 

this task, such as submitting the code 

and updating the historical swap data 

files in storage, it may be possible to 

achieve a high degree of automation or 

computer-assisted processing. 

Furthermore, the Commission notes that 

this burden may be further reduced to 

an extent dependent on the ability of an 


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93The costs of receiving and storing historical 

swap data were estimated based on the costs to 

SDRs. See ‘‘Overview of Cost Calculations.’’ This 

estimate is calculated as follows: [(Computer 

Operations Supervisor at 80 hours) + (Computer 

Operations Group/Section Manager at 80 hours) + 

(Computer Operations Department Manager at 20 

hours) + (Sr. Database Administrator at 80 hours) 

+ (Programmer at 80 hours) + (Systems Analyst at 

80 hours) + (Compliance Manager at 20 hours) + 

(Director of Compliance at 10 hours) + (Compliance 

Attorney at 10 hours)] = 460 hours per SDR; [(460 

hours per SDR) x (15 SDRs) = 6,900 aggregate hours. 

94See Table 4. 

SDR to leverage existing technology and 

personnel expertise to perform this 

function. Finally, the Commission notes 

that SDRs will be required by Part 45 to 

have the automated technological 

systems in place to assign SDR 

identifiers to swap data; therefore, 

assigning SDR identifiers to VSRs 

should not impose costs on SDRS. The 

Commission estimates a one-time 

burden of 460 hours per SDR93 at a cost 

of $29,882 94 for receiving and storing 

historical swap data. 

d. Comments, Alternatives, and Cost 

Mitigation 

Parties required to report certain 

historical swap data. Numerous 

commenters urged the Commission to 

phase in swap data reporting by both 

asset class and counterparty type. The 

Financial Services Roundtable 

recommended a phased implementation 

timeline based on a participant’s level of 

sophistication, resources and swap 

trading volume. Global Forex advocated 

phased implementation of reporting that 

takes into account both the readiness of 

a particular asset class for reporting and 

the type of reporting counterparty 

involved. ETA urged that reporting be 

phased in by asset class and product 

type, and noted that one or more SDRs 

must be prepared to accept data for an 

asset class before effective reporting can 

begin. ETA also advocated beginning 

reporting by SDs and MSPs before nonSD/MSP counterparties are required to 

report. ISDA called for reporting to be 

phased in based on the state of 

readiness of different asset classes and 

market participant types. 

After considering these comments, the 

Commission made a number of 

modifications in the final rule. The final 

rule phases in the start of reporting by 

counterparty type, by setting the 

compliance date for non-SD/MSP 

reporting counterparties six months 

after the compliance date for SDs and 

MSPs. The Commission believes that 

this approach reduces the costs of 

compliance for reporting counterparties 

that are likely to be smaller or less 

technologically sophisticated, while 

retaining the essential benefits of 

receiving historical swap transaction 

data from all swap market participants. 

This approach parallels that of the part 

45 rulemaking, which recognized the 

appropriateness of a phase-in period for 

non-SD/MSP counterparties. 

ETA urged that non-SD/MSP 

reporting counterparties not be required 

to report continuation data, arguing that 

transactions not involving SDs and 

MSPs represent only a small portion of 

the swaps market, and that such a 

requirement would be unduly 

burdensome. Alternatively, they asked 

that non-SD/MSP reporting 

counterparties be permitted to report 

continuation data for historical energy 

swaps on a quarterly basis. 

The Commission has determined that 

the final rule will require continuation 

data reporting as provided in part 45 of 

this chapter. Timely reporting of 

changes to primary economic terms of 

all swaps, including historical swaps, is 

necessary to give the Commission and 

other regulators the ability to see a 

current and accurate picture of the swap 

market as called for by the Dodd-Frank 

Act. In light of this comment, and after 

further considering the costs to non-SD/ 

MSP counterparties, the Commission 

extended and phased in the 

continuation data reporting deadlines 

for non-SD/MSP reporting 

counterparties. For non-SD/MSP 

reporting counterparties, the NOPR 

applied the same continuation data 

reporting deadlines found in Part 45. 

The final rule’s deadlines for 

continuation data reporting by non-SD/ 

MSP counterparties require such 

reporting no later than the end of the 

first business day following a relevant 

change to a primary economic term 

during the first year of reporting, and 

require such reporting no later than the 

end of the second business day 

following a relevant change to the 

primary economic terms of the swap 

thereafter. This approach should reduce 

the costs of Part 46 compliance to nonSD/MSP counterparties, while retaining 

the benefits of receiving continuation 

data. 

Scope of reporting requirements. 

ISDA and Global Forex requested that 

the Commission not require reporting of 

the time of trade for a historical swap, 

arguing that in many cases 

counterparties may not have recorded 

this information when a historical swap 

was executed. ISDA argues that it would 

be undesirable, if not impossible, for a 

participant to attempt to recreate an 

execution time not previously recorded. 

The Commission believes that it 

would not be desirable for 

counterparties to assign an execution 

time retroactively when no record 

exists, and the Commission also 

recognizes that the costs of doing so 

could be significant to reporting 

counterparties. To mitigate costs and 

maintain the integrity of the historical 

swap data record, the final rule limits 

the execution timestamp reporting 

requirement to the transaction date, 

calling for reporting the time of the 

trade only if the time was recorded 

when the trade was executed and is 

known to the reporting counterparty 

when the report is made. 

