14740 Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Part 242 

[Release No. 34–74245; File No. S7–03–15] 

RIN 3235–AL71 

Regulation SBSR—Reporting and 

Dissemination of Security-Based Swap 

Information 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Proposed rule; guidance. 

SUMMARY: The Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

is proposing certain new rules and rule 

amendments to Regulation SBSR— 

Reporting and Dissemination of 

Security-Based Swap Information 

(‘‘Regulation SBSR’’). Specifically, 

proposed Rule 901(a)(1) of Regulation 

SBSR would require a platform (i.e., a 

national securities exchange or securitybased swap execution facility (‘‘SB 

SEF’’) that is registered with the 

Commission or exempt from 

registration) to report to a registered 

security-based swap data repository 

(‘‘registered SDR’’) a security-based 

swap executed on such platform that 

will be submitted to clearing. Proposed 

Rule 901(a)(2)(i) of Regulation SBSR 

would require a registered clearing 

agency to report to a registered SDR any 

security-based swap to which it is a 

counterparty. The Commission also is 

proposing certain conforming changes 

to other provisions of Regulation SBSR 

in light the proposed amendments to 

Rule 901(a), and a new rule that would 

prohibit registered SDRs from charging 

fees for or imposing usage restrictions 

on the users of the security-based swap 

transaction data that they are required to 

publicly disseminate. In addition, the 

Commission is explaining the 

application of Regulation SBSR to prime 

brokerage transactions and proposing 

guidance for the reporting and public 

dissemination of allocations of cleared 

security-based swaps. Finally, the 

Commission is proposing a new 

compliance schedule for the portions of 

Regulation SBSR for which the 

Commission has not specified a 

compliance date. 

DATES: Comments should be received on 

or before May 4, 2015. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/proposed.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number S7– 

03–15 on the subject line; or 

• Use the Federal eRulemaking Portal 

(http://www.regulations.gov). Follow the 

instructions for submitting comments. 

Paper Comments 

• Send paper comments to Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number S7–03–15. This file number 

should be included on the subject line 

if email is used. To help us process and 

review your comments more efficiently, 

please use only one method. The 

Commission will post all comments on 

the Commission’s Internet Web site 

(http://www.sec.gov/rules/

proposed.shtml). Comments are also 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. 

Studies, memoranda, or other 

substantive items may be added by the 

Commission or staff to the comment file 

during this rulemaking. A notification of 

the inclusion in the comment file of any 

such materials will be made available 

on the SEC’s Web site. To ensure direct 

electronic receipt of such notifications, 

sign up through the ‘‘Stay Connected’’ 

option at www.sec.gov to receive 

notifications by email. 

FOR FURTHER INFORMATION CONTACT: 

Michael Gaw, Assistant Director, at 

(202) 551–5602; Yvonne Fraticelli, 

Special Counsel, at (202) 551–5654; 

George Gilbert, Special Counsel, at (202) 

551–5677; David Michehl, Special 

Counsel, at (202) 551–5627; Geoffrey 

Pemble, Special Counsel, at (202) 551– 

5628; all of the Division of Trading and 

Markets, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–7010. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Introduction 

II. Reporting by Registered Clearing Agencies 

and Platforms—Proposed Amendments 

to Rule 901(a) and Conforming Changes 

A. Clearing Process for Security-Based 

Swaps 

B. Summary of the Proposed Amendments 

to Rule 901(a) and Conforming Changes 

1. Proposed Rule 901(a)(1)—Reporting by 

Platforms 

2. Proposed Reporting Obligations of 

Registered Clearing Agencies 

C. Discussion of Comments and Further 

Explanation of the Proposal 

1. Reporting Clearing Transactions 

a. Requirements for Reporting of Clearing 

Transactions to a Registered SDR 

b. Determining the Reporting Side for 

Clearing Transactions 

c. Choice of Registered SDR for Clearing 

Transactions 

d. Reporting Whether an Alpha 

Transaction is Accepted for Clearing 

2. Reporting by a Platform 

3. Additional Amendments to Account for 

Platforms and Registered Clearing 

Agencies Incurring Duties to Report 

4. Examples 

D. Request for Comment 

III. Reporting and Public Dissemination of 

Security-Based Swaps Involving 

Allocation 

A. Examples 

1. Off-Platform Cleared Transaction 

a. Reporting the Bunched Order Alpha 

b. Reporting the Security-Based Swaps 

Resulting From Allocation 

2. Cleared Platform Transaction 

a. Reporting the Bunched Order Alpha 

b. Reporting the Security-Based Swaps 

Resulting From Allocation 

B. Request for Comment 

IV. Reporting and Public Dissemination of 

Prime Brokerage Transactions 

A. Application of Regulation SBSR as 

Adopted to Prime Brokerage 

Transactions 

1. Regulatory Reporting Duties 

2. Public Dissemination of Prime Brokerage 

Transactions 

B. Example of the Application of the 

Adopted Rules 

C. Request for Comment 

V. Additional Proposed Amendments 

A. Amendments to Rule 905(a) 

B. Amendments to Rules 906(b) and 

907(a)(6) 

C. Extending the Applicability of Rule 

906(c) 

D. Rule 908(b)—Limitations on 

Counterparty Reporting Obligations 

E. Request for Comment 

VI. Proposed Rule Prohibiting a Registered 

SDR from Charging Fees for or Imposing 

Usage Restrictions on Publicly 

Disseminated Data 

A. Background 

B. Request for Comment 

VII. Proposed Compliance Schedule for 

Regulation SBSR 

A. Initial Proposal 

1. Rule 910 

2. Rule 911 

B. New Proposed Compliance Schedule for 

Regulation SBSR 

1. Proposed Compliance Date 1 

2. Proposed Compliance Date 2 

3. Effect of Registration of Additional SDRs 

4. Proposed Changes to Certain Exemptions 

Related to the Proposed Compliance 

Schedule 

C. Discussion of Comments Received in 

Response to the Initial Proposal 

D. Request for Comment 


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Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 14741 

1 15 U.S.C. 78m–1(a)(1). All references in this 

release to the Exchange Act refer to the Securities 

Exchange Act of 1934. 

2 15 U.S.C. 78m(m)(1)(G). 

3 15 U.S.C. 78m(m)(1)(C). 

4Section 13(m)(1)(E) of the Exchange Act, 15 

U.S.C. 78m(m)(1)(E), provides that, with respect to 

cleared security-based swaps, the rule promulgated 

by the Commission related to public dissemination 

shall contain provisions, among others, that 

‘‘specify the criteria for determining what 

constitutes a large notional security-based swap 

transaction (block trade) for particular markets and 

contracts’’ and ‘‘specify the appropriate time delay 

for reporting large notional security-based swap 

transactions (block trades) to the public.’’ 

5Securities Exchange Act Release No. 74244 

(February 11, 2015) (no Federal Register 

publication yet) (‘‘Regulation SBSR Adopting 

Release’’). 

6See Securities Exchange Act Release No. 63346 

(November 19, 2010), 75 FR 75207 (December 2, 

2010) (‘‘Regulation SBSR Proposing Release’’). 

7See Securities Exchange Act Release No. 69490 

(May 1, 2013), 78 FR 30967 (May 23, 2013) (‘‘CrossBorder Proposing Release’’). 

