This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

16689 

Vol. 79, No. 58 

Wednesday, March 26, 2014 

1The group includes staff from the Division of 

Market Oversight, the Division of Clearing and Risk, 

the Division of Swap Dealer and Intermediary 

Oversight, the Division of Enforcement, the Office 

of the Chief Economist, the Office of Data and 

Technology, and the Office of General Counsel. 

2Press Release, CFTC to Form an Interdivisional 

Working Group to Review Regulatory Reporting 

(Jan. 21, 2014), available at http://www.cftc.gov/

PressRoom/PressReleases/pr6837-14. 

3Public Law 111–203, 124 Stat. 1376 (2010). 

4See also CEA section 1a(40)(E), 7 U.S.C. 

1a(40)(E). 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Chapter I 

RIN 3038–AE12 

Review of Swap Data Recordkeeping 

and Reporting Requirements 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Request for comment. 

SUMMARY: On January 21, 2014, the 

Commodity Futures Trading 

Commission (‘‘Commission’’ or 

‘‘CFTC’’) announced the formation of an 

interdivisional staff working group 

(‘‘Working Group’’) 1 to review its swap 

data reporting rules and related 

provisions set forth in part 45 of the 

Commission’s regulations.2 Among 

other objectives, the Working Group was 

asked to identify and make 

recommendations to resolve reporting 

challenges, and to consider data field 

standardization and consistency in 

reporting by market participants. 

Consistent with those efforts, and 

informed by the Working Group’s 

analysis to date, the Commission today 

requests comment on specific swap data 

reporting and recordkeeping rules to 

help determine how such rules are 

being applied and to determine whether 

or what clarifications, enhancements or 

guidance may be appropriate. This 

request for comment is limited to part 

45 and related provisions. 

DATES: Comments must be received on 

or before May 27, 2014. 

ADDRESSES: You may submit comments, 

identified by RIN 3038–AE12, by any of 

the following methods: 

• CFTC Web site: Via Comments 

Online, at http://comments.cftc.gov. 

Follow the instructions for submitting 

comments through the Web site. 

• Mail: Melissa D. Jurgens, Secretary 

of the Commission, Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st Street NW., 

Washington, DC 20581. 

• Hand Delivery/Courier: Same as 

‘‘Mail,’’ above. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Please submit your comments using 

only one method. All comments must be 

submitted in English, or if not, 

accompanied by an English translation. 

Comments may be posted as received to 

http://www.cftc.gov. You should submit 

only information that you wish to make 

available publicly. If you wish the 

Commission to consider information 

that may be exempt from disclosure 

under the Freedom of Information Act, 

a petition for confidential treatment of 

the exempt information may be 

submitted according to the established 

procedures in CFTC Regulation 145.9 

(17 CFR 145.9). 

The Commission reserves the right, 

but shall have no obligation, to review, 

pre-screen, filter, redact, refuse, or 

remove any or all of your submission 

from www.cftc.gov that it may deem to 

be inappropriate for publication, such as 

obscene language. All submissions that 

have been redacted or removed that 

contain comments on the merits of the 

rulemaking will be retained in the 

public comment file and will be 

considered as required under the 

Administrative Procedure Act and other 

applicable laws, and may be accessible 

under the Freedom of Information Act. 

FOR FURTHER INFORMATION CONTACT: 

Vincent McGonagle, Director, 202–418– 

5387, vmcgonagle@cftc.gov, Stuart 

Armstrong, Special Counsel, 202–418– 

5095, sarmstrong@cftc.gov, Laurie 

Gussow, Special Counsel, 202–418– 

7623, lgussow@cftc.gov, Sebastian Pujol 

Schott, Associate Director, 202–418– 

5641, sps@cftc.gov, Daniel Bucsa, 

Associate Director, 202–418–5435, 

dbucsa@cftc.gov, Division of Market 

Oversight; Brian O’Keefe, Deputy 

Director, 202–418–5658, bokeefe@

cftc.gov, Eric Lashner, Special Counsel, 

202–418–5393, elashner@cftc.gov, 

Division of Clearing and Risk; Rajal 

Patel, Special Counsel, 202–418–5261, 

rpatel@cftc.gov, Division of Swap Dealer 

and Intermediary Oversight; Jeffrey 

Burns, Assistant General Counsel, 202– 

418–5051, jburns@cftc.gov, Office of 

General Counsel, Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st Street NW., 

Washington, DC 20581. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Introduction 

II. Request for Comment 

III. Issues and Questions 

A. Confirmation Data 

B. Continuation Data 

C. Transaction Types, Entities, and 

Workflows 

D. PET Data and Appendix 1 

E. Reporting of Cleared Swaps 

F. Other SDR and Counterparty Obligations 

G. Swap Dealer/Major Swap Participant 

Registration and Compliance 

H. Risk 

I. Ownership of Swap Data and Transfer of 

Data Across SDRs 

J. Additional Comment 

I. Introduction 

Title VII of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (the ‘‘Dodd-Frank Act’’) 3 amended 

the Commodity Exchange Act (‘‘CEA’’ or 

‘‘Act’’) to establish a comprehensive 

new regulatory framework for swaps. 

Amendments to the CEA included the 

addition of provisions requiring the 

retention and reporting of data regarding 

swap transactions, including provisions 

designed to enhance transparency, 

promote standardization, and reduce 

systemic risk. Section 727 of the DoddFrank Act added to the CEA new section 

2(a)(13), which establishes requirements 

for the real-time reporting and public 

availability of swap transaction data, 

and requires all swaps, whether cleared 

or uncleared, to be reported to registered 

swap data repositories (‘‘SDRs’’).4

Sections 723 and 729 of the Dodd-Frank 

Act added to the CEA, respectively, 

sections 2(h)(5) and 4r, which, among 

other things, establish reporting 

requirements for swaps in effect as of 

the enactment of the Dodd-Frank Act, as 

well as swaps entered into after such 

enactment but prior to the effective date 

for compliance with final swap data 


emcdonald on DSK67QTVN1PROD with PROPOSALS
16690 Federal Register / Vol. 79, No. 58 / Wednesday, March 26, 2014 / Proposed Rules 

5Regulations governing core principles and 

registration requirements for, and the duties of, 

SDRs are set forth in part 49 the Commission’s 

regulations. See Swap Data Repositories: 

Registration Standards, Duties and Core Principles, 

76 FR 54538 (Sept. 1, 2011). 

6CEA section 21(b)(1)(A), 7 U.S.C. 24a(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.’’ 

7CEA section 21(b)(1)(B), 7 U.S.C. 24a(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.’’ 

8CEA section 21(b)(2), 7 U.S.C. 24a(b)(2), 

provides that ‘‘the Commission shall prescribe data 

collection and data maintenance standards for swap 

data repositories.’’ 

9CEA section 21(b)(3), 7 U.S.C. 24a(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.’’ 

10Real-Time Public Reporting of Swap 

Transaction Data, 77 FR 1182 (Jan. 9, 2012). 

11Swap Data Recordkeeping and Reporting 

Requirements, 77 FR 2136 (Jan. 13, 2012). 

12Swap Data Recordkeeping and Reporting 

Requirements: Pre-Enactment and Transition 

Swaps, 77 FR 35200 (June 12, 2012) (‘‘Historical 

Swap Reporting Rule’’). 

13A ‘‘pre-enactment swap’’ is a swap entered into 

prior to the enactment of the Dodd-Frank Act (July 

21, 2010), the terms of which have not expired as 

of the date of enactment of the Dodd-Frank Act. See 

Historical Swap Reporting Rule at 35226. 

14A ‘‘transition swap’’ is a swap entered into on 

or after the enactment of the Dodd-Frank Act (July 

21, 2010), and prior to the applicable compliance 

date for reporting historical swaps data pursuant to 

part 46 of the Commission’s regulations. See 

Historical Swap Reporting Rule at 35227. 

15See also part 44 of the Commission’s 

regulations (Interim Final Rule for Reporting PreEnactment Swap Transactions, 75 FR 63080 (Oct. 

14, 2010); and Reporting Certain Post-Enactment 

Swap Transactions, 75 FR 78892 (Dec. 17, 2010)), 

which established certain record retention 

requirements for historical swaps, pending the 

adoption of the Commission’s final rules, set forth 

at part 46, regarding recordkeeping and reporting 

with respect to historical swaps. 

16See SDR Rules, supra note 5. 