Three commenters, ISDA, ETA, and 

WGCEF, requested that the Commission 

drop the catchall category of ‘‘any other 

primary economic term(s)’’ from the 

required PET data for historical swaps, 

arguing that it would be better to define 

PET data precisely. ETA stated reporting 

such information could require 

extensive text submissions of nonstandardized transaction terms, 

complicating the compilation task of the 

SDRs. 

In response, the Commission has 

removed ‘‘any other primary economic 

term(s) of the swap matched by the 

counterparties in verifying the swap’’ 

from the minimum PET data tables. The 

Commission believes the PET data in 

the NOPR tables provides the minimum 

information regulators will need 

concerning historical swaps, 

information counterparties almost 

surely will possess (e.g., trade date, 

price, expiration date). Other primary 

economic terms that might be captured 

by the catch-all category are not crucial 

to fulfill the purposes of reporting data 

on historical swaps under Dodd-Frank, 

and the PET data elements specified in 

the tables should be sufficient in this 

respect. In addition, the burden of 

reporting data on swaps executed prior 

to issuance of the Commission’s final 

Dodd-Frank rules would be reduced by 

limiting required PET data for historical 

swaps to specified data elements. 

The End User Coalition requested that 

the Commission explain the use and 

value of reporting Master Agreement 

Identifiers. ISDA, ETA, and Global 

Forex stated that eliminating the 

requirement to report such identifiers, 

arguing that they would not necessarily 

allow regulators to calculate net 

exposures. Global Forex stated that 

providing this data would impose a 

significant burden because such 

information is not routinely stored on 

the same systems as the other PET data 

specified in the tables. WGCEF also 

asked that this requirement be 

eliminated, arguing that counterparties 

are in the best position to make 

exposure calculations and that the 

Commission already has the ability to 

request such information from them. 


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35224 Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Rules and Regulations 

In response, the Commission has 

eliminated the requirement to report 

master agreement identifiers. The terms 

of master agreements are not readily 

reportable in an electronic format, since 

no schema for reporting these terms in 

data fields has yet been developed. In 

addition, Dodd-Frank does not provide 

explicit authority for requiring such 

reporting; Dodd-Frank authorizes 

transaction-based reporting of the terms 

of a swap, and a master agreement is not 

a transactional agreement. Furthermore, 

the Commission notes that reporting of 

master agreements may eventually be 

initiated by the Office of Financial 

Research under its statutory authority. 

Eliminating this requirement therefore 

represents a reduction in the costs 

associated with Part 46 compliance. In 

addition, because master agreement 

identifiers are not required to be 

reported pursuant to Part 45, 

eliminating this requirement also 

represents improved harmonization 

between Parts 45 and 46. 

Reporting of Valuation Information 

ISDA recommended that data 

elements necessary for a person to 

determine the market value of a 

transaction be dropped from the 

proposed data reporting requirements 

for historical credit swaps. ISDA stated 

that such a requirement would be overly 

burdensome in that it would require a 

trader to retain a variety of information 

irrelevant to the purposes of the rule, is 

not currently retained by traders, and 

may be proprietary to the trader. 

The Commission considered this 

comment, and does not require these 

data elements in the final rule. The 

Commission eliminated the requirement 

to report data elements necessary to 

value a swap from the final Part 45 data 

reporting rule; for the same reasons 

explained in that rulemaking, the 

Commission believes that such a 

requirement is not appropriate for 

inclusion in the historical swaps data 

reporting rule. 

Alternative Submission Formats 

WGCEF requested that the 

Commission allow reporting 

counterparties to submit images of 

confirmations and other paper swap 

documentation in lieu of submission of 

normalized data in data fields, arguing 

that prohibiting the use of images for 

reporting would make the requirement 

more burdensome. 

The Commission considered this 

comment, but determined to maintain 

the NOPR’s requirement for electronic 

reporting of normalized data for 

historical swaps in existence on or after 

the date the NOPR was issued. 

Permitting submission of images in lieu 

of submission of normalized data in 

data fields would hinder regulators’ 

ability to efficiently search, retrieve, 

aggregate, and manipulate historical 

swap data in SDRs for essential 

purposes intended in the Dodd-Frank 

Act, including monitoring systemic risk 

and conducting market oversight and 

enforcement. In light of these 

considerations, the Commission 

believes that this final rule, by allowing 

submission of images to fulfill reporting 

requirements for swaps that expired 

prior to issuance of the NOPR on April 

25, 2011 reduces the reporting burden to 

the extent appropriate. 

e. Reporting in Light of CEA Section 

15(a) 

The Commission has evaluated the 

costs and benefits of the reporting 

provisions of this part in light of the 

specific considerations identified in 

Section 15(a) of the CEA as follows. 

Protection of market participants and 

the public. The Commission believes 

that historical swap data reporting as 

provided in part 46 enhances 

protections for market participants and 

the public in important ways. 

Information revealed through the 

requirements of § 46.3 and the use of 

unique identifiers as provided in § 46.4 

will provide the Commission with a 

significant body of previously 

unavailable data in a cohesive form that 

will enhance oversight and enforcement 

abilities to the benefit of both market 

participants and the public. For reasons 

identified above in the discussion of 

reporting requirement benefits, 

reporting of historical swap data in the 

manner prescribed in part 46 promotes 

the Commission’s market participant 

and public protection goals by 

improving the ability to: (1) Detect and 

protect market participants against 

fraud, manipulation, and abusive 

trading practices; (2) conduct effective 

surveillance to oversee the integrity and 

efficiency of market operation; and, (3) 

understand, monitor, and appropriately 

react to systemic risk indicators. 