8With these proposed rules, rule amendments, 

and guidance, the Commission is not re-opening 

comment on the rules adopted in Regulation SBSR 

Adopting Release. The Commission received 86 

comments that were specifically directed to the 

comment file (File No. S7–34–10) for the Regulation 

SBSR Proposing Release, of which 38 were 

comments submitted in response to the re-opening 

of the comment period. Of the comments directed 

to the comment file (File No. S7–02–13) for the 

Cross-Border Proposing Release, six referenced 

Regulation SBSR specifically, while many others 

addressed cross-border issues generally, without 

specifically referring to Regulation SBSR. As 

discussed in the Regulation SBSR Adopting 

Release, the Commission also has considered other 

comments that are relevant to regulatory reporting 

and/or public dissemination of security-based 

swaps that were submitted in other contexts. The 

comments discussed in this release are listed in the 

Appendix. For ease of reference, this release 

Continued 

VIII. Economic Analysis 

A. Broad Economic Considerations 

1. Security-Based Swap Market 

Infrastructure 

2. Competition Among Security-Based 

swap Service Providers 

B. Baseline 

1. Current Security-Based Swap Market 

2. Clearing Activity in Single-Name Credit 

Default Swaps 

3. Execution Methods in the SecurityBased Swap Market 

4. Current Market Structure for SecurityBased Swap Infrastructure 

a. Exchanges and SB SEFs 

b. Clearing Agencies 

c. SDRs 

d. Vertical Integration of Security-Based 

Swap Market Infrastructure 

C. Programmatic Cost of Proposed 

Amendments to Regulation SBSR 

1. Proposed Amendments to Rule 901 

a. For Platforms and Registered Clearing 

Agencies—Rule 901(a)(1) and Rule 

901(a)(2)(i) 

b. For Platforms and Reporting Sides of 

Alphas—Rule 901(a)(3) 

c. Total Cost of Rule 901 Compliance for 

Platforms, Registered Clearing Agencies, 

and Reporting Sides 

2. Proposed Amendment to Rule 905(a) 

3. Proposed Amendments to Rule 906(c) 

D. Economic Effects and Effects on 

Efficiency, Competition, and Capital 

Formation 

1. Reporting of Clearing Transactions 

2. Reporting of Clearing Transactions 

Involving Allocation 

3. Alternative Approaches to Reporting 

Clearing Transactions 

a. Maintain Reporting Hierarchy as 

Adopted in Regulation SBSR 

b. Move Registered Clearing Agencies 

Within the Regulation SBSR Reporting 

Hierarchy 

c. Require the Reporting Side for an Alpha 

to also Report Beta and Gamma 

Transactions 

4. Reporting by Platforms 

5. Alternative Approaches to Reporting 

Platform-Executed Transactions 

6. Application of Regulation SBSR to Prime 

Brokerage Transactions 

7. Proposed Prohibition on Fees for Public 

Dissemination 

8. Proposed Compliance Schedule for 

Regulation SBSR 

IX. Paperwork Reduction Act 

A. Definitions—Rule 900 

B. Reporting Obligations—Rule 901 

1. Rule 901—As Adopted 

2. Rule 901—Proposed Amendments 

a. Summary of Collection of Information 

b. Proposed Use of Information 

c. Respondents 

d. Total Initial and Annual Reporting and 

Recordkeeping Burdens 

i. Platforms and Registered Clearing 

Agencies 

ii. Platforms and Reporting Sides 

iii. Bunched Orders and Allocations 

iv. Prime Brokerage Transactions 

e. Recordkeeping Requirements 

f. Collection of Information is Mandatory 

g. Confidentiality of Responses to 

Collection of Information 

3. Rule 901—Aggregate Total PRA Burdens 

and Costs 

a. For Platforms 

b. For Registered Clearing Agencies 

c. For Reporting Sides 

d. For Registered SDRs 

C. Correction of Errors in Security-Based 

Swap Information—Rule 905 

1. Rule 905—As Adopted 

2. Rule 905—Proposed Amendments 

a. Summary of Collection of Information 

b. Proposed Use of Information 

c. Respondents 

d. Total Initial and Annual Reporting and 

Recordkeeping Burdens 

e. Recordkeeping Requirements 

f. Collection of Information is Mandatory 

g. Confidentiality of Responses to 

Collection of Information 

3. Rule 905—Aggregate Total PRA Burdens 

and Costs 

a. For Platforms 

b. For Non-Reporting Sides 

c. For Registered SDRs 

D. Other Duties of Participants—Rule 906 

1. Rule 906—As Adopted 

2. Rule 906—Proposed Amendments 

a. Rule 906(b) —Proposed Amendments 

b. Rule 906(c)—Proposed Amendments 

i. Summary of Collection of Information 

ii. Proposed Use of Information 

iii. Respondents 

iv. Total Initial and Annual Reporting and 

Recordkeeping Burdens 

v. Recordkeeping Requirements 

vi. Collection of Information is Mandatory 

vii. Confidentiality of Responses to 

Collection of Information 

3. Rule 906—Aggregate Total PRA Burdens 

and Costs 

a. For Platforms and Registered Clearing 

Agencies 

b. For Registered SDRs 

c. For Participants 

E. Policies and Procedures of Registered 

SDRs—Rule 907 

1. Rule 907—As Adopted 

2. Rule 907—Proposed Amendments 

3. Rule 907—Aggregate Total PRA Burdens 

and Costs 

F. Cross-Border Matters—Rule 908 

1. Rule 908—As Adopted 

2. Rule 908—Proposed Amendments 

3. Rule 908—Aggregate Total PRA Burdens 

and Costs 

G. Request for Comments 

X. Consideration of Impact on the Economy 

XI. Regulatory Flexibility Act Certification 

XII. Statutory Basis and Text of Proposed 

Rules 

I. Introduction 

Section 13A(a)(1) of the Exchange 

Act 1 provides that each security-based 

swap that is not accepted for clearing by 

any clearing agency or derivatives 

clearing organization shall be subject to 

regulatory reporting. Section 

13(m)(1)(G) of the Exchange Act 2

provides that each security-based swap 

(whether cleared or uncleared) shall be 

reported to a registered SDR, and 

Section 13(m)(1)(C) of the Exchange 

Act 3 generally provides that 

transaction, volume, and pricing data of 

security-based swaps shall be publically 

disseminated in real time, except in the 

case of block trades.4

In a separate release, the Commission 

is adopting Regulation SBSR,5 which 

contains several rules relating to 

regulatory reporting and public 

dissemination of security-based swap 

transactions. The Commission initially 

proposed Regulation SBSR in November 

2010.6 In May 2013, the Commission reproposed the entirety of Regulation 

SBSR as part of the Cross-Border 

Proposing Release, which proposed 

rules and interpretations regarding the 

application of Title VII of the DoddFrank Act to cross-border security-based 

swap activities.7 In this release, the 

Commission is proposing certain new 

rules of Regulation SBSR as well as 

amendments to, and guidance regarding 

Regulation SBSR, as adopted. The 

Commission also is proposing a 

compliance schedule for Regulation 

SBSR. The Commission seeks comment 

on all of the rules, rule amendments, 

and guidance proposed in this release.8


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14742 Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 

identifies commenters using the same naming 

convention as the Regulation SBSR Adopting 

Release, although it does not discuss all of the 

comment letters included in the Regulation SBSR 

Adopting Release. For example, this release refers 

to a letter identified as ‘‘ISDA IV,’’ but does not 

discuss ISDA I, ISDA II, or ISDA III because those 

letters are not relevant to the current release. 

9 15 U.S.C. 78m(m)(1)(F). 

10 15 U.S.C. 78m(m)(1)(G). 

11 15 U.S.C. 78m–1(a)(3). 

12Rule 900(g), as adopted, defines ‘‘clearing 

transaction’’ as ‘‘a security-based swap that has a 

registered clearing agency as a direct counterparty.’’ 

This definition describes security-based swaps that 

arise when a registered clearing agency accepts a 

security-based swap for clearing as well as securitybased swaps that arise as part of a clearing agency’s 

internal processes, such as security-based swaps 

used to establish prices for cleared products and 

security-based swaps that result from netting other 

clearing transactions of the same product in the 

same account into an open position. See Regulation 

SBSR Adopting Release, Section V(B)(2). 

13See 75 FR 75211. 

14See id. 

15See id. at 75212. 

16See id. 