17For purposes of this request for comment, the 

Commission uses the term ‘‘reporting entity’’ to 

refer to any person, registrant or non-registrant that 

has an obligation to report data pursuant to part 45 

of the Commission’s regulations, including SDs, 

MSPs, unregistered swap counterparties, SEFs, 

DCMs, and DCOs. The Commission is also 

interested in receiving responses from persons that 

are complying with part 45 reporting requirements 

pursuant to the terms and conditions set forth in 

staff no-action relief such as clearinghouses with 

no-action relief (‘‘no-action CCPs’’) or qualified 

multilateral trading facilities (‘‘QMTFs’’) and 

foreign boards of trade (‘‘FBOTs’’) complying with 

FBOT registration regulations. See CFTC Division of 

Clearing and Risk, Letter to Eurex Clearing AG, NoAction Letter No. 14–27 (Mar. 10, 2014); CFTC 

Division of Market Oversight and Division of Swap 

Dealer and Intermediary Oversight, Conditional NoAction Relief with respect to Swaps Trading on 

Certain Multilateral Trading Facilities Overseen by 

Competent Authorities Designated by European 

Union Member States, No-Action Letter No. 14–16 

(Feb. 12, 2014); CFTC Division of Clearing and Risk, 

Letter to ASX Clear (Futures) Pty Limited, NoAction Letter No. 14–07 (Feb. 6, 2014); CFTC 

Division of Clearing and Risk, Letter to Japan 

Securities Clearing Corporation, No-Action Letter 

No. 13–73 (Dec. 19, 2013); CFTC Division of 

Clearing and Risk, Letter to LCH.Clearnet SA, NoAction Letter No. 13–43 (July 11, 2013), CFTC 

Division of Clearing and Risk, Letter to Singapore 

Exchange Derivatives Clearing Limited, No-Action 

Letter No. 12–63 (Dec. 21, 2012); CFTC Division of 

Clearing and Risk, Letter to Japan Securities 

Clearing Corporation, No-Action Letter No.12–56 

(Dec. 17, 2012). Staff no-action letters (‘‘NALs’’) are 

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

DoddFrankAct/CurrentlyEffectiveStaffLetters/

index.htm. 

The list of registered entities with reporting 

obligations includes reporting entities fully 

registered with the Commission and entities that 

have received provisional registration and/or 

temporary registration. Specifically, as of March 1, 

2014, it includes 98 SDs; 23 SEFs; 18 DCMs; 15 

DCOs; and two MSPs. Not all entities that are 

potential swap reporting entities currently execute 

or clear swaps. For example, 9 of the 15 registered 

DCOs currently clear swaps. 

recordkeeping and reporting rules 

prescribed by the Commission. 

Section 728 of the Dodd-Frank Act 

added to the CEA new section 21, which 

established SDRs as a new category of 

registered entity in order to facilitate the 

collection and maintenance of swap 

data as prescribed by the Commission, 

and to facilitate access to such data by 

regulators.5 In addition, new section 

21(b) directs the Commission to 

prescribe standards for swap data 

recordkeeping and reporting.6 These 

standards are to apply to both registered 

entities and counterparties involved 

with swaps.7 CEA section 21(b) further 

directs the Commission to prescribe 

data standards for SDRs 8 and mandates 

that such standards be comparable to 

those for derivatives clearing 

organizations.9 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.’’ 

After extensive consultation, 

opportunities for public comment, and 

coordination with foreign and domestic 

regulators, the Commission added a new 

part 43 to its regulations,10 which sets 

forth rules for the free, real-time public 

reporting of swap transaction data; new 

part 45,11 which establishes swap data 

recordkeeping rules, as well as rules for 

the reporting of swap transaction data to 

a registered SDR; new part 46,12 which 

sets forth swap data recordkeeping and 

reporting rules for pre-enactment 

swaps 13 and transition swaps 14

(collectively, ‘‘historical swaps’’); 15 and 

new part 49, which governs SDR 

operations and Commission access to 

SDR data (‘‘SDR Rules’’).16 Collectively, 

these provisions provide the public and 

market participants with an 

unprecedented level of transparency 

into swaps markets, create rigorous 

recordkeeping and data reporting 

regimes with respect to swaps, and 

enable Commission oversight of swap 

markets and market participants. 

Swap counterparties, including those 

that are required to be registered with 

the Commission as swap dealers (‘‘SD’’) 

or as major swap participants (‘‘MSP’’), 

have swap data reporting obligations 

under part 43, part 45 and part 46 

(collectively, the ‘‘swap data reporting 

rules’’). The swap data reporting rules 

also place reporting obligations on 

derivatives clearing organizations 

(‘‘DCOs’’) that clear swaps; designated 

contract markets (‘‘DCMs’’) that list 

swaps for trading; and swap execution 

facilities (‘‘SEFs’’). At present there are 

over 150 potential swap data reporting 

entities registered 17 with the 

Commission, each of which will have its 

own business and data standards for 

listing, executing or clearing swaps in 

one or more of the five asset classes 

recognized for the purposes of the swap 

data reporting rules—interest rates, 

credit, equity, foreign exchange, and 

other commodity. In addition, swaps 

data may currently be reported to any 

registered SDR, each of which will also 

have its own data standards. 

The Commission remains committed 

to the regulatory objectives set forth and 

established in these rules. However, to 

ensure that the swap data reporting and 

SDR rules are effective, efficient, and 

provide the necessary regulatory 

information, the Commission requests 

public comment on the questions below, 

which focus on the swap data 

recordkeeping and reporting 

requirements of part 45 and related 

regulatory provisions. 

II. Request for Comment 

The Commission is soliciting 

comment from all interested parties 

regarding part 45 and related provisions 

of the swap data reporting and SDR 

rules. Questions are generally grouped 

according to the applicable regulatory 

provision. Each series of questions 

includes a brief explanatory paragraph 

intended to provide context for the 

questions presented. Relevant topics 

include, among other things, the 

reporting of primary economic terms 

(‘‘PET’’), confirmation, and continuation 

data; the manner in which the reporting 

rules address diversity of transaction 

types, business models, and data flows 

present in the swaps market; the 

reporting of cleared swaps; and data 

ownership issues and data 

harmonization. 


emcdonald on DSK67QTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 58 / Wednesday, March 26, 2014 / Proposed Rules 16691 

18 17 CFR 45.1 (defining required swap creation 

data as ‘‘all primary economic terms data for a swap 

in the swap asset class in question, and all 

confirmation data for the swap’’). 

19 17 CFR 45.1 (defining primary economic terms 

as ‘‘all of the data elements necessary to fully report 

all of the primary economic terms of a swap in the 

swap asset class of the swap in question’’). 

20 17 CFR 45.1 (defining ‘‘confirmation data’’). 

21 Id. 

22See generally, 17 CFR 45.4. 

23See 17 CFR 45.1 (defining ‘‘state data’’). 

24See generally, 17 CFR 45.4. 

25 Id. 

26See CFTC Division of Market Oversight, 

Extension of Time-Limited No-Action Relief for 

Swap Dealers and Major Swap Participants from 

Compliance with Reporting Obligations Under 17 

CFR 45.4(b)(2)(ii), No-Action Letter No. 13–34 (June 

26, 2013); CFTC Division of Market Oversight, 

Time-Limited No-Action Relief for Swap Dealers 

and Major Swap Participants From Compliance 

With Reporting Obligations Under 17 CFR 

45.4(b)(2)(ii), No-Action Letter No. 12–55 (Dec. 10, 

2013). 

27CEA section 2(h)(7)(C), 7 U.S.C. 2(h)(7)(C); see 

also 17 CFR 1.3(mmm). 

Commenters’ responses should 

identify the specific question or subquestion that they are addressing in 

each response. Responses should 

consider the oversight functions 

performed by the Commission, 

including, but not limited to, financial 

surveillance; market surveillance; risk 

monitoring; and trade practice 

surveillance. 

III. Issues and Questions 

A. Confirmation Data (§ 45.3): What 

terms of a confirmation of a swap 

transaction should be reported to an 

SDR as ‘‘confirmation data’’? 

Part 45 requires the reporting of 

required swap creation data,18 which 

includes PET data 19 and ‘‘confirmation 

data,’’ defined as ‘‘all of the terms of a 

swap matched and agreed upon by the 

counterparties in confirming the 

swap.’’ 20 The Commission requests 

comment on the following questions 

regarding confirmation data that 

memorializes the agreement of the party 

to all terms of a swap. 

1. What information should be 

reported to an SDR as confirmation 

data? Please include specific data 

elements and any necessary definitions 

of such elements. 

a. For confirmations that incorporate 

terms by reference (e.g., ISDA Master 

Agreement; terms of an Emerging 

Markets Trade Association (‘‘EMTA’’)), 

which of these terms should be reported 

to an SDR as confirmation data? 

2. Should the confirmation data 

reported to an SDR regarding cleared 

swaps be different from the 

confirmation data reported to an SDR 

regarding uncleared swaps? If so, how? 

3. Should the confirmation data 

reported to an SDR regarding swaps that 

are subject to the trade execution 

requirement in CEA section 2(h)(8) be 

different from the confirmation data 

reported to an SDR regarding: (a) Swaps 

that are required to be cleared but not 

subject to the trade execution 

requirement; (b) swaps that are not 

subject to the clearing requirement but 

that are intended to be cleared at the 

time of execution; (c) swaps that are 

voluntarily submitted to clearing at 

some point after execution (e.g., 

backloaded trades); and (d) uncleared 

swaps? If so, how? 