Furthermore, the Commission 

believes that the requirements of this 

final rule, and the associated 

compliance costs, represent a transfer of 

the costs associated with the systemic 

risks inherent in transacting in opaque 

swap markets from the public to private 

entities, particularly to those that are 

better positioned to realize economies of 

scale and scope in assuming those costs; 

the Commission believes that because 

historical swap data could be used as a 

benchmark to better understand 

systemic risks associated with swap 

market activity in the future, the costs 

of reporting historical swap data relate 

to the systemic risks of ongoing swap 

market activity, as well as historical 

swap market activity. 

Efficiency, competitiveness, and 

financial integrity. This rule promotes 

efficiency and competitiveness in 

several ways. First, the Commission has 

exercised its discretion to specify 

reporting requirements in a manner 

designed to mitigate costs to the extent 

consistent with statutory requirements 

and fulfillment of the purposes of the 

Dodd-Frank Act. 

Second, by allowing reporting parties 

to utilize third-party service providers 

to transmit required data, the 

Commission provides flexibility for 

reporting parties to utilize the most 

efficient means for compliance. The 

Commission believes that, relative to the 

capabilities of at least certain reporting 

parties, third-party providers likely will 

have a comparative advantage in data 

processing costs. The rule affords 

reporting parties the opportunity to 

avail themselves of potential efficiencies 

that use of such a third-party provider 

could provide. 

Third, the reporting hierarchy 

employed in the final rule assigns 

reporting responsibility based on factors 

including the relative size and 

sophistication of market participants 

(for example, SD/MSP counterparties, 

which are likely to have technological 

resources more readily available for 

reporting than non-SD/MSP 

counterparties, will serve as the 

reporting counterparty when facing a 

non-SD/MSP counterparty in a swap). 

The Commission believes that this is an 

efficient approach to swap reporting, as 

it provides the opportunity for larger, 

more sophisticated entities to realize 

economies of scale and scope in their 

reporting processes (for example, a swap 

dealer can collect data from swaps to 

which it is a counterparty from a variety 

of asset classes and send the data to an 

SDR in a single report; this allows for 

the creation of fewer reports and a 

reduced burden vis-a`-vis a system in 

which numerous small non-SD/MSP 

counterparties would need to collect 

and report data). 

Fourth, the Commission believes that 

the provisions of the final rule that 

relate to the format of the historical 

swap data to be reported will serve to 

reduce costs and burdens for registered 

entities and swap counterparties by (a) 

Allowing reporting counterparties to 

report data for pre-enactment swaps in 

the form in which it currently exists, 

thereby removing the need for (and 

costs associated with) reformatting or 

recreating the data; (b) allowing 

reporting entities and counterparties to 


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95This authority could be used, for example, to 

require SDRs to accept swap data reports using a 

particular computer language already used by firms 

in a particular segment of the swap marketplace, so 

that they are not forced to incur additional cost by 

acquiring the capability needed to report using a 

different computer language. 

use whatever facilities, methods, or data 

standards are provided or required by 

the SDR to which data is reported; (c) 

allowing SDRs to use various facilities, 

methods, and data standards to receive 

data, so long as the SDR can provide 

data to the Commission in the format 

required by the Commission; and (d) 

allowing for the dual reporting, 

additional information reporting, and 

early submission of historical swap data 

in the form of a VSR. The Commission 

believes this approach is preferable to 

having the Commission mandate that 

reporting entities or counterparties 

adopt a particular format or data 

standard for reporting historical swap 

data and/or a particular form for preenactment swap data, which in some 

cases could impose the additional 

burden of acquiring new technological 

capability different or more extensive 

that what the entity or counterparty 

already possesses. The Commission 

believes that, in light of this provision 

of the final rule, market competition is 

likely to lead SDRs to allow reporting 

entities and counterparties to report 

using data formats or standards that are 

easiest and least costly for them. Costs 

for market participants may also be 

lowered by the final rule provision 

authorizing the Commission’s Chief 

Information Officer to require use of a 

particular data standard in order to 

accommodate the needs of different 

communities of users.95

Furthermore, the Commission does 

not anticipate that the reporting 

requirements (including unique 

identifier requirements) of this final rule 

present costs that would impede the 

efficiency of swaps markets. 

The Commission anticipates that the 

reporting requirements of this final rule 

will work in concert with the 

recordkeeping requirements of this final 

rule to improve the integrity of swap 

markets. Accordingly, the manner in 

which these reporting requirements will 

aid market integrity mirrors those 

considered in the preceding discussion 

of the integrity benefits of 

recordkeeping— namely, by aiding the 

prosecution and deterrence of market 

abuses and assisting regulatory 

supervision of markets through 

improved transparency. 

Price discovery. The Commission does 

not believe that the historical swap data 

reporting requirements (including 

unique identifier requirements) of this 

final rule will impact the price 

discovery process. 

Sound risk management practices. 

The Commission does not believe that 

the historical swap data reporting 

requirements (including unique 

identifier requirements) of this final rule 

have a significant effect on sound risk 

management practices. 

Other public interest considerations. 