17 If both direct counterparties to the alpha are 

clearing members, the direct counterparties would 

submit the transaction to the clearing agency 

directly and the resulting beta would be between 

the clearing agency and one clearing member, and 

the gamma would be between the clearing agency 

and the other clearing member. The Commission 

understands, however, that, if the direct 

counterparties to the alpha are a clearing member 

and a non-clearing member (a ‘‘customer’’), the 

customer’s side of the trade would be submitted for 

clearing by a clearing member acting on behalf of 

the customer. When the clearing agency accepts the 

alpha for clearing, one of the resulting swaps—in 

this case, assume the beta—would be between the 

clearing agency and the customer, with the 

customer’s clearing member acting as guarantor for 

the customer’s trade. The other resulting swap—the 

gamma—would be between the clearing agency and 

the clearing member that was a direct counterparty 

to the alpha. See, e.g., Byungkwon Lim and Aaron 

J. Levy, ‘‘Contractual Framework for Cleared 

Derivatives: The Master Netting Agreement 

Between a Clearing Customer Bank and a Central 

Counterparty,’’ 10 Pratt’s J. of Bankr. Law 509, 515– 

517 (LexisNexis A.S. Pratt) (describing the clearing 

model for swaps in the United States). 

18 In the principal model of clearing, which the 

Commission understands is used in certain foreign 

swap markets, a customer is not a direct 

counterparty of the clearing agency. Under this 

model, a clearing member would clear a swap for 

a customer by entering into a back-to-back swap 

with the clearing agency: The clearing member 

would become a direct counterparty to a swap with 

the customer, and then would become a 

counterparty to an offsetting swap with the clearing 

agency. In this circumstance, unlike in the agency 

model of clearing, the swap between the direct 

counterparties might not terminate upon acceptance 

for clearing. The Commission notes that one 

II. Reporting by Registered Clearing 

Agencies and Platforms—Proposed 

Amendments to Rule 901(a) and 

Conforming Changes 

Section 13(m)(1)(F) of the Exchange 

Act 9 provides that parties to a securitybased swap (including agents of parties 

to a security-based swap) shall be 

responsible for reporting security-based 

swap transaction information to the 

appropriate registered entity in a timely 

manner as may be prescribed by the 

Commission. Section 13(m)(1)(G) of the 

Exchange Act 10 provides that each 

security-based swap (whether cleared or 

uncleared) shall be reported to a 

registered SDR. Section 13A(a)(3) of the 

Exchange Act 11 specifies the party 

obligated to report a security-based 

swap that is not accepted for clearing by 

any clearing agency or derivatives 

clearing organization. Consistent with 

these statutory provisions, Rule 901(a) 

of Regulation SBSR, as adopted, assigns 

the duty to report ‘‘covered 

transactions,’’ which include all 

security-based swaps except: (1) 

Clearing transactions; 12 (2) securitybased swaps that are executed on a 

platform and that will be submitted to 

clearing; (3) transactions where there is 

no U.S. person, registered securitybased swap dealer, or registered major 

security-based swap participant on 

either side; and (4) transactions where 

there is no registered security-based 

swap dealer or registered major securitybased swap participant on either side 

and there is a U.S. person on only one 

side. This release proposes to assign the 

duty to report security-based swaps in 

categories (1) and (2) above. The 

Commission anticipates seeking 

additional public comment in the future 

on the reporting obligations for securitybased swaps in categories (3) and (4) 

above. 

Rule 901(a), as proposed and reproposed, would have used a hierarchy 

to assign reporting obligations for all 

security-based swaps—including those 

in the four non-covered categories noted 

above—without regard to whether a 

particular security-based swap was 

cleared or uncleared. In the Regulation 

SBSR Proposing Release, the 

Commission expressed a preliminary 

view that cleared and uncleared 

security-based swaps should be subject 

to the same reporting hierarchy.13 In 

addition, Rule 901(a), as proposed and 

as re-proposed, did not differentiate 

between security-based swaps that are 

executed on a platform and other 

security-based swaps. The Commission 

preliminarily believed that securitybased swap dealers and major securitybased swap participants generally 

should be responsible for reporting 

security-based swap transactions of all 

types, because they would be more 

likely than other persons to have 

appropriate systems in place to facilitate 

reporting.14

The Commission requested comment 

on a range of issues related to Rule 

901(a), as proposed and as re-proposed. 

In particular, the Commission sought 

comment on whether platforms or 

clearing agencies should be required to 

report security-based swaps.15 The 

Commission also asked whether 

counterparties to a security-based swap 

executed anonymously on a platform 

and subsequently cleared would have 

the information necessary to know 

which counterparty would incur the 

reporting obligation under Rule 

901(a).16 The comments that the 

Commission received in response are 

discussed below. 

In light of comments received and 

upon additional consideration of the 

issues, the Commission is proposing 

two amendments to Rule 901(a) of 

Regulation SBSR. First, the Commission 

is proposing a new subparagraph (1) of 

Rule 901(a), which would provide that, 

if a security-based swap is executed on 

a platform and will be submitted to 

clearing, the platform on which the 

transaction was executed shall have the 

duty to report the transaction to a 

registered SDR. Second, the 

Commission is proposing a new 

subparagraph (2)(i) of Rule 901(a), 

which would assign the reporting duty 

for a clearing transaction to the 

registered clearing agency that is a 

counterparty to the security-based swap. 

In connection with these proposed 

rules, the Commission also is proposing 

several conforming rule amendments to 

Regulation SBSR. The Commission 

describes each of these proposed rules 

and rule amendments in more detail 

below, following a description of the 

process for central clearing of securitybased swap transactions. 

A. Clearing Process for Security-Based 

Swaps 

As discussed in Section V of the 

Regulation SBSR Adopting Release, two 

models of clearing—an agency model 

and a principal model—are currently 

used in the swap markets. In the agency 

model, which predominates in the U.S. 

swap market, a swap that is accepted for 

clearing—often referred to in the 

industry as an ‘‘alpha’’—is terminated 

and replaced with two new swaps, 

known as ‘‘beta’’ and ‘‘gamma.’’ The 

Commission understands that, under 

the agency model, one of the direct 

counterparties to the alpha becomes a 

direct counterparty to the beta, and the 

other direct counterparty to the alpha 

becomes a direct counterparty to the 

gamma. The clearing agency would be a 

direct counterparty to each of the beta 

and the gamma.17 This release uses the 

terms ‘‘alpha,’’ ‘‘beta,’’ and ‘‘gamma’’ in 

the same way that they are used in the 

agency model of clearing in the U.S. 

swap market.18 The Commission notes 


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commenter recommended that Regulation SBSR 

should clarify the applicable reporting requirements 

under each of the agency and principal clearing 

models. See ISDA IV at 6. Although this release 

focuses on the agency model of clearing, which 

predominates in the United States, the Commission 

is requesting comment regarding the application of 

the principal model. 

19This release does not address the application of 

Section 5 of the Securities Act of 1933, 15 U.S.C. 

77a et seq. (‘‘Securities Act’’), to security-based 

swap transactions that are intended to be submitted 

to clearing (e.g., alphas, in the agency model of 

clearing). Rule 239 under the Securities Act, 17 CFR 

230.239, provides an exemption for certain securitybased swap transactions involving an eligible 

clearing agency from all provisions of the Securities 

Act, other than the Section 17(a) anti-fraud 

provisions. This exemption does not apply to 

security-based swap transactions not involving an 

eligible clearing agency, including a transaction that 

is intended to be submitted to clearing, regardless 

of whether the security-based swaps subsequently 

are cleared by an eligible clearing agency. See 

Exemptions for Security-Based Swaps Issued By 

Certain Clearing Agencies, Securities Act Release 

No. 33–9308 (March 30, 2012), 77 FR 20536 (April 

5, 2012). 

20 If the execution occurs otherwise than on a 

platform, or if the security-based swap is executed 

on a platform but will not be submitted to clearing, 

the reporting hierarchy in Rule 901(a)(2)(ii), as 

adopted, will apply to the transaction. 