4. More generally, please describe any 

operational, technological, or other 

challenges faced in reporting 

confirmation data to an SDR. 

B. Continuation Data (§ 45.4): How can 

the Commission ensure that timely, 

complete and accurate continuation 

data is reported to SDRs, and that such 

data tracks all relevant events in the life 

of a swap? 

Part 45 of the Commission’s 

regulations defines ‘‘required swap 

continuation data’’ as ‘‘all of the data 

elements that must be reported during 

the existence of a swap to ensure that all 

data concerning the swap in the SDR 

remains current and accurate, and 

includes all changes to PET data 

occurring during the existence of the 

swap.’’ 21 A swap’s continuation data 

includes all lifecycle event data if the 

swap is reported using the lifecycle 

reporting method,22 or all state data 23 if 

the swap is reported using the snapshot 

reporting method.24 In addition, 

continuation data also includes all 

valuation data for the swap.25

Since implementation of part 45, 

market participants have raised a 

number of questions with respect to 

how certain events in the life of a swap 

should be represented when reporting 

continuation data. Divergent methods of 

reporting continuation data may 

introduce challenges to tracking the life 

of a swap. In addition, some non-SD/

MSP counterparties have indicated that 

they have sometimes encountered 

difficulties in reporting continuation 

data to SDRs and in accessing data 

reported on their behalf by SDs and 

MSPs. Accordingly, the Commission 

requests comment on the following 

questions regarding continuation data. 

5. What processes and tools should 

reporting entities implement to ensure 

that required swap continuation data 

remains current and accurate? 

6. Swaps should be linked when new 

swaps result from the assignment, 

netting, compression, clearing, 

novation, allocation, or option exercise 

of existing swaps (or other events 

wherein new swaps result from existing 

swaps). 

a. What is the most effective and 

efficient method for achieving this link 

(including information regarding the 

time of the relevant event)? 

b. How should reporting entities 

identify the reason why two swaps are 

linked (e.g., identify that swap A is 

linked to swaps B and C in an SDR or 

across multiple SDRs because swaps B 

and C arose from the clearing and 

novation of swap A)? 

c. Aside from those events set forth in 

part 45, are there other events that 

require linkage between related swap 

transactions? 

d. How should related swaps reported 

to different SDRs be linked? 

i. Snapshot/State/Lifecycle Methods 

(§ 45.4) 

7. What are the benefits and/or 

disadvantages of reporting continuation 

data using: (i) The lifecycle reporting 

method; and (ii) the snapshot reporting 

method? 

a. Are there events or information that 

can be represented more effectively 

using one of the reporting methods 

rather than the other? 

b. Should all SDRs be required to 

accept both the snapshot and lifecycle 

methods for reporting continuation 

data? 

ii. Valuation Data Reporting (§§ 45.4(b), 

45.4(c), and NALs 13–34 and 12–55) 26

8. How can valuation data most 

effectively be reported to SDRs to 

facilitate Commission oversight? How 

can valuation data most effectively be 

reported to SDRs (including specific 

data elements), and how can it be made 

available to the Commission by SDRs? 

a. Should SDs and MSPs continue to 

be required by the swap data reporting 

rules to provide their own valuation 

data for cleared swaps to SDRs? If so, 

what are the benefits and challenges 

associated with this valuation reporting? 

b. What challenges and benefits are 

associated with unregistered swap 

counterparties (both financial entities 27

and non-financial entities) reporting 

valuation data for uncleared swaps to 

SDRs on a quarterly basis? 

iii. Events in the Life of a Swap (§ 45.4) 

9. Please: (i) Identify and (ii) describe 

the complete range of events that can 

occur in the life of a swap. Please also 

address whether, and if so how, 

reporting entities should report each 

such event. 

a. How should events in the life of a 

swap be represented in SDR data? For 


emcdonald on DSK67QTVN1PROD with PROPOSALS
16692 Federal Register / Vol. 79, No. 58 / Wednesday, March 26, 2014 / Proposed Rules 

28See Staff Guidance on Swaps Straight-Through 

Processing (Sept. 26, 2013), available at http://

www.cftc.gov/ucm/groups/public/@newsroom/

documents/file/stpguidance.pdf; CFTC Division of 

Clearing and Risk and Division of Market Oversight, 

Time-Limited No-Action Relief for Swap Execution 

Facilities from Compliance with Certain 

Requirements of Commission Regulation 37.9(a)(2) 

and 37.203(a), No-Action Letter No. 13–66 (Oct. 25, 

2013). 

29See 7 U.S.C. 6r(a)(3) (providing that, with 

respect to a swap in which only one counterparty 

is an SD or MSP, the SD or MSP shall report the 

swap; with respect to a swap in which one 

counterparty is an SD and the other an MSP, the 

SD shall report the swap; and with respect to any 

other swap, the counterparties to the swap shall 

select a counterparty to report the swap). 

30See CFTC Division of Market Oversight, 

Additional Time-Limited No-Action Relief for 

Bespoke or Complex Swaps from Certain Swap Data 

Reporting Requirements of Parts 43 and 45 of the 

Commission’s Regulations, No-Action Letter No. 

13–35 (June 27, 2013) (‘‘NAL 13–35’’); CFTC 

Division of Market Oversight, Time-Limited NoAction Relief for Bespoke or Complex Swaps from 

Certain Swap Data Reporting Requirements of Parts 

43 and 45 of the Commission’s Regulations, NoAction Letter No.12–39 (Nov. 30, 2012) (‘‘NAL 12– 

39’’). 

31See CFTC Division of Clearing and Risk, NoAction Relief from Required Clearing for Swaps 

Resulting from Multilateral Portfolio Compression 

Exercises, No-Action Letter No. 13–01 (Mar. 18. 

2013); CFTC Division of Market Oversight, TimeLimited No-Action Relief for Agents from the PostAllocation Swap Timing Requirement of 

§ 45.3(e)(ii)(A) of the Commission’s Regulations, 

No-Action Letter No. 12–50 (Dec. 13, 2012). 

32See CFTC Division of Market Oversight, TimeLimited No-Action Relief from (i) Parts 43 and 45 

Reporting for Prime Brokerage Transactions, and (ii) 

Reporting of Unique Swap Identifiers in Related 

Trades under Part 45 by Prime Brokers, No-Action 

Letter No. 12–53 (Dec. 17, 2012). 

33See CFTC Division of Market Oversight, Staff 

No-Action Relief from the Reporting Requirements 

of § 32.3(b)(1) of the Commission’s Regulations, and 

Certain Recordkeeping Requirements of § 32.3(b), 

for End Users Eligible for the Trade Option 

Exemption, No-Action Letter No. 13–08 (Apr. 5, 

2013). 

example, should an ‘‘event type’’ 

identifier, as well as a description of the 

specific event, be required? 

10. Can swap data reporting be 

enhanced so that the current state of a 

swap in an SDR (e.g., open, cancelled, 

terminated, or reached maturity) can be 

determined more efficiently and, if so, 

how? 

a. What role should SDRs play in 

auditing swaps data to help identify the 

current state of a swap? 

b. Should reporting entities and/or 

SDRs be required to take any actions 

upon the termination or maturity of a 

swap so that the swap’s status is readily 

ascertainable and, if so what should 

those requirements be? 

c. Should swaps that are executed on 

or pursuant to the rules of a DCM or 

SEF, but which are not accepted for 

clearing and are therefore void ab initio, 

continue to be reported to and identified 

in SDR data? Why or why not? If so, 

how? 28

i. Should the swap data reporting 

rules be enhanced or further clarified to 

address void ab initio swaps? 

11. Should the Commission require 

periodic reconciliation between the data 

sets held by SDRs and those held by 

reporting entities? 

iv. Change in Status of Reporting 

Counterparty (§ 45.8) 

12. Commission regulation 45.8 

establishes a process for determining 

which counterparty to a swap shall be 

the reporting counterparty. Taking into 

account statutory requirements, 

including the reporting hierarchy in 

CEA section 4r(a)(3),29 what challenges 

arise upon the occurrence of a change in 

a reporting counterparty’s status, such 

as a change in the counterparty’s 

registration status? In such 

circumstances, what regulatory 

approach best promotes uninterrupted 

and accurate reporting to an SDR? 

C. Transaction Types, Entities, and 

Workflows: Can the Swap Data 

Reporting Rules be Clarified or 

Enhanced to Better Accommodate 

Certain Transactions and Workflows 

Present in the Swaps Market? 

Market participants have requested 

clarification from Commission staff 

regarding the appropriate manner to 

report certain swap transactions and 

workflows that are not explicitly 

addressed in the swap data reporting 

rules. Accordingly, the Commission 

requests comment related to the specific 

questions below. 