The Commission believes that the data 

reporting requirements of this final rule 

will allow the Commission to readily 

acquire and analyze market data, thus 

streamlining the surveillance process. 

The Commission believes that by 

receiving historical swap data from the 

same market participants that will likely 

report a comparable stream of creation 

and continuation data pursuant to part 

45, part 46 will allow the economists 

and other analysts employed by the 

Commission the opportunity to compare 

aspects of the swap market before and 

after the effective date of parts 45 and 

46. This will likely create the potential 

for an analysis of the effects of 

implementing these rules. 

With regard to unique identifiers, the 

Commission anticipates that the unique 

identifier requirements of this final rule 

will facilitate the Commission’s efforts 

in the course of their investigations by 

providing a clear framework for data 

aggregation and comparison across 

financial instruments and between the 

pre- and post- part 46 compliance date 

periods. 

TABLE 1—NORMALIZING DATA FOR

ELECTRONIC REPORTING

Hours Personnel 

cost 

SD/MSPs .............. 285 $20,169 

Non-SD/MSPs ...... 55 4,191 

TABLE 2—HISTORICAL SWAP DATA

STORAGE

Hours Personnel 

cost 

SD/MSPs .............. 335 $22,172 

TABLE 3—APPLYING UNIQUE

IDENTIFIER

Hours Personnel 

cost 

SD/MSPs .............. 440 $29,681 

Non-SD/MSPs ...... 220 18,481 

TABLE 4—RECEIVING AND STORING

DATA

Hours Personnel 

cost 

SDRs .................... 460 $29,882 

IV. Compliance Dates 

A. Introduction 

As discussed above, the final rule 

retains the NOPR provision requiring 

compliance with recordkeeping and 

reporting requirements for historical 

swaps to commence on the same 

compliance dates specified in the 

Commission’s final swap data 

recordkeeping and reporting regulations 

in part 45 of this chapter. The 

provisions of both part 45 and part 46 

phase in compliance dates by both asset 

class and counterparty type. As noted 

above, this final rule permits voluntary 

initial data reporting for historical 

swaps prior to the applicable 

compliance date, if a registered SDR is 

prepared to accept the required initial 

data report prior to the applicable 

compliance date. Where such a 

voluntary early initial data report is 

made, continuation data reporting for 

the swap in question, if applicable, is 

still required to commence as of the 

applicable compliance date. 

Accordingly, the Commission has 

determined that each swap dealer, major 

swap participant, and non-SD/MSP 

counterparty subject to the jurisdiction 

of the Commission shall commence full 

compliance with all provisions of this 

part on the applicable compliance dates 

set forth below. 

B. Compliance Dates for Swap Dealers 

and Major Swap Participants 

Swap dealers, and major swap 

participants shall commence full 

compliance with all provisions of this 

part as follows: 

Credit swaps and interest rate swaps. 

Compliance date 1, the compliance date 

with respect to credit swaps and interest 

rate swaps, shall be the later of: July 16, 

2012; or 60 calendar days after the 

publication in the Federal Register of 

the later of the Commission’s final rule 

defining the term ‘‘swap’’ or the 

Commission’s final rule defining the 

terms ‘‘swap dealer’’ and ‘‘major swap 

participant.’’ 

Equity swaps, foreign exchange 

swaps, and other commodity swaps. 

Compliance date 2, the compliance date 

with respect to equity swaps, foreign 

exchange swaps, and other commodity 

swaps, shall be 90 calendar days after 

compliance date 1. 


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C. Compliance Date for Non-SD/MSP 

Counterparties 

Non-SD/MSP counterparties shall 

commence full compliance with all 

provisions of this part for all preenactment and transition swaps on 

compliance date 3, which shall be 90 

calendar days after compliance date 2. 

Final 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 

amends 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. 

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 Voluntary supplemental reporting 

46.10 Required data standards. 

46.11 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 broad category 

of goods, services or commodities, 

including any ‘‘excluded commodity’’ 

as defined in CEA section 1a(19), with 

common characteristics underlying a 

swap. The asset classes include credit, 

equity, foreign exchange (excluding 

cross-currency), interest rate (including 

cross-currency), other commodity, and 

such other asset classes as may be 

determined by the Commission. 

Compliance date means the 

applicable date, as specified in part 45 

of this chapter, on which a registered 

entity or swap counterparty subject to 

the jurisdiction of the Commission is 

required to commence full compliance 

with all provisions of this part and with 

all applicable provisions of part 45 of 

this chapter, as set forth in the preamble 

to this part. 

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 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. 

Electronic reporting (‘‘report 

electronically’’) means the reporting of 

data normalized in data fields as 

required by the data standard or 

standards used by the swap data 

repository to which the data is reported. 

Except where specifically otherwise 

provided in this chapter, electronic 

reporting does not include submission 

of an image of a document or text file. 

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. 

Financial entity has the meaning set 

forth in CEA section 2(h)(7)(C). 

Foreign exchange forward has the 

meaning set forth in CEA section 1a(24). 

Foreign exchange instrument means 

an instrument that is both defined as a 

swap in part 1 of this chapter and 

included in the foreign exchange asset 

class. Instruments in the foreign 

exchange asset class include: any 

currency option, foreign currency 

option, foreign exchange option, or 

foreign exchange rate option; any 

foreign exchange forward as defined in 

CEA section 1a(24); any foreign 

exchange swap as defined in CEA 

section 1a(25); and any non-deliverable 

forward involving foreign exchange. 