21This is consistent with the Commission’s 

guidance in Section V(B) of the Regulation SBSR 

Adopting Release that, for transactions subject to 

Rule 901(a)(2)(ii), the reporting side may choose the 

registered SDR to which it makes the report 

required by Rule 901: ‘‘The reporting side may 

select the registered SDR to which it makes the 

required report. However, with respect to any 

particular transaction, all information required to be 

reported by Rule 901(a)(2)(ii), as adopted, must be 

reported to the same registered SDR.’’ 

22 If the alpha security-based swap is not required 

to be reported to a registered SDR—which could 

occur if Rule 901(a) does not assign a reporting 

obligation for the transaction or if the person 

assigned under Rule 901(a) is not enumerated in 

Rule 908(b)—the registered clearing agency would 

have no duty to report whether or not it has 

accepted the alpha for clearing. 

23See 75 FR 75212. 

24See DTCC VI at 8–9; MarkitSERV III at 3–5. 

25See CME/ICE Letter at 2–4; ICE Letter at 2–5; 

CME II at 4; ISDA IV at 5–6. 

26See CME II at 5 (stating that ‘‘a choice by the 

Commission to require that data on cleared SBS be 

reported to a third-party SDR would impose 

substantial costs on market participants which 

greatly outweigh the benefits (if any). . . . The 

Commission already has access to this data via the 

clearing agency.’’) 

27See ICE Letter at 2; CME/ICE Letter at 2. 

that, under Regulation SBSR, an alpha 

is not a ‘‘clearing transaction,’’ even 

though it is submitted for clearing, 

because it does not have a registered 

clearing agency as a direct 

counterparty.19

B. Summary of the Proposed 

Amendments to Rule 901(a) and 

Conforming Changes 

In a separate release, the Commission 

is adopting Regulation SBSR under the 

Exchange Act. In light of comments 

received in response to both the 

Regulation SBSR Proposing Release and 

the Cross-Border Proposing Release 

(which re-proposed Regulation SBSR in 

its entirety), the Commission in this 

release is proposing to amend Rule 

901(a) of Regulation SBSR to assign 

reporting duties for: (1) Platformexecuted security-based swaps that will 

be submitted to clearing; and (2) 

clearing transactions. 

1. Proposed Rule 901(a)(1)—Reporting 

by Platforms 

The Commission is proposing a new 

subparagraph (1) of Rule 901(a), which 

would require a platform to report to a 

registered SDR any security-based swap 

that is executed on that platform and 

that will be submitted to clearing (i.e., 

any alpha executed on the platform).20

As the person with the duty to report 

the transaction, the platform would be 

able to select the registered SDR to 

which it reports.21

2. Proposed Reporting Obligations of 

Registered Clearing Agencies 

The Commission is proposing a new 

subparagraph (2)(i) of Rule 901(a), 

which would designate a registered 

clearing agency as the reporting side for 

all clearing transactions to which it is a 

counterparty. In its capacity as the 

reporting side, the registered clearing 

agency would be permitted to select the 

registered SDR to which it reports a 

clearing transaction. 

The Commission also is proposing 

certain rules to address reporting 

requirements for life cycle events arising 

from the clearing process. Subparagraph 

(i) of Rule 901(e)(1), as adopted, 

provides that the reporting side for a 

security-based swap must generally 

report a life cycle event of that swap, 

‘‘except that the reporting side shall not 

report whether or not a security-based 

swap has been accepted for clearing.’’ 

The Commission is proposing a new 

subparagraph (ii) of Rule 901(e)(1), 

which would require a registered 

clearing agency to report whether or not 

it has accepted an alpha security-based 

swap for clearing.22

Rule 901(e)(2), as adopted, requires a 

life cycle event to be reported ‘‘to the 

entity to which the original securitybased swap transaction will be or has 

been reported.’’ Thus, proposed Rule 

901(e)(1)(ii) would require a registered 

clearing agency to report to the 

registered SDR that received or will 

receive the transaction report of the 

alpha (the ‘‘alpha SDR’’) whether or not 

it has accepted the alpha for clearing. As 

discussed in Section II(C)(3), infra, the 

Commission is proposing that this 

obligation to report whether or not it has 

accepted the alpha for clearing would 

cause the registered clearing agency to 

become a participant of the alpha SDR. 

If the registered clearing agency does 

not know the identity of the alpha SDR, 

the registered clearing agency would be 

unable to report to the alpha SDR 

whether or not it accepted the alpha 

transaction for clearing, as would be 

required by proposed Rule 901(e)(1)(ii). 

Therefore, the Commission is proposing 

a new subparagraph (3) of Rule 901(a), 

which would require a platform or 

reporting side for a security-based swap 

that has been submitted to clearing to 

promptly provide the relevant registered 

clearing agency with the identity of the 

alpha SDR and the transaction ID of the 

alpha transaction that has been 

submitted to clearing. 

C. Discussion of Comments and Further 

Explanation of the Proposal 

The Commission requested and 

received comment on a wide range of 

issues related to Rules 901(a) and 

901(e), as initially proposed in the 

Regulation SBSR Proposing Release and 

as re-proposed in the Cross-Border 

Proposing Release. For example, in the 

Regulation SBSR Proposing Release, the 

Commission asked commenters about 

the types of entities that should have the 

duty to report security-based swaps and 

the practicability of the proposed 

reporting hierarchy in certain cases 

where the counterparties might not 

know each other’s identities.23

1. Reporting Clearing Transactions 

Six commenters addressed the 

Commission’s proposal to treat cleared 

security-based swaps the same as 

uncleared security-based swaps for 

purposes of assigning reporting 

obligations under Rule 901(a). Two 

commenters generally supported the 

Commission’s proposal, noting that it 

would allow security-based swap 

counterparties, rather than clearing 

agencies, to choose the registered SDR 

that receives data about their securitybased swaps.24 However, three other 

commenters objected to the proposal on 

statutory or operational grounds.25 One 

commenter argued that Title VII’s 

security-based swap reporting 

provisions and Regulation SBSR should 

not extend to clearing transactions.26

Two commenters stated that the 

reporting hierarchy in Regulation SBSR 

is appropriate for OTC bilateral markets, 

but that it should not be applied to 

cleared transactions because the 

clearing model substantially differs from 

OTC bilateral markets.27 These 

commenters argued that, in the 

alternative, if the Commission requires 

clearing transactions to be reported to a 

registered SDR, the clearing agency that 


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28See CME II at 4–5; CME/ICE Letter at 2–4; ICE 

Letter at 2–3. 

29 ISDA IV at 5 (stating further that . . .’’[I]f the 

Commission assigns responsibility to clearing 

agencies for the reporting of cleared [security-based 

swaps], the clearing agency should be the sole party 

responsible for reporting all the trade data for 

cleared swaps.’’) See also ICE Letter at 2–3 (stating 

that ‘‘The Clearing Agency is best positioned to 

have the sole responsibility to report . . . required 

swap data, including valuation data’’). 

30See CME/ICE Letter at 4; CME II at 4. 

31 15 U.S.C. 78m–1(a)(1). 

32See CME/ICE Letter at 2, 4; CME II at 4. 

33CME/ICE Letter at 4. 

34 15 U.S.C. 78m(m)(1)(G). 

35Section 13(n)(5)(G) of the Exchange Act, 15 

U.S.C. 78m(n)(5)(G), provides specified authorities 

other than the Commission with access to securitybased swap data held by SDRs, but does not grant 

similar access to security-based swap data held by 

registered clearing agencies. If the Commission 

relied exclusively on registered clearing agencies to 

store data for clearing transactions, the ability of 

other relevant authorities to access the information 

could be impaired. 

36See DTCC VI at 8–9; DTCC VIII (recommending 

that the Commission should not assign reporting 

obligations to clearing agencies because Regulation 

SBSR, as proposed and re-proposed, would not 

have required reporting by clearing agencies); 

MarkitSERV III at 4. 

37MarkitSERV III at 4. 

38See id. 

39CME/ICE Letter at 3–4. 