13. Please describe all data 

transmission processes arising from the 

execution, confirmation, clearing, and 

termination of a swap, both cleared and 

uncleared. Please include in your 

response any processes arising from all 

relevant platforms and methods of 

execution. 

14. Please identify any Commission 

rules outside of part 45 that impact 

swap data reporting pursuant to part 45. 

How do such other rules impact part 45 

reporting? 

15. What are the challenges presented 

to reporting entities and other 

submitters of data when transmitting 

large data submissions to an SDR? 

Please include the submission methods 

utilized and the technological and 

timing challenges presented. 

i. Bespoke Transactions (§ 45.3, 

Appendix 1 to Part 45, and NALs 13– 

35, and 12–39) 30

16. Market participants have 

indicated that they face challenges 

electronically representing all required 

data elements for swap transactions 

because those elements have not yet 

been incorporated into standard 

industry representations (e.g., FpML, 

FIXML). In particular, various market 

participants have indicated that these 

challenges impact reporting to SDRs. 

What is the most efficient methodology 

or process to standardize the data 

elements of a bespoke, exotic or 

complex swap, to ensure that all 

required creation data is electronically 

represented when reported to the SDR? 

Do these challenges vary depending on 

the asset class? If so, how? 

ii. Allocations and Compressions 

(§§ 45.3, 45.4, NALs 13–01 and 12– 

50) 31

17. Please describe any challenges 

associated with the reporting of 

allocations. How should allocation data 

elements (i.e., indications of whether 

swaps will be allocated, as well as the 

identities of entities to which portions 

of executed swaps are allocated) be 

reported to SDRs? 

18. How should swaps resulting from 

compression exercises and risk 

mitigation services be reported to, and 

identified in, an SDR so that the 

Commission is able to effectively review 

these exercises and determine what 

swaps result from a specific exercise? 

a. Please describe any technological, 

operational, or logistical challenges 

associated with reporting of such swap 

transactions. 

iii. Prime Brokerage (NAL 12–53) 32

19. Please describe any challenges 

associated with the reporting of prime 

brokerage swap transactions (e.g., 

challenges related to transactions 

executed either bilaterally or on a 

platform and/or involving different asset 

classes)? 

iv. Commodity Trade Options (NAL 13– 

08) 33

20. Under Commission regulation 

32.3(b)(1), swap counterparties 

generally are required to report trade 

options pursuant to the reporting 

requirements of part 45 if, during the 

previous twelve months, they have 

become obligated to report under part 

45 as the reporting counterparty in 

connection with any non-trade option 

swaps. Under Commission regulation 

32.3(b)(2), trade options that are not 

otherwise required to be reported to an 

SDR under part 45 are required to be 

reported to the Commission by both 

counterparties to the transaction 

through an annual Form TO filing. 


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34See note 17, supra. 

35Staff no-action letters are available at http://

www.cftc.gov/LawRegulation/DoddFrankAct/

CurrentlyEffectiveStaffLetters/index.htm. 

36See CFTC Division of Market Oversight and 

Division of Clearing and Risk, No-Action Relief for 

Swaps Between Affiliated Counterparties That Are 

Neither Swap Dealers Nor Major Swap Participants 

from Certain Swap Data Reporting Requirements 

Under Parts 45, 46, and Regulation 50.50(b) of the 

Commission’s Regulations, No-Action Letter No. 

13–09 (Apr. 5, 2013). 

37Commission regulation 45.6 provides that level 

two reference data for each swap counterparty, 

consisting of the identity of the counterparty’s 

ultimate parent, shall be reported into a level two 

reference database. The Commission shall 

determine the location of the level two reference 

database by means of a Commission order that is 

published in the Federal Register and on the 

Commission’s Web site. The order shall include 

notice of the location of the level two reference 

database and information concerning the procedure 

and requirements for reporting level two reference 

data to the database. The obligation to report level 

two reference data does not apply until the 

Commission has determined the location of the 

level two reference database. As of March 1, 2014, 

the obligation to report level two reference data 

pursuant to Commission regulation 45.6 does not 

apply. 

38See CFTC Division of Market Oversight, NoAction Relief from the Commodity Exchange Act 

Sections 2(h)(8) and 5(d)(9) and from Commission 

Regulation § 37.9 for Swaps Executed as Part of a 

Package Transaction, No-Action Letter No. 14–12 

(Feb. 10, 2014). 

Please describe any challenges 

associated with the reporting of 

commodity trade options, whether 

reported to an SDR or to the 

Commission on Form TO. 

v. Swaps Executed or Cleared on or by 

FBOTs, No-Action CCPs, QMTFs, and 

Other Non-Registrants/Exempt Entities 

(§§ 45.3, 45.4, 45.5, and NALs 14–27, 

14–16, 14–07, 13–73, 13–43, 13–33, 12– 

63, and 12–56) 34

21. Are there instances in which 

requirements of CFTC regulations or 

reliance on exemptive or staff no-action 

relief 35 result in more than one party 

reporting data to an SDR regarding a 

particular swap? If so, how should such 

duplicative reporting be addressed? 

What should be the role of the reporting 

entities, as well as other submitters of 

data, and SDRs in identifying and 

deleting duplicative reports? What 

solutions should be implemented to 

prevent such duplicative reporting? 

22. In addition to those entities 

enumerated in Commission regulation 

45.5, should other entities involved in 

swap transactions also be permitted to 

create unique swap identifiers (‘‘USIs’’)? 

If so, please describe those situations 

and the particular rationale for any such 

expansion of the USI-creation authority. 

23. How should data reported to SDRs 

identify trading venues such as SEFs, 

DCMs, QMTFs, FBOTs, and any other 

venue? 

vi. Inter-Affiliate Swaps (§§ 45.3, 45.4, 

45.6, and NAL 13–09) 36

24. In order to understand affiliate 

relationships and the combined 

positions of an affiliated group of 

companies, should reporting 

counterparties report and identify (and 

SDRs maintain) information regarding 

inter-affiliate relationships? Should that 

reporting be separate from, or in 

addition to, Level 2 reference data set 

forth in Commission regulation 45.6? 37

If so, how? 

vii. Reliance on No-Action Relief in 

General 

25. To the extent that a reporting 

entity is, in reliance on effective noaction relief issued by Commission staff, 

reporting to an SDR in a time and/or 

manner that does not fully comply with 

the swap data reporting rules (e.g., 

outside reporting rules’ timeframe, 

required data elements missing), how 

can the reporting entity most effectively 

indicate its reliance upon such noaction relief for each affected data 

element? 

a. Are there any other challenges 

associated with the reliance on staff noaction relief with respect to compliance 

with part 45? If so, please describe them 

and explain how the swap data 

reporting rules should address those 

challenges. 

viii. Post-Priced Swaps (§§ 45.3 and 

45.4) 

26. Under the swap data reporting 

rules, are there any challenges presented 

by swaps for which the price, size, and/ 

or other characteristics of the swap are 

determined by a hedging or agreed upon 

market observation period that may 

occur after the swap counterparties have 

agreed to the PET terms for a swap 

(including the pricing methodology)? If 

so, please describe those challenges. 

ix. Complex Swap Transactions (NAL 

14–12) 38

27. Please describe how swap 

transactions such as strategies and 

packages should be represented in swap 

data reporting such that it enables the 

Commission to effectively understand 

timing and the economics of the strategy 

or package and the component swap 

transactions? 

D. PET Data and Appendix 1 (§ 45.3 and 

Appendix 1): Monitoring the Primary 

Economic Terms of a Swap 

Appendix 1 to part 45 sets forth a list 

of minimum PET terms for swap 

transactions within each of the five asset 

classes. Market participants have 

indicated that there are circumstances 

in which they face challenges in either 

the initial reporting of certain PET terms 

or the subsequent reporting of 

modifications to these terms. Market 

participants have also indicated that the 

data elements included in Appendix 1 

may not sufficiently reflect all necessary 

economic terms for various swap 

transactions. 

28. Please describe any challenges 

(including technological, logistical or 

operational) associated with the 

reporting of required data fields, 

including, but not limited to: 

a. Cleared status; 

b. Collateralization; 

c. Execution timestamp; 

d. Notional value; 

e. U.S. person status; and 

f. Registration status or categorization 

under the CEA (e.g., SD, MSP, financial 

entity). 