Foreign exchange swap has the 

meaning set forth in CEA section 1a(25). 

It does not include swaps primarily 

based on rates of exchange between 

different currencies, changes in such 

rates, or other aspects of such rates 

(sometimes known as ‘‘cross-currency 

swaps’’). 

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; or any swap 

which is primarily based on rates of 

exchange between different currencies, 

changes in such rates, or other aspects 

of such rates (sometimes known as 

‘‘cross-currency swaps’’). 

International swap means a swap 

required by U.S. law and the law of 

another jurisdiction to be reported both 

to a swap data repository and to a 

different trade repository registered with 

the other jurisdiction. 

Major swap participant has the 

meaning set forth in CEA section 1a(33) 

and in part 1 of this chapter. 

Minimum primary economic terms 

means, with respect to a historical swap, 

the terms included in the list of 

minimum primary economic terms for 

swaps in each swap asset class found in 

Appendix 1 to this part. 

Minimum primary economic terms 

data means all of the data elements 

necessary to fully report all of the 

minimum primary economic terms 

required by this part to be reported for 

a swap in the swap asset class of the 

swap in question. 

Mixed swap has the meaning set forth 

in CEA section 1a(47)(D), and refers to 

an instrument that is in part a swap 

subject to the jurisdiction of the 

Commission, and in part a securitybased swap subject to the jurisdiction of 

the SEC. 

Multi-asset swap means a swap that 

does not have one easily identifiable 

primary underlying notional item, but 

instead involves multiple underlying 

notional items within the Commission’s 

jurisdiction that belong to different asset 

classes. 

Non-SD/MSP 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, equity, 

foreign exchange, or interest rate asset 

classes, 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 


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data pursuant to this part, selected as 

provided in § 46.5. 

Required swap continuation data 

means all of the data elements that must 

be reported during the existence of a 

swap as required by part 45 of this 

chapter. 

Swap data repository has the meaning 

set forth in CEA section 1a(48), and in 

part 49 of this chapter. 

Swap dealer has the meaning set forth 

in CEA section 1a(49), and in part 1 of 

this chapter. 

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 applicable 

compliance date on which a registered 

entity or swap counterparty subject to 

the jurisdiction of the Commission is 

required to commence full compliance 

with all provisions of this part, as set 

forth in the preamble to this part. 

§ 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 

subject to the jurisdiction of the 

Commission that is a 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. Each 

counterparty shall keep records of all of 

the minimum primary economic terms 

data specified in Appendix 1 to this 

part. 

(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 confirmation of the swap 

executed by the counterparties. 

(ii) Any master agreement governing 

the swap, and any modification or 

amendment thereof. 

(iii) Any credit support agreement, or 

other agreement between the 

counterparties having the same function 

as a credit support agreement, 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 section 

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. 

(4) Retention form. Records required 

to be kept pursuant to this section with 

respect to historical swaps in existence 

on or after April 25, 2011, must be kept 

as required by paragraph (a)(4)(i) or (ii) 

of this section, as applicable. 

(i) Records required to be kept by 

swap dealers or major swap participants 

may be kept in electronic form, or kept 

in paper form if originally created and 

exclusively maintained in paper form, 

so long as they are retrievable, and 

information in them is reportable as 

required by this part. 

(ii) Records required to be kept by 

non-SD/MSP counterparties may be 

kept in either electronic or paper form, 

so long as they are retrievable, and 

information in them is reportable, as 

required by this part. 

(b) Recordkeeping for pre-enactment 

and transition swaps expired or 

terminated prior to April 25, 2011. Each 

counterparty subject to the jurisdiction 

of the Commission that is a 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, 

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 section shall 

be kept from the applicable dates 

specified in paragraphs (a) or (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. 

(d) Retrieval. Records required to be 

kept pursuant to this section shall be 

retrievable as follows. 

(1) Retrieval for pre-enactment and 

transition swaps in existence on or after 

April 25, 2011. Records concerning preenactment and transition swaps in 

existence on or after April 25, 2011, 

shall be retrievable as follows: 

(i) 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. 

(ii) Each record required to be kept by 

a non-SD/MSP counterparty shall be 

retrievable by the counterparty within 

five business days throughout the 

period during which it is required to be 

kept. 

(2) Retrieval for pre-enactment and 

transition swaps expired or terminated 

prior to April 25, 2011. Records 

concerning pre-enactment and 

transition swaps expired or terminated 

prior to April 25, 2011, shall be 

retrievable by the counterparty within 

five business days throughout the 

period during which they are required 

to be kept. 

(e) Inspection. All records required to 

be kept pursuant to this section by any 

registrant or its affiliates or by any 

counterparty subject to the jurisdiction 

of the Commission 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 as authorized by 

the Commission. 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. With 

respect to historical swaps in existence 

on or after April 25, 2011, copies of 

records required to be kept by any swap 

dealer or major swap participant shall 


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be provided either by electronic means, 

in hard copy, or both, as requested by 

the Commission, with the sole 

exception that copies of records 

originally created and exclusively 

maintained in paper form may be 

provided in hard copy only; and copies 

of records required to be kept by any 

non-SD/MSP counterparty shall be 

provided in the form, whether 

electronic or paper, in which the 

records are kept. With respect to 

historical swaps expired or terminated 

prior to April 25, 2011, records shall be 

provided in the form, whether 

electronic or paper, in which the 

records are kept. 