40 ISDA IV at 5. The Commission notes that 

Regulation SBSR as adopted does not require the 

reporting of the market value of a security-based 

swap. See Regulation SBSR Adopting Release, 

Section II(B)(3)(e) and Section II(B)(3)(k). 

41One commenter urged the Commission to be 

clear which party is responsible for reporting a 

clearing transaction in the event that reporting 

commences before security-based swap clearing 

agencies are required to register with the 

Commission or in the event that a security-based 

swap is cleared through a clearing agency that is not 

required to register, exempted from registration, or 

granted relief. See ISDA IV at 6. This commenter 

further recommended that the reporting 

requirement for a clearing agency should apply 

equally to clearing agencies required to register and 

those that may be exempted from the requirement 

but which clear security-based swaps subject to 

reporting. See id. The Commission believes that the 

proposed rules are clear as to which side would 

have the responsibility for reporting a clearing 

clears the alpha should have the duty to 

report the associated clearing 

transactions to a registered SDR of its 

choice.28 Another commenter expressed 

the view that a clearing agency is bestpositioned to report cleared securitybased swaps.29

a. Requirements for Reporting of 

Clearing Transactions to a Registered 

SDR 

Two commenters argued that the 

Exchange Act does not require data on 

clearing transactions to be reported to a 

registered SDR for regulatory reporting 

purposes.30 They noted that Section 

13A(a)(1) of the Exchange Act 31

provides that ‘‘[e]ach security-based 

swap that is not accepted for clearing by 

any clearing agency or derivatives 

clearing organization shall be reported’’ 

to a registered SDR or the Commission. 

In the view of these commenters, 

Section 13A(a)(1) is intended to ensure 

that the Commission has access to data 

for uncleared security-based swaps. 

Section 13A(a)(1) does not, according to 

these commenters, apply to clearing 

transactions, because complete data for 

these security-based swaps already 

would be collected, maintained, and 

made available to the Commission by 

the relevant clearing agency.32

Accordingly, these commenters contend 

that ‘‘any system that would require a 

Clearing Agency to make duplicative 

reports to an outside third party 

regarding [security-based swaps] it 

clears would be costly and 

unnecessary.’’ 33

The Commission does not agree with 

the commenters’ reading of the 

Exchange Act. While Section 13A(a) of 

the Exchange Act requires all uncleared 

security-based swaps to be reported to a 

registered SDR and specifies who must 

report an uncleared security-based 

swap, it does not address whether 

cleared security-based swaps must be 

reported to a registered SDR. However, 

Section 13(m)(1)(G) of the Exchange 

Act 34 provides that ‘‘[e]ach securitybased swap (whether cleared or 

uncleared) shall be reported to a 

registered security-based swap data 

repository.’’ This section explicitly 

requires reporting of each securitybased swap to a registered SDR, 

including a security-based swap that is 

a clearing transaction, because all 

security-based swaps necessarily are 

either cleared or uncleared. 

Furthermore, the Commission 

preliminarily believes that having data 

for all security-based swaps reported to 

registered SDRs will provide the 

Commission and other relevant 

authorities with the most efficient 

access to security-based swap 

information.35 If data for clearing 

transactions were not reported to 

registered SDRs, the Commission would 

have to obtain transaction information 

from multiple types of registered 

entities—i.e., registered clearing 

agencies as well as registered SDRs—to 

obtain a complete picture of the 

security-based swap market. Obtaining 

transaction data separately from 

additional types of registrants would 

exacerbate concerns about 

fragmentation of the data that could be 

reduced by requiring all security-based 

swap transactions to be reported to 

registered SDRs. For example, registered 

clearing agencies might store, maintain, 

and furnish data to the Commission in 

a format different from the data 

provided by registered SDRs, which 

would force the Commission to expend 

greater resources harmonizing the data 

sets. 

b. Determining the Reporting Side for 

Clearing Transactions 

Two commenters supported the 

Commission’s original proposal to 

assign reporting obligations for all 

security-based swaps, including clearing 

transactions, through the reporting 

hierarchy in all circumstances.36 One of 

these commenters expressed the view 

that counterparty choice would ‘‘ensure 

that a party to the transaction (instead 

of a platform or clearinghouse) can 

chose [sic] the most efficient manner of 

performing its reporting across all of the 

regions and asset classes that it is active 

in.’’ 37 This commenter further stated 

that permitting a platform or clearing 

agency to report security-based swaps 

would impose costs on market 

participants by obligating them to 

establish connectivity to multiple trade 

repositories.38

Three other commenters objected to 

this aspect of Regulation SBSR, as 

proposed and re-proposed. Two of these 

commenters argued that, if clearing 

transactions are subject to Regulation 

SBSR, they should be reported by the 

clearing agency that clears the alpha: 

‘‘In contrast to uncleared [security-based 

swaps], the Clearing Agency is the sole 

party who holds the complete and 

accurate record of transactions and 

positions for cleared [security-based 

swaps] and in fact is the only entity 

capable of providing accurate and useful 

positional information on cleared 

[security-based swaps] for systemic risk 

monitoring purposes.’’ 39 The other 

commenter stated that the clearing 

agency is best positioned to report 

cleared security-based swaps timely and 

accurately as an extension of the 

clearing process, and that the clearing 

agency should be the sole party 

responsible for reporting all the trade 

data for cleared swaps, including 

valuation data.40

After careful consideration of the 

comments, the Commission now 

preliminarily believes that a registered 

clearing agency should have the duty to 

report any clearing transaction to which 

it is a counterparty. The Commission 

believes that, because the registered 

clearing agency creates the clearing 

transactions to which it is a 

counterparty, the registered clearing 

agency is in the best position to provide 

complete and accurate information for 

the clearing transactions resulting from 

the security-based swaps that it clears.41


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transaction. The Commission notes that proposed 

Rule 901(a)(2)(i) would impose the duty to report 

clearing transactions on registered clearing 

agencies. It is possible that a non-U.S. person could 

register with the Commission as a clearing agency 

under Section 17A of the Exchange Act, 15 U.S.C. 

78q–1. The Commission generally believes that, if 

a person registers with the Commission as a 

clearing agency, it should assume the same 

obligations as all other persons that register as 

clearing agencies. Proposed Rule 901(a)(2)(i) would 

not apply to unregistered clearing agencies (i.e., 

persons that act as clearing agencies outside the 

United States that are not required to, and choose 

not to, register with the Commission). If in the 

future the Commission contemplates a process for 

exempting clearing agencies from registration or 

considers an application for relief from clearing 

agency registration requirements, the Commission 

could at that time consider the issue of whether to 

extend the duty to report clearing transactions to an 

exempt clearing agency. 

42See CME/ICE Letter at 3–4. Even the 

commenters who opposed reporting by clearing 

agencies did not suggest that a clearing agency lacks 

adequate information to report the beta and the 

gamma. 

43See DTCC VI at 8–9; DTCC VIII (noting that 

Regulation SBSR, as proposed and re-proposed, 

would not have required reporting by clearing 

agencies); MarkitSERV III at 4. 

44See Regulation SBSR Adopting Release, 

Section V. See also Vanguard Letter at 6 (noting that 

clearing agencies, platforms, security-based swap 

dealers, and major security-based swap participants 

would be better situated to report security-based 

Continued 

The Commission understands that 

certain registered clearing agencies that 

offer central clearing in swaps currently 

report their clearing transactions to 

swap data repositories that are 

provisionally registered with the CFTC. 

These registered clearing agencies have 

adopted rules stating that they will 

comply with the CFTC’s swap data 

reporting rules by reporting beta and 

gamma swaps to a swap data repository 

that is an affiliate or business unit of the 

registered clearing agency. These 

current swap market practices evidence 

the ability of registered clearing 

agencies to report clearing transactions. 

The Commission’s proposal to assign to 

registered clearing agencies the duty to 

report clearing transactions is intended, 

in part, to promote efficiency in the 

reporting process under Regulation 

SBSR by leveraging these existing 

workflows. 