29. What additional data elements 

beyond the enumerated fields in 

Appendix 1 of part 45, if any, are 

needed to ensure full, complete, and 

accurate representation of swaps (both 

cleared and uncleared)? For example, 

other fields could include additional 

timestamps (for each lifecycle event, 

including clearing-related timestamps); 

clearing-related information (identity of 

futures commission merchant, clearing 

member, house vs. customer origin 

indication, mandatory clearing 

indicator, or indication of exception or 

exemption from clearing); and/or 

execution-specific terms (order type or 

executing broker). Responses should 

consider the full range of oversight 

functions performed by the 

Commission, including, but not limited 

to, financial surveillance; market 

surveillance; risk monitoring; and trade 

practice surveillance. 

a. Should the Commission require 

reporting of the identities, registration 

status, and roles of all parties involved 

in a swap transaction (e.g., special entity 

(as defined in Commission regulation 

23.401(c)); executing broker; or voice/

electronic systems)? 

b. What, if any, additional fields 

would assist the Commission in 

obtaining a more complete picture of 

swaps executed on SEFs or DCMs (e.g., 

order entry time; request for quote 

(‘‘RFQ’’), or central limit order book 

(‘‘CLOB’’), or order book; request for 

cross, blocks, and other execution 

method indicators or broker 

identification)? 

c. Are there additional data elements 

that could help the Commission fulfill 

its oversight obligations, as described 

above? 

d. Should the fact that a swap is 

guaranteed be a required data element 

for SDR reporting? If so, what 


emcdonald on DSK67QTVN1PROD with PROPOSALS
16694 Federal Register / Vol. 79, No. 58 / Wednesday, March 26, 2014 / Proposed Rules 

39See European Securities Markets Authority’s 

European Market Infrastructure Regulation 

(‘‘EMIR’’) and corresponding rules, available at 

http://www.esma.europa.eu/page/EuropeanMarket-Infrastructure-Regulation-EMIR. 

40Commission regulation 39.12(b)(6) requires a 

DCO to have a rule providing that once a swap is 

accepted for clearing by a DCO such swap is 

extinguished and is replaced by two equal and 

opposite swaps. 17 CFR 39.12(b)(6). 

41See 77 FR 2136; Statement of the Commission 

on the Approval of CME Rule 1001 at 6 (‘‘A cleared 

swap in fact comprises three separate swaps.’’), 

available at http://www.cftc.gov/ucm/groups/

public/@newsroom/documents/file/

statementofthecommission.pdf. 

42See 17 CFR 45.4(a) (‘‘[R]eporting counterparties 

and derivatives clearing organizations required to 

report swap continuation data must do so in a 

manner sufficient to ensure that all data in the swap 

data repository concerning the swap remains 

current and accurate, and includes all changes to 

the primary economic terms of the swap occurring 

during the existence of the swap.’’); see 77 FR at 

2153 (‘‘[T]he final rule requires registered entities 

and reporting counterparties to report continuation 

data in a manner sufficient to ensure that the 

information in the SDR concerning the swap is 

current and accurate, and includes all changes to 

any of the primary economic terms of the swap.’’); 

see also 17 CFR 49.11 (confirmation of data 

accuracy). 

information regarding the guarantee 

should be reported to the SDR? What 

will be the challenges presented to the 

reporting party in capturing this 

information? 

30. Have reporting entities been 

unable to report to an SDR terms or 

products that they believe are required 

under part 45 or related provisions? If 

so, please generally describe the data 

elements and/or products involved. 

a. Where a single swap has more than 

two counterparties, please comment on 

how such information should be 

provided within a single part 45 

submission (i.e., one USI)? 

31. Could the part 45 reporting 

requirements be modified to render a 

fuller and more complete schedule of 

the underlying exchange of payment 

flows reflected in a swap as agreed upon 

at the time of execution? If so, how 

could the requirements be modified to 

capture such a schedule? 

32. Taking into account the European 

Union’s reporting rules 39 and 

Commission regulation 39.19, should 

the Commission require additional 

reporting of collateral information? If so, 

how should collateral be represented 

and reported? Should there be any 

differences between how collateral is 

reported for cleared and uncleared 

swaps? 

E. Reporting of Cleared Swaps (§§ 45.3, 

45.4, 45.5, and 45.8): How Should the 

Swap Data Reporting Rules Address 

Cleared Swaps? 

The Commission has a strong 

regulatory interest in monitoring 

transactions and risk in both the cleared 

and uncleared swap markets. 

Information regarding cleared swaps 

(both voluntarily cleared and required 

to be cleared) comes directly to the 

Commission daily in the form of 

position information under Commission 

regulation 39.19. In addition, pursuant 

to the swap data reporting rules, cleared 

swap information is reported on a 

transaction basis to SDRs. The 

Commission monitors the cleared swap 

market on a transaction and position 

basis to ensure compliance with the Act 

and Commission rules, including those 

associated with trade execution and 

clearing and the clearing requirement in 

section 2(h)(1) of the Act. 

Cleared swaps currently are reported 

as three separate swaps.40 Industry 

convention refers to the original swap as 

the ‘‘alpha’’ swap and the two equal and 

opposite resulting swaps as the ‘‘beta’’ 

and ‘‘gamma’’ swaps. The Commission 

has previously determined that the 

alpha, beta, and gamma swaps, although 

related, are reported as separate swaps 

for purposes of part 45.41 Information 

regarding the alpha, beta, and gamma 

swaps in an SDR must at all times be 

current and accurate and include all 

changes to each swap throughout its 

lifecycle.42

The Commission requests comment 

on the existing cleared swaps reporting 

framework. The Commission is 

particularly interested in the extent to 

which the reporting of cleared swaps 

can be improved to: (i) Ensure 

consistency across the Commission’s 

regulations; and (ii) achieve efficiencies 

in both the Commission’s review of 

cleared swaps data and the DCOs’ 

reporting of information to the 

Commission and SDRs. In this regard, 

the Commission seeks comment on 

what additional data elements, if any, 

should be reported to an SDR with 

respect to cleared swaps that would 

provide the Commission with 

information necessary to monitor and 

track swaps created through clearing 

and resulting positions facing the DCO. 

The Commission also requests 

comment related to the specific 

questions below. 

33. Part 45 requires the reporting of 

all swaps to SDRs. The Commission 

requests comment on how cleared 

swaps should be reported. Specifically: 

a. For swaps that are subject to the 

trade execution requirement in CEA 

section 2(h)(8), and ipso facto the 

clearing requirement, do commenters 

believe that the part 45 reporting 

requirements with respect to original 

swaps (alpha) should be modified or 

waived, given that the two new 

resulting swaps (beta and gamma) will 

also be reported? 

b. For swaps that are subject to the 

clearing requirement, but not the trade 

execution requirement, do commenters 

believe that the part 45 reporting 

requirements with respect to alpha 

swaps should be modified or waived, 

given that the beta and gamma swaps 

will also be reported? 

c. For swaps that are not subject to the 

clearing requirement, but are intended 

for clearing at the time of execution, do 

commenters believe that the part 45 

reporting requirements with respect to 

alpha swaps should be modified or 

waived, given that the beta and gamma 

swaps will also be reported? 

d. Please discuss whether in each of 

the circumstances described above there 

actually is an alpha swap. 

34. In addressing the questions posed 

in items 33 (a)–(d), commenters are also 

requested to address how any 

modifications to the reporting of cleared 

swaps would be consistent with the 

swap reporting requirement in CEA 

section 2(a)(13)(G) and the restrictions 

on CFTC exemptive authority in CEA 

section 4(c)(1)(A)(i)(I). 

35. Can the existing rules be improved 

to more clearly represent how the 

clearing process impacts reporting 

obligations with respect to both the 

original swap (alpha) and the two new 

resulting swaps (beta and gamma)? If so, 

please explain. 

a. Responses should address: 

i. The reporting obligations applicable 

to alpha swaps; 

ii. The reporting obligations 

applicable to beta and gamma swaps; 

iii. Who holds the reporting 

obligation(s) for each swap; 

iv. The reporting of the linkage of 

alpha, beta, and gamma swaps; and 

v. Who has the legal right to 

determine the SDR to which data is 

reported? 

36. What steps should reporting 

entities and/or SDRs undertake to verify 

the absence of duplicate records across 

multiple SDRs for a single cleared swap 

transaction? 

37. How should cleared swap data be 

represented in the SDR to facilitate the 

Commission’s oversight of compliance 

with clearing-related rules, including 

the clearing requirement (Commission 

regulations 50.2 and 50.4) and straightthrough processing requirements 

(Commission regulations 1.74, 23.506, 

37.702(b), 38.601, and 39.12(b)(7))? 

38. What reporting technique, term, or 

flag is recommended to identify a 

cleared swap? 


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43See CFTC Division of Market Oversight, TimeLimited No-Action Relief for Swap Dealers and 

Major Swap Participants from the Reporting 

Provisions of Part 45 for CDS Clearing-Related 

Swaps, No-Action Letter No. 12–59 (Dec. 19, 2012); 

CFTC Division of Market Oversight, Extension of 

Time-Limited No-Action Relief for Swap Dealers 

and Major Swap Participants from the Reporting 

Requirements of Part 45 for CDS Clearing-Related 

Swaps, No-Action Letter No. 13–36 (June 27, 2013); 

CFTC Division of Market Oversight, Provision of 

Time-Limited No-Action Relief to DCOs and their 

Clearing Members from the SEF Registration 

Requirement and Trading Mandate under Part 37 

and from Various Reporting Requirements under 

Part 45, all in Connection with CDS ClearingRelated Swaps, No-Action Letter No. 13–86 (Dec. 