§ 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 minimum primary 

economic terms data specified in 

Appendix 1 to this part that were in the 

possession of the reporting counterparty 

on or after April 25, 2011; 

(ii) The legal entity identifier of the 

reporting counterparty required 

pursuant to § 46.4; and 

(iii) The following additional 

identifiers: 

(A) The internal counterparty 

identifier or legal entity identifier used 

by the reporting counterparty to identify 

the non-reporting counterparty; and 

(B) The internal transaction identifier 

used by the reporting counterparty to 

identify the swap. 

(2) Reporting of required swap 

continuation data. (i) For each 

uncleared pre-enactment or transition 

swap in existence on or after April 25, 

2011, throughout the existence of the 

swap following the compliance date, the 

reporting counterparty must report all 

required swap continuation data 

required to be reported pursuant to part 

45 of this chapter, with the exception 

that when a reporting counterparty 

reports changes to minimum primary 

economic terms for a pre-enactment or 

transition swap, the reporting 

counterparty is required to report only 

changes to the minimum primary 

economic terms listed in Appendix 1 to 

this part and reported in the initial data 

report made pursuant to paragraph (a)(1) 

of this section, rather than changes to all 

minimum primary economic terms 

listed in Appendix 1 to part 45. 

(ii) Swap continuation data reporting 

is not required for a pre-enactment or 

transition swap in existence on or after 

April 25, 2011, that has been cleared by 

a designated clearing organization. 

(3) Data reporting for multi-asset 

swaps and mixed swaps. (i) For each 

pre-enactment or transition swap in 

existence on or after April 25, 2011, that 

is a multi-asset swap, all data required 

to be reported by this part shall be 

reported to a single swap data repository 

that accepts swaps in the asset class 

treated as the primary asset class 

involved in the swap by the reporting 

counterparty making the first report of 

required swap creation data pursuant to 

this section. 

(ii) For each pre-enactment or 

transition swap in existence on or after 

April 25, 2011, that is a mixed swap, all 

data required to be reported pursuant to 

this part shall be reported to a swap data 

repository registered with the 

Commission and to a security-based 

swap data repository registered with the 

Securities and Exchange Commission. 

This requirement may be satisfied by 

reporting the mixed swap to a swap data 

repository or security-based swap data 

repository registered with both 

Commissions. 

(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 may 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 may be reported via any 

method selected by the reporting 

counterparty. 

(c) Voluntary early submission of 

initial data report. For all pre-enactment 

and transition swaps required to be 

reported pursuant to this part, the 

reporting counterparty may make the 

initial data report required by paragraph 

(a)(1) of this section, or the data report 

required by paragraph (b) of this section, 

prior to the applicable compliance date, 

if a swap data repository accepting 

swaps in the asset class in question is 

prepared to accept the report. The 

obligation to report continuation data as 

required by paragraph (a)(2) of this 

section with respect to a swap for which 

a voluntary early submission is made 

commences on the applicable 

compliance date. However, the 

reporting counterparty may submit 

continuation data at any time after a 

voluntary early submission made 

pursuant to this paragraph, if the swap 

data repository is prepared to accept 

such continuation data, and if that 

repository has registered with the 

Commission as a swap data repository 

as of the applicable compliance date. 

(d) Non-duplication of previous 

reporting. If the reporting counterparty 

for a pre-enactment or transition swap 

has reported any of the information 

required as paragraphs (a) or (b) 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: 

(1) The counterparty shall not be 

required to report such previously 

reported information to the swap data 

repository again; 

(2) 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 paragraph (a) of this section that has 

not been reported prior to the 

compliance date: and 

(3) In the case of pre-enactment and 

transition swaps in existence on or after 

April 25, 2011, the initial data report 

required by paragraph (a) 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 first 

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). 

§ 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 preVerDate Mar<15>2010 18:03 Jun 11, 2012 Jkt 226001 PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 E:\FR\FM\12JNR4.SGM 12JNR4

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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 for itself a 

legal entity identifier as provided in 

§ 45.6 of this chapter (or if the 

Commission has not yet designated a 

legal entity identifier system, a 

substitute counterparty identifier as 

provided in § 45.6(f) of this chapter), 

and shall include its own legal entity 

identifier (or substitute counterparty 

identifier) in the initial data report 

concerning the swap. With respect to 

the legal entity identifier (or substitute 

counterparty identifier) of the reporting 

counterparty, the reporting counterparty 

and the swap data repository to which 

the swap is reported shall comply 

thereafter with all unique identifier 

requirements of § 45.6 of this chapter. 

(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 legal entity identifier as 

provided in § 45.6 of this chapter (or if 

the Commission has not yet designated 

a legal entity identifier system, a 

substitute counterparty identifier as 

provided in § 45.6(f) of this chapter), 

and shall provide its legal entity 

identifier (or substitute counterparty 

identifier) to the reporting counterparty. 

Upon receipt of the non-reporting 

counterparty’s legal entity identifier (or 

substitute counterparty identifier), the 

reporting counterparty shall provide it 

to the swap data repository to which 

swap data for the swap was reported. 

Thereafter, with respect to the legal 

entity identifier (or substitute 

counterparty identifier) of the nonreporting counterparty, the 

counterparties to the swap and the swap 

data repository to which it is reported 

shall comply with all requirements of 

§ 45.6 of this chapter. 