The Commission has considered the 

following alternatives to proposed Rule 

901(a)(2)(i): 

(1) Utilize the reporting hierarchy in 

Regulation SBSR, as re-proposed. Under 

this approach, a registered clearing 

agency would occupy the lowest spot in 

the hierarchy, along with other persons 

who are neither registered securitybased swap dealers nor registered major 

security-based swap participants. Thus, 

in the case of a beta or gamma 

transaction between a registered 

security-based swap dealer or registered 

major security-based swap participant 

and a registered clearing agency, the 

registered security-based swap dealer or 

registered major security-based swap 

participant would be the reporting side. 

In the case of a beta or gamma 

transaction between a non-registered 

person and a registered clearing agency, 

the outcome would depend on whether 

the non-clearing agency direct 

counterparty is guaranteed by a 

registered security-based swap dealer or 

registered major security-based swap 

participant. If the non-clearing agency 

direct counterparty is guaranteed by a 

registered security-based swap dealer or 

registered major security-based swap 

participant, that side would be the 

reporting side. If the non-clearing 

agency direct counterparty has no 

guarantor or is guaranteed by a person 

who is not a registered security-based 

swap dealer or registered major securitybased swap participant, there would be 

a tie and the sides would be required to 

select the reporting side. 

(2) Modify the re-proposed hierarchy 

to place registered clearing agencies 

above other non-registered persons but 

below registered security-based swap 

dealers and registered major securitybased swap participants. Thus, in a 

transaction between a registered 

clearing agency and a registered 

security-based swap dealer (or a 

transaction between a registered 

clearing agency and a non-registered 

person who is guaranteed by a 

registered security-based swap dealer), 

the outcome would be the same as in 

Alternative 1: The side with the 

registered security-based swap dealer 

would have the duty to report. However, 

the outcome would be different from 

Alternative 1 in the case of a beta or 

gamma transaction between a registered 

clearing agency and a non-registered 

person who is not guaranteed by a 

registered security-based swap dealer or 

registered major security-based swap 

participant: Instead of the sides 

choosing, the registered clearing agency 

would have the duty to report. 

(3) Require the reporting side of the 

alpha to report both the beta and 

gamma transaction. Under this 

approach, the reporting side of the alpha 

transaction also would be the reporting 

side for the beta and gamma 

transactions. Under this approach, the 

beta and gamma could be viewed as life 

cycle events of the alpha, and thus 

should be treated like other life cycle 

events of the alpha, which the reporting 

side of the alpha has the duty to report. 

The Commission preliminarily 

believes that each of these three 

alternatives for assigning the reporting 

duty for clearing transactions would be 

less efficient and could result in less 

reliable reporting than assigning to 

registered clearing agencies the duty to 

report all clearing transactions. Two 

commenters have asserted that a 

clearing agency is the only party that 

has complete information about clearing 

transactions immediately upon their 

creation.42 Each of the three alternatives 

could require a person who does not 

have information about the clearing 

transaction at the time of its creation to 

report that transaction. The only way 

such a person could discharge its 

reporting duty would be to obtain the 

information from the registered clearing 

agency or from the counterparty to the 

registered clearing agency. This extra 

and unnecessary step could introduce 

more opportunities for data 

discrepancies, errors, or delays in 

reporting. The Commission 

preliminarily believes instead that a 

more efficient way to obtain a regulatory 

report of each clearing transaction 

would be to require the registered 

clearing agency to report each clearing 

transaction to a registered SDR directly. 

Under Alternative 1, applying the 

reporting hierarchy to a transaction 

between a registered clearing agency 

and a registered security-based swap 

dealer or registered major security-based 

swap participant would result in the 

side opposite the clearing agency being 

the reporting side for the security-based 

swap. This approach would comport 

with the suggestion of commenters who 

opposed placing reporting obligations 

on registered clearing agencies.43 As 

discussed above, however, the 

Commission believes that it would be 

more efficient to require the registered 

clearing agency to report the 

transaction. Furthermore, applying the 

reporting hierarchy to a transaction 

between a registered clearing agency 

and another non-registered person 

(assuming it is not guaranteed by a 

registered security-based swap dealer or 

major security-based swap participant) 

would require the sides to select the 

reporting side. While it is likely that the 

counterparties in this case would select 

the registered clearing agency as the 

reporting side, the Commission 

preliminarily believes that it would be 

more efficient to obviate the need for 

registered clearing agencies and nonregistered persons to negotiate reporting 

duties. As discussed in the Regulation 

SBSR Adopting Release, the 

Commission designed Rule 901(a), in 

part, to minimize the possibility of 

reporting obligations being imposed on 

non-registered counterparties.44


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swaps than other types of market participants, such 

as buy-side firms). 

45See Regulation SBSR Adopting Release, 

Section V(B)(2) at note 267 (‘‘Under Rule 900(g), a 

security-based swap that results from clearing is an 

independent security-based swap and not a life 

cycle event of a security-based swap that is 

submitted to clearing. Thus, Rule 901(e), which 

addresses the reporting of life cycle events, does not 

address what person has the duty to report the 

clearing transactions that arise when a securitybased swap is accepted for clearing’’). 

46See Regulation SBSR Adopting Release, 

Section V(B)(2) (‘‘The reporting side may select the 

registered SDR to which it makes the required 

report’’). 

47See Regulation SBSR Adopting Release, 

Section V(B). However, the determination by a 

registered clearing agency of whether or not to 

accept the alpha for clearing is a life cycle event of 

the alpha. Proposed Rule 901(e)(1)(ii) would require 

registered clearing agencies to report these life cycle 

events to the alpha SDR. 

48See Regulation SBSR Adopting Release, 

Section V(B). 

49See Regulation SBSR Adopting Release, 

Section II(B)(3)(j) (explaining that Rule 901(d)(10), 

as adopted, will facilitate the Commission’s ability 

to link transactions using the transaction ID); 

Regulation SBSR Adopting Release, Section VIII 

(further describing the ability of the Commission to 

link related transactions using the transaction ID). 

Alternative 2 would assign the 

reporting obligation to a registered 

security-based swap dealer or registered 

major security-based swap participant 

when it is a counterparty to a registered 

clearing agency, while avoiding the 

need for non-registered persons to 

negotiate reporting obligations with 

registered clearing agencies. The 

Commission preliminarily believes, 

however, that this alternative—like 

Alternatives 1 and 3—would be less 

efficient than requiring the registered 

clearing agency to report the transaction 

information directly to a registered SDR, 

because the registered clearing agency is 

the only person who has complete 

information about a clearing transaction 

immediately upon its creation. 

Under Alternative 3, the reporting 

side for the alpha also would be the 

reporting side for the beta and gamma. 

Alternative 3 would require the 

reporting side for the alpha also to 

report information about a securitybased swap—the clearing transaction 

between the registered clearing agency 

and the non-reporting side of the 

alpha—to which it is not a counterparty. 