31, 2013). 

i. CDS-Clearing Related Swaps and 

Open Offer (Part 45 and NALs 12–59, 

13–36, and 13–86) 43

39. Swaps created by operation of a 

DCO’s rules related to determining the 

end-of-day settlement prices for cleared 

credit default swaps (‘‘CDS’’) are also 

known as ‘‘firm trades’’ or ‘‘clearingrelated swaps’’ (see NAL 13–86). How 

should these swaps be reported 

pursuant to the swap data reporting 

rules? 

40. Aside from ‘‘firm trades,’’ some 

swaps may be created from ‘‘open 

offer,’’ meaning there is no original 

swap between two counterparties, but 

only equal and opposite swaps between 

each of the counterparties and the 

clearinghouse. How should the swap 

data reporting rules address such 

swaps? 

ii. DCO Reporting, Netting Processes, 

and Positions (§§ 45.3 and 45.4) 

41. As described above, DCOs provide 

position data to the Commission 

pursuant to part 39 and report 

transactions to SDRs pursuant to part 

45. The Commission is aware of 

potential overlap in these data sets. 

With respect to such overlap, how can 

reporting of swaps data be made more 

efficient, while ensuring that the 

Commission continues to receive all 

data necessary to fulfill its regulatory 

responsibilities? 

42. For cleared swaps, how can the 

netting and compression of swaps and 

positions by DCOs be most effectively 

represented? 

a. Please provide recommendations 

regarding the reporting of netting and 

compression, and describe any relevant 

differences in reporting of netting and of 

compression. 

b. Are netting and compression 

different concepts in the uncleared 

swaps markets versus the cleared swap 

market? If so, how? 

F. Other SDR and Counterparty 

Obligations (§§ 45.9, 45.13, 45.14): How 

Should SDRs and Reporting Entities 

Ensure That Complete and Accurate 

Information is Reported to, and 

Maintained by, SDRs? 

When using swaps data reported to 

SDRs, the Commission must rely on the 

accuracy and completeness of such data 

throughout the life of a swap. Data 

accuracy can be achieved through, 

among other means, SDR processes 

confirming the accuracy of data 

submitted, data reconciliation exercises 

by reporting entities, and by the prompt 

reporting of errors and omissions by 

reporting entities. 

Commission regulation 45.14 requires 

registered entities and swap 

counterparties to report any errors or 

omissions in data they previously 

reported. Additionally, each nonreporting counterparty to a swap that 

discovers an error or omission with 

respect to swap data reported to an SDR 

must promptly notify the reporting 

counterparty of the error or omission. 

Commission regulation 49.11 requires 

SDRs to adopt policies and procedures 

to ensure the accuracy of swap data and 

to confirm the accuracy of all swap data 

reported pursuant to part 45. 

Commission regulation 49.11(b) 

provides—in pertinent part—that a 

registered SDR ‘‘has confirmed the 

accuracy of swap data submitted 

directly by a counterparty if the [SDR] 

has notified both counterparties of the 

data that was submitted and received 

from both counterparties 

acknowledgement of the accuracy of the 

swap data and corrections for any 

errors.’’ 

43. The Commission requests 

comment that addresses whether 

reporting entities face challenges with 

respect to complete and accurate swap 

data reporting. 

44. The Commission also requests 

comment regarding whether 

clarifications or enhancements to swap 

data reporting requirements, including 

requirements relating to the reporting of 

errors and omissions and requirements 

for data reconciliation across reporting 

entities, could facilitate accurate and 

complete reporting of data to the SDRs, 

as well as data maintained in the SDRs. 

45. Should third-party service 

providers that report part 45 data to 

SDRs on behalf of reporting entities be 

required to register with the 

Commission? 

i. Confirmation of Data Accuracy and 

Errors and Omissions (§ 45.14) 

46. Commission regulation 49.11(b) 

requires SDRs to verify with both 

counterparties the accuracy of swaps 

data reported to an SDR pursuant to part 

45. What specific, affirmative steps 

should SDRs take to verify the accuracy 

of data submitted? Please include in 

your response steps that SDRs should 

take regarding data submitted by 

reporting counterparties on behalf of 

non-reporting counterparties who are 

not participants or users of the SDR. 

47. In what situations should an SDR 

reject part 45 data from entities due to 

errors or omissions in the data? How 

should the Commission balance legal 

requirements for reporting as soon as 

technologically practicable and the need 

for complete and accurate data? 

48. All data in an SDR must be 

current and accurate, and the 

Commission expects SDRs, 

counterparties, and registered entities to 

take proactive steps to ensure data 

accuracy. Are there challenges that a 

reporting entity faces in confirming data 

accuracy? If so, how can those 

challenges most effectively be 

addressed? 

49. If an error or omission is 

discovered in the data reported to an 

SDR, what remedies and systems should 

be in place to correct the data? Within 

what time frame should a reporting 

entity be required to identify an error in 

previously reported data and submit 

corrected information to an SDR? 

ii. SDR Required Data Standards 

(§ 45.13) 

50. In addition to data harmonization, 

how can reporting entities and SDRs 

improve data quality and 

standardization across all data elements 

and asset classes within an SDR? Please 

provide examples of how the 

presentation of data may be 

standardized, utilizing specific data 

elements. 

51. How should SDRs leverage the 

results of data elements harmonization 

to help ensure regulatory reporting is 

more accurate and consistent? 

52. Are there additional existing 

swaps data standards (other than the 

legal entity identifier (‘‘LEI’’), unique 

product identifier (‘‘UPI’’) and USI) that 

the Commission should consider 

requiring as part of any effort to 

harmonize SDR data with both domestic 

and foreign regulators? 

iii. Identifiers (§§ 45.5, 45.6 and 45.7) 

53. Please explain your experiences 

and any challenges associated with 

obtaining and maintaining an LEI. 

a. What additional steps can market 

participants and SDRs take to help 

ensure counterparties have valid LEIs? 

54. What principles should the 

Commission consider when designating 


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16696 Federal Register / Vol. 79, No. 58 / Wednesday, March 26, 2014 / Proposed Rules 

44 17 CFR 1.3(ggg); see Further Definition of 

‘‘Swap Dealer,’’ ‘‘Security-Based Swap Dealer,’’ 

‘‘Major Swap Participant,’’ ‘‘Major Security-Based 

Swap Participant,’’ and ‘‘Eligible Contract 

Participant,’’ 77 FR 30596 (May 23, 2012). 

45 17 CFR 3.10; see Registration of Swap Dealers 

and Major Swap Participants, 77 FR 2613 (Jan. 19, 

2012). 

46 17 CFR 23.501; see Confirmation, Portfolio 

Reconciliation, Portfolio Compression, and Swap 

Trading Relationship Documentation Requirements 

for Swap Dealers and Major Swap Participants, 77 

FR 55903 at 55917 (Jan. 19, 2012) (‘‘Confirmation 

has been recognized as an important post-trade 

processing mechanism for reducing risk and 

improving operational efficiency by both market 

participants and their regulators. Prudent practice 

requires that, after coming to an agreement on the 

terms of a transaction, parties document the 

transaction in a complete and definitive written 

record so there is legal certainty about the terms of 

their agreement.’’). 

47 17 CFR 23.503; see 77 FR at 55932 (‘‘Portfolio 

compression is an important, post-trade processing 

and netting mechanism that can be an effective and 

efficient tool for the timely and accurate processing 

and netting of swaps by market participants.’’). 

48 17 CFR 23.506; see Customer Clearing 

Documentation, Timing of Acceptance for Clearing, 

and Clearing Member Risk Management, 77 FR 

21278 at 21281 (Apr. 9, 2012) (noting that the rule 

was adopted ‘‘in order to ensure compliance with 

any mandatory clearing requirement issued 

pursuant to section 2(h)(1) of the CEA and to 

promote the mitigation of counterparty credit risk 

through the use of central clearing’’). 49See 17 CFR 49.2; SDR Rules at 54576. 

a UPI and product classification system 

pursuant to § 45.7? 

a. Are there any commonly used 

taxonomies that the Commission should 

consider in connection with the 

designation process? Please respond by 

asset class. 

55. Please explain your experiences 

and any challenges associated with the 

creation, transmission and reporting of 

USIs. 

G. Swap Dealer/Major Swap Participant 

Registration and Compliance: How Can 

the Commission Enhance Part 45 to 

Facilitate Oversight of Swap Dealers 

and Major Swap Participants? 

One Commission interest in swap 

data reporting is to evaluate whether a 

market participant meets the definition 

of, and is required to register as, an SD 

or MSP.44 The Commission can use 

swap data reports to determine a market 

participant’s aggregate gross notional 

amount of swap transactions on a 

rolling 12-month basis, taking into 

account, among other things, the 

definitions of SD and MSP and the 

Commission’s registration 

requirements.45 Additionally, swap data 

reporting allows the Commission to 

assess a market participant’s compliance 

with the Commission’s regulations, 

including, but not limited to, part 23 

requirements for SDs and MSPs (e.g., 

swap confirmation,46 portfolio 

compression,47 and swap processing 

and clearing requirements 48). 