(c) The legal entity identifier 

requirements of parts 46 and 45 of this 

chapter shall not apply to pre-enactment 

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 a swap 

dealer, the swap dealer shall fulfill all 

counterparty reporting obligations. 

(2) If neither party is an swap dealer, 

and only one counterparty is an major 

swap participant, the major swap 

participant shall fulfill all counterparty 

reporting obligations. 

(3) If both counterparties are non-SD/ 

MSP counterparties, and only one 

counterparty is a financial entity as 

defined in CEA section 2(h)(7)(C), the 

counterparty that is a financial entity 

shall be the reporting counterparty. 

(4) For each pre-enactment swap or 

transition swap for which both 

counterparties are swap dealers, or both 

counterparties are major swap 

participants, or both counterparties are 

non-SD/MSP counterparties that are 

financial entities as defined in CEA 

section 2(h)(7)(C), or both counterparties 

are non-SD/MSP counterparties and 

neither counterparty is a financial entity 

as defined in CEA section 2(h)(7)(C), the 

counterparties shall agree which 

counterparty shall fulfill reporting 

obligations with respect to that swap; 

and the counterparty so selected shall 

fulfill all counterparty reporting 

obligations. 

(5) Notwithstanding the provisions of 

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

section, for pre-enactment or transition 

swaps for which both counterparties are 

non-SD/MSP counterparties, if only one 

counterparty is a U.S. person, that 

counterparty shall be the reporting 

counterparty and shall fulfill all 

counterparty reporting obligations. 

(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 (except for determination of 

a counterparty’s status as an SD or MSP, 

which shall be made as of the 

compliance date), regardless of whether 

either or both were original 

counterparties to the swap when it was 

first executed. 

(d) After the initial report required by 

§ 46.3 is made, if a reporting 

counterparty selected pursuant to this 

section ceases to be a counterparty to a 

swap due to an assignment or novation, 

the reporting counterparty for reporting 

of required swap continuation data 

following the assignment or novation 

shall be selected from the two current 

counterparties as provided in 

paragraphs (d)(1) through (4) of this 

section. 

(1) If only one counterparty is a swap 

dealer, the swap dealer shall be the 

reporting counterparty and shall fulfill 

all counterparty reporting obligations. 

(2) If neither counterparty is a swap 

dealer, and only one counterparty is a 

major swap participant, the major swap 

participant shall be the reporting 

counterparty and shall fulfill all 

counterparty reporting obligations. 

(3) If both counterparties are non-SD/ 

MSP counterparties, and only one 

counterparty is a U.S. person, that 

counterparty shall be the reporting 

counterparty and shall fulfill all 

counterparty reporting obligations. 

(4) In all other cases, the counterparty 

that replaced the previous reporting 

counterparty by reason of the 

assignment or novation shall be the 

reporting counterparty, unless otherwise 

agreed by the counterparties. 

§ 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, 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). 

§ 46.8 Data reporting for swaps in a swap 

asset class not accepted by any swap data 

repository. 

(a) Should there be a swap asset class 

for which no swap data repository 

registered with the Commission 

currently accepts swap data, each 

registered entity or counterparty 

required by this part to report any 

required swap creation data or required 

swap continuation data with respect to 

a swap in that asset class must report 

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(b) Data reported to the Commission 

pursuant to this section shall be 

reported at times announced by the 

Commission. Data reported to the 

Commission pursuant to this section 

with respect to pre-enactment and 

transition swaps in existence on or after 

April 25, 2011 shall be reported in an 

electronic format acceptable to the 

Commission. 

(c) Delegation of authority to the Chief 

Information Officer: The Commission 

hereby delegates to its Chief Information 

Officer, until the Commission orders 

otherwise, the authority set forth in 

paragraph (c) of this section, to be 

exercised by the Chief Information 

Officer or by such other employee or 

employees of the Commission as may be 

designated from time to time by the 

Chief Information Officer. The Chief 

Information Officer may submit to the 

Commission for its consideration any 

matter which has been delegated in this 

paragraph. Nothing in this paragraph 

prohibits the Commission, at its 

election, from exercising the authority 

delegated in this paragraph. The 

authority delegated to the Chief 

Information Officer by paragraph (c) of 

this section shall include: 

(1) With respect to all pre-enactment 

and transition swaps required to be 

reported by this part, the authority to 

determine the dates and times at which 

data concerning such swaps shall be 

reported pursuant to this part. 

(2) With respect to all pre-enactment 

swaps or transition swaps in existence 

on or after April 25, 2011: 

(i) The authority to determine the 

manner, format, coding structure, and 

electronic data transmission standards 

and procedures acceptable to the 

Commission for the purposes of 

paragraphs (a) and (b) of this section; 

and 

(ii) The authority to determine 

whether the Commission may permit or 

require use by reporting entities or 

counterparties in reporting preenactment or transition swaps in 

existence on or after April 25, 2011, of 

one or more particular data standards 

(such as FIX, FpML, ISO 20022, or some 

other standard), in order to 

accommodate the needs of different 

communities of users. 

(d) The Chief Information Officer 

shall publish from time to time in the 

Federal Register and on the Web site of 

the Commission the dates and times, 

format, data schema, and electronic data 

transmission methods and procedures 

for reporting acceptable to the 

Commission with respect to swap data 

reporting pursuant to this section. 