The Commission could require the nonreporting side of the alpha to transmit 

information about its clearing 

transaction to the reporting side of the 

alpha. In theory, this would allow the 

reporting side of the alpha to report both 

the beta and the gamma. The 

Commission believes, however, that this 

result could be difficult to achieve 

operationally and, in any event, could 

create confidentiality concerns, as an 

alpha counterparty may not wish to 

reveal information about its clearing 

transactions except to the registered 

clearing agency (and, if applicable, its 

clearing member). Moreover, all other 

things being equal, having more steps in 

the reporting process—e.g., more data 

transfers between execution and 

reporting—introduces greater 

opportunity for data discrepancies and 

delays than having fewer steps. Also, 

because the reporting side of the alpha 

would have the duty to report the beta 

and gamma, Alternative 3 is premised 

on the view that the beta and gamma are 

life cycle events of the alpha. The 

Commission, however, considered and 

rejected this approach in the Regulation 

SBSR Adopting Release.45

In sum, having considered these 

alternatives, the Commission 

preliminarily believes that the most 

direct and efficient way of reporting 

clearing transactions to a registered SDR 

is to assign to a registered clearing 

agency the duty to report all clearing 

transactions to which it is a 

counterparty. Therefore, the 

Commission is proposing new 

subparagraph (i) of Rule 901(a)(2) to 

achieve this result. A registered clearing 

agency has complete information about 

all clearing transactions to which it is a 

counterparty, including betas and 

gammas that arise from clearing alpha 

security-based swaps. The alternative 

reporting regimes discussed above could 

result in less efficiencies in reporting, 

and thus greater costs, because persons 

that are less likely to have established 

infrastructure for reporting or that do 

not possess the same degree of direct 

and complete access to the relevant data 

as the registered clearing agency could 

have the duty to report. Furthermore, 

these non-clearing agency 

counterparties would first have to 

obtain information about executed 

clearing transactions from the registered 

clearing agency before they, in turn, 

could provide the transaction 

information to a registered SDR. This 

extra step in reporting could result in 

delays, or create opportunities for errors 

that could lead to a loss of data 

integrity. The Commission preliminarily 

believes that data discrepancies, errors, 

and delays are less likely to occur if the 

duty to report information about 

clearing transactions were assigned to 

registered clearing agencies directly. 

c. Choice of Registered SDR for Clearing 

Transactions 

The Commission has carefully 

considered how registered clearing 

agencies would fulfill their reporting 

obligations under proposed Rule 

901(a)(2)(i), including whether 

registered clearing agencies could 

choose the registered SDR to which they 

report or whether they should be 

required to report clearing transactions 

to the registered SDR that received the 

report of the associated alpha 

transaction. Regulation SBSR allows the 

reporting side to choose the registered 

SDR to which it reports, subject to the 

requirement that reports of life cycle 

events must be made to the same 

registered SDR that received the initial 

report of the security-based swap.46

As noted in the Regulation SBSR 

Adopting Release, a clearing transaction 

is an independent security-based swap 

and not a life cycle event of an alpha 

security-based swap that is submitted to 

clearing.47 As discussed in the 

Regulation SBSR Adopting Release, the 

Commission believes that, in general, 

the person with the duty to report a 

security-based swap under Rule 901(a) 

should be permitted to discharge this 

duty by reporting to a registered SDR of 

its choice.48 This approach is designed 

to promote efficiency by allowing the 

person with the reporting duty to select 

the registered SDR that offers it the 

greatest ease of use or the lowest fees. 

Under proposed Rule 901(a)(2)(i), a 

registered clearing agency would be the 

reporting side for all clearing 

transactions to which it is a 

counterparty; because the registered 

clearing agency would have the duty to 

report, it also would have the ability to 

choose the registered SDR. The 

Commission considered proposing that 

reports of betas and gammas go to the 

same registered SDR that received the 

report of the associated alpha, but has 

declined to do so, for the reasons 

discussed below. 

If Regulation SBSR were to require 

registered clearing agencies to report 

betas and gammas to the registered SDR 

that received the report of the associated 

alpha, the registered clearing agency 

would be required to report to a 

registered SDR that might not offer it the 

greatest ease of use or the lowest fees. 

As such, this result could be less 

efficient for the registered clearing 

agency than the alternative approach of 

permitting the registered clearing 

agency to choose the registered SDR to 

which it reports the beta and gamma. 

Moreover, the Commission 

preliminarily believes that it would 

have sufficient tools to be able to track 

related transactions across SDRs,49 and 

thus that it would be appropriate to 

allow a registered clearing agency to 

choose where to report the beta and 

gamma, even if it chooses to report to 


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50See MarkitSERV III at 4, n. 11. 

51Nor does Regulation SBSR require a nonreporting side to alert a registered SDR if it becomes 

aware that any security-based swap information has 

been reported erroneously. Under the proposed 

amendments to Rule 905(a) discussed below, if an 

error is discovered by a person other than the 

person having the duty to report a security-based 

swap, the person who discovered the error would 

report such error to the person who had the duty 

to report the transaction, rather than to the 

registered SDR directly. 

52Non-clearing agency counterparties to clearing 

transactions might incur modest costs associated 

with reporting certain unique identification code 

(‘‘UIC’’) information required by Rule 906(a), e.g., 

their branch ID, broker ID, trader ID, and trading 

desk ID, as applicable. See Regulation SBSR 

Adopting Release, Section XXII(C)(6)(c) (discussing 

the costs of complying with Rule 906(a), as 

adopted). 

53See ICE Letter at 2–5. 

a registered SDR other than the alpha 

SDR. 

One commenter asserted that allowing 

a registered clearing agency to report 

betas and gammas to a registered SDR of 

the clearing agency’s choice, rather than 

to the alpha SDR, would impose 

substantial costs on security-based swap 

counterparties because the non-clearing 

agency counterparties would have to 

establish connectivity to multiple 

SDRs.50 This comment appears 

premised on the idea that non-clearing 

agency counterparties would have 

ongoing obligations to report subsequent 

information—such as life cycle events 

or a daily mark of the security-based 

swap—to registered SDRs not of their 

choosing, which could force them to 

establish connections to multiple 

registered SDRs. However, proposed 

Rule 901(a)(2)(ii) would assign the 

reporting duty for a clearing transaction 

to the registered clearing agency, and 

Regulation SBSR, as adopted, does not 

impose any duty on a non-reporting side 

to report life cycle events or a daily 

mark.51 Therefore, the Commission does 

not believe that any duty under 

Regulation SBSR, as adopted, or the 

amendments to Regulation SBSR 

proposed herein, would cause nonclearing agency counterparties to incur 

significant costs resulting from the 

ability of a registered clearing agency to 

select the registered SDR to which it 

reports clearing transactions.52

d. Reporting Whether an Alpha 

Transaction is Accepted for Clearing 

One commenter expressed the view 

that a clearing agency would be wellpositioned to issue a termination report 

for the alpha and subsequently report 

the beta, gamma, and, if necessary, open 

positions to a registered SDR.53 The 

Commission agrees with this commenter 

and is therefore proposing a new 

subparagraph (ii) of Rule 901(e)(1), 

which would require a registered 

clearing agency to report to the alpha 

SDR whether or not it has accepted the 

alpha for clearing. Rule 901(e)(1)(i), as 

adopted, requires the reporting side of a 

security-based swap to report—to the 

same entity to which it reported the 

original transaction—any life cycle 

event (or adjustment due to a life cycle 

event) except for whether or not the 

security-based swap has been accepted 

for clearing. Proposed Rule 901(e)(1)(ii) 

would address the reporting of whether 

or not the security-based swap has been 

accepted for clearing, and would assign 

that duty to the registered clearing 

agency to which the transaction is 

submitted for clearing, rather than to the 

reporting side of the original 

transaction. Proposed Rule 901(e)(1)(ii) 

would ensure that all potential life cycle 

events (and adjustments due to life 

cycle events) would be subject to 

regulatory reporting, and that 

Regulation SBSR would specify the 

person who has the duty to report each 

kind of life cycle event (or adjustment). 

When an alpha is submitted for 

clearing, the registered clearing agency 

will review the trade and decide 

whether or not to accept it. Acceptance 

for clearing can result in the termination 

of the alpha and the creation of the beta 

and gamma. Furthermore, rejection from 

clearing is an important event in the life 

of the alpha—because rejection could 

result in the voiding of the transaction 

or the activation of credit support 

provisions that would alter the character 

of the transaction—and thus is the kind 

of event that Rule 901(e) is designed to 

capture for regulatory purposes. 

Accordingly, proposed Rule 901(e)(1)(ii) 

would require a registered clearing 

agency to report whether or not it has 

accepted a security-based swap for 

clearing. 