The Commission requests comment 

on what clarifications or enhancements, 

if any, should be made to the swap data 

reporting rules so that it may better 

monitor SDs and MSPs. The 

Commission also requests comment 

related to the specific questions below. 

56. Should the Commission require an 

SDR to aggregate the number of 

transactions by an entity, and the 

aggregate notional value of those 

transactions, to reflect the entity’s total 

swap position and its total swap activity 

during a given period (e.g., for purposes 

of monitoring the SD de minimis 

calculation)? 

57. Should data elements be reported 

to the SDR to reflect whether a swap is 

a dealing or non-dealing swap? If so, 

how should this information be 

reflected in the SDR? 

58. Where transactions are executed 

in non-U.S. dollar (‘‘USD’’) 

denominations, should the SDR data 

reflect USD conversion information for 

the notional values, as calculated by the 

counterparty at the time of the 

transaction (rather than the conversion 

taking place at the SDR)? 

a. If so, how should the SDR data 

reflect this information? 

b. Would this answer be different 

depending on the registration status of 

the reporting counterparty (e.g., SD/

MSP)? 

H. Risk: How Can Part 45 Better 

Facilitate Risk Monitoring and 

Surveillance? 

Swap data reported to SDRs facilitates 

a number of Commission risk 

monitoring and surveillance activities, 

including monitoring of both financial 

and market risks resulting from the 

accumulation of large positions in 

cleared and uncleared swaps. 

The Commission has supervisory 

programs for DCOs, futures commission 

merchants, SDs, MSPs, and other 

participants in the clearing system. 

These programs monitor market 

participants’ compliance with 

applicable provisions of the Act and 

Commission regulations, including parts 

1, 22, 23, 39, and 50. A primary concern 

of these programs is to monitor and 

mitigate potential risks that can arise 

from swaps activities. 

With respect to clearing, the 

Commission conducts periodic 

examinations of DCOs, and Commission 

risk surveillance staff monitors, on a 

daily basis, the risks posed to or by 

DCOs, clearing members, and market 

participants. This analysis includes 

reviewing position data at the trader, 

clearing member, and DCO levels. 

The Commission requests comment 

on what clarifications or enhancements, 

if any, should be made to the swap data 

reporting rules so that it may better 

monitor risk and conduct related 

surveillance. The Commission also 

requests comment on the specific 

questions below. 

59. Should the Commission require 

SDRs to calculate market participants’ 

positions in cleared and uncleared 

swaps? 

a. Given the definition of ‘‘position’’ 

in part 49 of the Commission’s 

regulations,49 and the transactional 

nature of swap data reporting, how 

should an SDR calculate the positions of 

market participants whose swaps are 

reported to it? 

i. Please explain whether these 

calculations should differ by underlying 

instrument, index or reference entity, 

counterparty, asset class, long risk of 

underlying instrument, index, or 

reference entity, or short risk of the 

underlying instrument, index or 

reference entity, or any other attribute. 

b. How should SDR positions or 

position calculation methods relate, if at 

all, to positions calculated by DCOs and 

DCOs’ position calculation methods? 

60. Are there data elements that 

should be reported on a transaction 

basis to identify the linkage between a 

swap transaction and a reporting 

counterparty’s other positions in 

products regulated by the Commission? 

61. How can swap data reporting be 

enhanced to facilitate the calculation of 

positions within SDRs? 

a. How should position information 

within an individual SDR be aggregated 

across multiple SDRs so that the 

Commission has a complete view of a 

market participant’s risk profile for 

swaps reportable under Dodd-Frank? 

b. How can the Commission 

efficiently aggregate information by 

product and by market participant in 

order to understand positions across 

cleared and uncleared markets? 

62. How can the Commission best 

aggregate data across multiple trade 

repositories (including registered 

SDRs)? 

63. What international regulatory 

coordination would be necessary to 

facilitate such data aggregation? 

I. Ownership of Swap Data and Transfer 

of Data Across SDRs 

Since the adoption of the swap data 

reporting and SDR rules, questions have 

emerged whether a particular party or 

parties have the legal authority to direct 

and/or use such swap data. 

Commission regulation 49.17(g) 

generally prohibits a registered SDR 

from using the data it maintains for 


emcdonald on DSK67QTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 58 / Wednesday, March 26, 2014 / Proposed Rules 16697 

50The statutory basis for the regulation is set forth 

in Sections 21(c)(6), 21(c)(7), and 21(f)(3) of the 

CEA adopted as part of Section 728 of the DoddFrank Act, 7 U.S.C. 24a(c)(6), 24a(c)(7), and 

24a(f)(3). 

51Core Data constitutes the two separate streams 

of data received by SDRs: ‘‘(i) Data related to realtime public reporting which by its nature is 

publicly available and (ii) data that is intended for 

use by the Commission and other regulators which 

is subject to statutory confidential treatment.’’ SDR 

Rules at 54550. 

52The Commission did provide that SDR data 

could be transferred or moved to another SDR in 

the case of an SDR ceasing to operate as an SDR 

registered the Commission. See 17 CFR 49.4. 

commercial or business purposes. As 

part of this prohibition, Commission 

regulation 49.17(g) requires registered 

SDRs to adopt and implement adequate 

‘‘firewalls’’ to protect the swaps data 

from any improper commercial use. 

Commission regulation 49.17(g)(2) 

provides a limited exception if the 

submitters of the data provide express 

written consent to the SDR.50

Because of the inherent conflicts in 

connection with maintaining swap data 

and SDR operations (e.g., the incentive 

to develop ancillary services using swap 

data), the Commission in part 49 

required that ‘‘commercial use’’ of any 

data submitted to and maintained by an 

SDR be restricted. Accordingly, 

Commission regulation 49.27 requires 

registered SDRs to provide fair, open 

and equal access to their services and 

provides that registered SDRs must not 

discriminate against submitters of data 

regardless of whether such a submitter 

has agreed to any ‘‘commercial use’’ of 

its data. 

The basis for prohibiting SDRs from 

commercializing Core Data 51 without 

the consent of the counterparties is 

based on (i) the duty of the SDR set forth 

in Section 21(c)(6) of the CEA to keep 

swap information private and 

confidential, and (ii) the inherent 

conflict of interest for an SDR to use 

Core Data for commercial purposes. 

Core Principle 3 set forth in Section 

21(f)(3) of the CEA requires SDRs to 

‘‘establish and enforce rules to minimize 

conflicts of interest in the decisionmaking process of the swap data 

repository.’’ Commission regulation 

49.17(g) permits an SDR to disclose, 

consistent with Section 8 of the CEA, 

aggregated data information if such 

disclosure is not for a commercial 

purpose. In sum, part 49 provides an 

SDR with an implied license to use Core 

Data for regulatory purposes, and absent 

the consent of the counterparties, an 

SDR would be prohibited from 

commercially benefiting from the use of 

such Core Data. The Commission is 

requesting industry and public input on 

whether the current Commission 

regulations regarding 

‘‘commercialization’’ of data are 

consistent with legal property interests 

and industry practices. 

Additionally, the Commission 

requests comment related to the specific 

questions below. 

64. The Commission seeks input from 

market participants regarding the 

ownership of the transactional data 

resulting from a swap transaction. Is the 

swap transaction data from a particular 

swap transaction owned by the 

counterparties to the transaction? 

a. If cleared, should a DCO have 

preferential ownership or intellectual 

property rights to the data? 

b. Should ownership or intellectual 

property rights change based on 

whether the particular swap transaction 

is executed on a SEF or DCM? 

c. What would be the basis for 

property rights in the data for each of 

these scenarios? 

d. What ownership interests, if any, 

are held by third-party service 

providers? 

e. What are the ownership interests of 

non-users/non-participants of an SDR 

whose information is reported to the 

SDR by a reporting counterparty or 

other reporting entity? 

65. Is commercialization of swap 

transaction data consistent with the 

regulatory objective of transparency? 

a. In what circumstances should an 

SDR be permitted to commercialize the 

data required to be reported to it? 

b. Does commercialization of swap 

data increase potential data 

fragmentation? 

c. Is commercialization of swap data 

reported to an SDR, DCM or SEF 

necessary for any such entity to be 

economically viable? If so, what 

restraints or controls should be imposed 

on such commercialization? 

66. Does the regulatory reporting of a 

swap transaction to an SDR implicitly or 

explicitly provide ‘‘consent’’ to further 

distribution or use of swap transaction 

data for commercial purpose by the 

SDR? 

67. Even though swap data reported to 

an SDR must be available for public 

real-time reporting, should any use of 

such real-time data or 

commercialization of such data occur 

only with the specific consent of the 

counterparties to the swap? 