§ 46.9 Voluntary supplemental reporting 

(a) For purposes of this section, the 

term voluntary, supplemental report 

means any report of swap data for a preenactment or transition swap to a swap 

data repository that is not required to be 

made pursuant to this part or any other 

part in this chapter. 

(b) A voluntary, supplemental report 

for a pre-enactment or transition swap 

may be made only by a counterparty to 

the swap in connection with which the 

voluntary, supplemental report is made, 

or by a third-party service provider 

acting on behalf of a counterparty to the 

swap. 

(c) A voluntary, supplemental report 

for a pre-enactment or transition swap 

may be made only after the initial data 

report for the swap required by section 

46.3(a) or the report required by section 

46.3(b), as applicable, has been made. 

(d) A voluntary, supplemental report 

for a pre-enactment or transition swap 

may be made either to the swap data 

repository to which the initial data 

report for the swap required by section 

46.3(a) or the report required by section 

46.3(b), as applicable, has been made, or 

to a different swap data repository. 

(e) A voluntary, supplemental report 

for a pre-enactment or transition swap 

must contain: 

(1) An indication that the report is a 

voluntary, supplemental report. 

(2) The swap data repository identifier 

created for the swap by the automated 

systems of the swap data repository to 

which the initial data report required by 

section 46.3(a) or the report required by 

section 46.3(b), as applicable, has been 

made. 

(3) An indication of the identity of the 

swap data repository to which the initial 

data report required by section 46.3(a) 

or the report required by section 46.3(b), 

as applicable, has been made, if the 

voluntary supplemental report is made 

to a different swap data repository. 

(4) If the pre-enactment or transition 

swap was in existence on or after April 

25, 2011, the legal entity identifier (or 

substitute identifier) of the counterparty 

making the voluntary, supplemental 

report. 

(5) If applicable, an indication that the 

voluntary, supplemental report is made 

pursuant to the laws or regulations of 

any jurisdiction outside the United 

States. 

(f) If a counterparty that has made a 

voluntary, supplemental report 

discovers any errors in the swap data 

included in the voluntary, supplemental 

report, the counterparty must report a 

correction of each such error to the 

swap data repository to which the 

voluntary, supplemental report was 

made, as soon as technologically 

practicable after discovery of any such 

error. 

§ 46.10 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. 

§ 46.11 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 

swaps for which this part requires 

reporting of continuation data, reporting 

counterparties reporting state data as 

provided in part 45 of this chapter may 

fulfill the requirement to report errors or 

omissions by making appropriate 

corrections in their next daily report of 

state data pursuant to part 45 of this 

chapter. 

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

the reporting counterparty as 

determined pursuant to § 46.5, 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. As soon as technologically 

practicable after receiving such notice, 

the reporting counterparty shall report a 

correction of each such error or 

omission to the swap data repository. 

(d) Each swap counterparty reporting 

corrections to errors or omissions in 

data previously reported as required by 

this part shall report such corrections in 

the same format as it reported the 

erroneous or omitted data. 

Appendix 1 to Part 46—Tables of 

Minimum Primary Economic Terms 

Data For Pre-Enactment and Transition 

Swaps 

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BILLING CODE C 

Issued in Washington, DC on May 17, 2012 

by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

Appendix to Swap Data 

Recordkeeping and Reporting 

Requirements: Pre-Enactment and 

Transition Swaps—Commission Voting 

Summary and Statement of Chairman 

Gensler 

Note: The following appendix will not 

appear in the Code of Federal Regulations. 

On this matter, Chairman Gensler and 

Commissioner Sommers, Chilton, 

O’Malia and Wetjen voted in the 

affirmative; no Commissioner voted in 

the negative. 

Appendix 2—Statement of Chairman 

Gary Gensler 

I support the final rule establishing swap 

data recordkeeping and reporting 

requirements for pre-enactment and 

transition swaps, collectively called 

‘‘historical swaps.’’ One of the main goals of 

the Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank Act) is 

to bring transparency to the unregulated 

swaps market. Starting this summer, light 

will shine for the first time on this market 

with the reporting both to the public and to 

regulators of nearly every swap transaction. 

The historical swaps rule builds on already 

completed swaps market transparency rules. 

It will help give regulators a complete picture 

of the swaps market, including data on swaps 

in existence at the time of the Dodd-Frank 

Act’s passage. 

The rule provides market participants 

guidance on the reporting requirements for 

pre-enactment swaps (those entered into 

before the enactment of the Dodd-Frank Act) 

as well as transition swaps (those entered 

into between the enactment date of the law 

and the applicable compliance date for swap 

data reporting). The rule specifies clearly 

what records must be kept and what data 

must be reported to swap data repositories 

(SDRs) with respect to these historical swaps. 

It ensures that the historical swaps data 

needed by regulators is available through 

SDRs beginning on the compliance date for 

swap data reporting. 

The rule achieves the reporting benefits of 

Dodd-Frank while reducing the costs and 

burdens associated with recordkeeping for 

historical swaps. Recordkeeping 

requirements for these swaps are minimized 

for counterparties who are not swap dealers 

or major swap participants. These 

counterparties are permitted to maintain 

records in any format they choose, and are 

allowed five days to retrieve their records. 

[FR Doc. 2012–12531 Filed 6–11–12; 8:45 am] 

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