68. An ancillary issue relating to 

commercialization of data and legal 

property rights relates to the 

‘‘portability’’ of SDR data. This issue 

relates to the operation of Commission 

regulation 45.10 (Reporting to a single 

SDR), which requires that all swap data 

for a given swap must be reported to a 

single SDR, specifically, the SDR to 

which creation data is first reported. 

The Commission did not, however, 

directly address whether the data in one 

SDR may be moved, transferred or 

‘‘ported’’ to another SDR.52 The 

Commission seeks comment on whether 

§ 45.10 should be re-evaluated and 

whether a viable alternative exists. 

Should portability of data be permitted? 

If so, should there be agreement by the 

counterparties to a swap prior to the 

data being ported? 

J. Additional Comment 

69. To the extent not addressed by 

any of the questions above, please 

identify any challenges regarding: (i) 

The accurate reporting of swap 

transaction data; (ii) efficient access to 

swap transaction data; and (iii) effective 

analysis of swap transaction data. Please 

address each issue and challenge as it 

pertains to reporting entities, SDRs, and 

others. Please also discuss how such 

challenges can be resolved. 

a. What challenges do Commission 

registrants (SDs, MSPs, SEFs, DCMs, 

and DCOs) face as reporting entities and 

reporting counterparties under the swap 

data reporting rules? What 

enhancements or clarifications to the 

Commission’s rules, if any, would help 

address these challenges? 

b. What challenges do financial 

entities face as reporting counterparties 

and non-reporting counterparties under 

the swap data reporting rules? What 

enhancements or clarifications to the 

Commission’s rules, if any, would help 

address these challenges? 

c. What challenges do non-financial 

entities, including natural persons, face 

as reporting counterparties and nonreporting counterparties under the swap 

data reporting rules? What 

enhancements or clarifications to the 

Commission’s rules, if any, would help 

address these challenges? 

Issued in Washington, DC, on March 19, 

2014, by the Commission. 

Christopher J. Kirkpatrick, 

Deputy Secretary of the Commission. 

Appendices to Request for Comment on 

Part 45 and Related Provisions of the 

Commission’s Swap Data Reporting 

Rules 

Appendix 1—Commission Voting Summary 

On this matter, Acting Chairman Wetjen 

and Commissioners Chilton and O’Malia 

voted in the affirmative. No Commissioner 

voted in the negative. 

Appendix 2—Statement of Commissioner 

Scott D. O’Malia 

I support the request for comment on part 

45 and related provisions of the 


emcdonald on DSK67QTVN1PROD with PROPOSALS
16698 Federal Register / Vol. 79, No. 58 / Wednesday, March 26, 2014 / Proposed Rules 

Commission’s swap data reporting rules. I 

commend the cross-divisional data team’s 

effort to fix our reporting rules and enhance 

the Commission’s ability to use its data. I 

hope that the data team and the Commission 

will carefully evaluate market participants’ 

comments and recommendations and 

develop workable solutions to improve our 

data reporting regime. 

At the same time, I urge market 

participants to carefully review the 

Commission’s questions, submit their 

comments, and alert the Commission to other 

data reporting issues that have not been 

included in this request for comment. This 

comment period is a critical step in the 

Commission’s effort to improve its data 

utilization. I encourage all market 

participants to help the Commission improve 

its data reporting regime. 

[FR Doc. 2014–06426 Filed 3–25–14; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 573 

[Docket No. FDA–2014–F–0296] 

DSM Nutritional Products; Filing of 

Food Additive Petition (Animal Use) 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Notice of petition. 

SUMMARY: The Food and Drug 

Administration (FDA) is announcing 

that DSM Nutritional Products has filed 

a petition proposing that the food 

additive regulations be amended to 

provide for the safe use of 25- 

hydroxyvitamin D3 in feed for turkeys. 

DATES: Submit either electronic or 

written comments on the petitioner’s 

request for categorical exclusion from 

preparing an environmental assessment 

or environmental impact statement by 

April 25, 2014. 

ADDRESSES: Submit electronic 

comments to: http://

www.regulations.gov. Submit written 

comments to the Division of Dockets 

Management (HFA–305), Food and Drug 

Administration, 5630 Fishers Lane, Rm. 

1061, Rockville, MD 20852. 

FOR FURTHER INFORMATION CONTACT: 

Isabel W. Pocurull, Center for Veterinary 

Medicine, Food and Drug 

Administration, 7519 Standish Pl., 

Rockville, MD 20855, 240-453-6853. 

SUPPLEMENTARY INFORMATION: Under the 

Federal Food, Drug, and Cosmetic Act 

(section 409(b)(5) (21 U.S.C. 348(b)(5)), 

notice is given that a food additive 

petition (FAP 2279) has been filed by 

DSM Nutritional Products, 45 

Waterview Blvd., Parsippany, NJ 07054. 

The petition proposes to amend Title 21 

of the Code of Federal Regulations (CFR) 

in part 573 Food Additives Permitted in 

Feed and Drinking Water of Animals (21 

CFR part 573) to provide for the safe use 

of 25-hydroxyvitamin D3 in feed for 

turkeys. 

The petitioner has requested a 

categorical exclusion from preparing an 

environmental assessment or 

environmental impact statement under 

21 CFR 25.32(r). Interested persons may 

submit either electronic or a single copy 

of written comments regarding this 

request for categorical exclusion to the 

Division of Dockets Management (see 

DATES and ADDRESSES). Identify 

comments with the docket number 

found in brackets in the heading of this 

document. Received comments may be 

seen in the Division of Dockets 

Management between 9 a.m. and 4 p.m., 

Monday through Friday. 

Dated: March 21, 2014. 

Bernadette Dunham, 

Director, Center for Veterinary Medicine. 

[FR Doc. 2014–06623 Filed 3–25–14; 8:45 am] 

BILLING CODE 4160–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Chapter I 

[Docket No. FDA–2013–N–0590] 

RIN 0910–AG97 

Implementation of the Food and Drug 

Administration Food Safety 

Modernization Act Amendments to the 

Reportable Food Registry Provisions 

of the Federal Food, Drug, and 

Cosmetic Act 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Advance notice of proposed 

rulemaking. 

SUMMARY: The Food and Drug 

Administration (FDA) is issuing this 

advance notice of proposed rulemaking 

(ANPRM) to solicit comments, data, and 

information to assist the Agency in 

implementing the FDA Food Safety 

Modernization Act (FSMA), which 

added new provisions to the Reportable 

Food Registry (RFR) requirements of the 

Federal Food, Drug, and Cosmetic Act 

(the FD&C Act). Under the new 

provisions, FDA may require a 

responsible party to also submit to FDA 

‘‘consumer-oriented’’ information 

regarding certain reportable foods, 

including information necessary to 

enable a consumer to accurately identify 

whether the consumer is in possession 

of a reportable food. FDA must prepare 

and publish on FDA’s Internet Web site 

a one-page summary of the consumeroriented information that can be easily 

printed by a grocery store for the 

purposes of consumer notification. A 

grocery store that sold a reportable food 

that is the subject of an FDA one-page 

summary, and that is part of a chain of 

establishments with 15 or more physical 

locations, is required to prominently 

display the FDA one-page summary, or 

the information from the summary, 

within 24 hours after the one-page 

summary is published on FDA’s Web 

site, through a method identified by 

FDA. FDA is seeking input on topics 

including consumer-oriented 

information submissions, consumer 

notifications, posting consumer 

notifications in grocery stores, and 

grocery stores subject to the new 

requirements. 

DATES: Submit either electronic or 

written comments by June 9, 2014. 

ADDRESSES: You may submit comments, 

identified by Docket No. FDA–2013–N– 

0590 or Regulatory Information Number 

(RIN) number 0910–AG97, by any of the 

following methods: 

Electronic Submissions 

Submit electronic comments in the 

following way: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Written Submissions 

Submit written submissions in the 

following ways: 

• Mail/Hand delivery/Courier (for 

paper submissions): Division of Dockets 

Management (HFA–305), Food and Drug 

Administration, 5630 Fishers Lane, Rm. 

1061, Rockville, MD 20852. 

Instructions: All submissions received 

must include the Agency name and 

Docket No. FDA–2013–N–0590 and RIN 

0910–AG97 for this advance notice of 

proposed rulemaking. All comments 

received may be posted without change 

to http://www.regulations.gov, including 

any personal information provided. For 

additional information on submitting 

comments, see the ‘‘Comments’’ heading 

of the SUPPLEMENTARY INFORMATION

section of this document. 

Docket: For access to the docket to 

read background documents or 

comments received, go to http://

www.regulations.gov and insert the 

docket number(s), found in brackets in 

the heading of this document, into the 

‘‘Search’’ box and follow the prompts 

and/or go to the Division of Dockets 


emcdonald on DSK67QTVN1PROD with PROPOSALS