The Commission preliminarily 

believes that requiring a registered 

clearing agency, rather than the 

reporting side of the alpha, to report 

whether or not the registered clearing 

agency has accepted an alpha for 

clearing is consistent with the 

Commission’s approach of assigning 

reporting obligations to the person with 

the most complete and efficient access 

to the required information. The 

registered clearing agency would have 

the most complete and efficient access 

to information about whether a 

particular alpha has been accepted for 

clearing because the registered clearing 

agency determines whether to accept a 

submitted alpha and knows the precise 

moment when the transaction is cleared. 

Although it would be possible for the 

reporting side for the alpha transaction 

to report whether a registered clearing 

agency has accepted the alpha for 

clearing, the reporting side would need 

to learn this information from the 

clearing agency. The Commission 

preliminarily believes it is more 

efficient to require the registered 

clearing agency to report to the alpha 

SDR whether or not the registered 

clearing agency has accepted the alpha 

for clearing. 

Rule 901(e)(2), as adopted, requires 

whoever has the duty to report a life 

cycle event to include in the report of 

the life cycle event the transaction ID of 

the original transaction. If the 

Commission ultimately adopts proposed 

Rule 901(e)(1)(ii), a registered clearing 

agency that accepts or rejects an alpha 

transaction from clearing would incur 

this duty under existing Rule 901(e)(2). 

The transaction ID of the alpha 

transaction is information that the 

registered clearing agency might not 

have, because the registered clearing 

agency is not involved in the execution 

or reporting to a registered SDR of the 

alpha transaction. Therefore, the 

Commission also is proposing a new 

subparagraph (3) of Rule 901(a), which 

would provide that ‘‘a person who, 

under [Rule 901(a)(1) or 901(a)(2)(ii)] 

has a duty to report a security-based 

swap that has been submitted to 

clearing at a registered clearing agency 

shall promptly provide that registered 

clearing agency with the transaction ID 

of the submitted security-based swap 

and the identity of the registered 

security-based swap data repository to 

which the transaction will be reported 

or has been reported.’’ Proposed Rule 

901(a)(3) would ensure that the 

registered clearing agency knows the 

identity of the alpha SDR and the 

transaction ID of the alpha, so that the 

registered clearing agency knows where 

to report whether or not it accepts the 

alpha for clearing—as required under 

existing Rule 901(e)(2)—and so that this 

report can be linked to the alpha report. 

The Commission recognizes the 

potential for proposed Rules 

901(e)(1)(ii) and 901(a)(3) to result in 

the registered clearing agency reporting 

whether or not it accepted the alpha for 

clearing to the alpha SDR before the 

alpha transaction itself has been 

reported to the alpha SDR. This could 

occur during the interim phase for 

regulatory reporting and public 

dissemination, which the Commission 

discussed in Section VII of the 

Regulation SBSR Adopting Release. 

Rule 901(j), as adopted, generally 

permits the person with the duty to 

report a security-based swap up to 24 

hours after the time of execution to 

report to a registered SDR the 

transaction information required by 

Rules 901(c) and 901(d). Accordingly, 


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54To submit the report contemplated by proposed 

Rule 901(e)(1)(ii), the registered clearing agency 

would need to know the transaction ID of the alpha. 

The person with the duty to report the alpha might 

know the transaction ID of the alpha before it 

reports the transaction to a registered SDR. Under 

Rules 903(a) and 907(a)(5), as adopted, there is no 

requirement that a registered SDR itself assign a 

transaction ID. Under those rules, a registered SDR 

may allow third parties—such as reporting sides or 

platforms—to assign a transaction ID using a 

methodology endorsed by the registered SDR. If the 

registered SDR allows third parties to assign the 

transaction ID, the reporting side or platform could 

tell the registered clearing agency the transaction 

ID, which in turn could allow the registered 

clearing agency to report to the alpha SDR whether 

or not the alpha has been accepted for clearing 

before the alpha has been reported to the registered 

SDR. If, however, the person with the duty to report 

the alpha does not obtain the transaction ID until 

it reports the alpha to a registered SDR, the person 

could not provide the transaction ID of the alpha 

to the registered clearing agency, and the registered 

clearing agency could not report whether or not it 

accepts the alpha for clearing until after it received 

alpha’s transaction ID. 

55See ICI I at 5; Tradeweb Letter at 3–4; Vanguard 

Letter at 2, 7. 

56See Tradeweb Letter at 3. 

57See id. at 3–4. The commenter also noted that 

the CFTC’s proposed swap data reporting rules 

would require a SEF or designated contract market 

to report a swap executed on its facilities. See id. 

at 4. The CFTC has subsequently adopted a final 

rule that requires SEFs and designated contract 

markets to report swaps executed on their facilities. 

See 17 CFR 45.3. 

58See Vanguard Letter at 7; ICI I at 5 (arguing that 

because investment funds would need to spend 

significant time and resources to build securitybased swap reporting systems, platforms and 

security-based swap dealers should be obligated to 

report security-based swap data). 

59See ISDA/SIFMA I at 18; ISDA IV at 7; 

MarkitSERV III at 4; WMBAA II at 6. 

60See Regulation SBSR Adopting Release, 

Section V. 

61The Commission notes that the offer and sale 

of security-based swaps, even if affected 

anonymously on a platform, must either be 

registered under the Securities Act or be made 

pursuant to an exemption from registration. The 

registration exemption in Section 4(a)(2) of the 

Securities Act, 15 U.S.C. 77d(a)(2), generally is 

available for transactions by an issuer not involving 

any public offering. One factor in determining the 

availability of the Section 4(a)(2) exemption is that 

the purchasers of the securities in the transaction 

must be sophisticated investors. As previously 

noted by the Commission, Congress determined that 

eligible contract participants are sophisticated 

investors for purposes of security-based swap 

transactions. See Exemptions for Security-Based 

Swaps Issued By Certain Clearing Agencies, 

Securities Act Release No. 9308 (March 30, 2012), 

77 FR 20536 (April 5, 2012); Exemptions for 

Security-Based Swaps, Securities Act Release No. 

9231 (July 1, 2011), 76 FR 40605 (July 11, 2011). 

The Commission believes that Congressional 

determination of eligible contract participants as 

sophisticated investors for purposes of securitybased swap transactions applies as well for 

purposes of Section 4(a)(2) of the Securities Act. In 

addition, the exemption in Rule 240 under the 

Securities Act, 17 CFR 230.240, also may be 

available for security-based swap transactions 

involving eligible contract participants, to the 

extent applicable. 

an alpha could be submitted for clearing 

immediately after execution, but not 

reported to a registered SDR for up to 24 

hours (or, if 24 hours after the time of 

execution would fall on a day that is not 

a business day, by the same time on the 

next day that is a business day). If the 

registered clearing agency accepts the 

alpha for clearing, the registered 

clearing agency might, pursuant to 

proposed Rule 901(e)(1)(ii), submit a 

report of this life cycle event to the 

alpha SDR before the alpha SDR has 

received the transaction report of the 

alpha transaction itself.54

To account for this possibility, the 

Commission is proposing a minor 

amendment to Rule 901(e)(2). Rule 

901(e)(2), as adopted, states in relevant 

part that a life cycle event must be 

reported ‘‘to the entity to which the 

original security-based swap transaction 

was reported’’ (emphasis added). Under 

the proposed amendment to Rule 

901(e)(2), a life cycle event would have 

to be reported ‘‘to the entity to which 

the original security-based swap 

transaction will be reported or has been 

reported.’’ This amendment mirrors the 

language in proposed Rule 901(a)(3), 

which would require a person who 

reports an alpha to provide the 

registered clearing agency to which the 

alpha is submitted the transaction ID of 

the alpha and the identity of the 

registered SDR to which the alpha ‘‘will 

be reported or has been reported.’’ 

A registered SDR should consider—in 

formulating its policies and procedures 

under Rule 907(a), as adopted—whether 

those policies and procedures should 

address the situation where it receives 

a report from a registered clearing 

agency stating whether or not it has 

accepted an alpha (with a particular 

transaction ID) for clearing before the 

registered SDR has received a 

transaction report of the alpha. For 

example, the policies and procedures 

could provide that the registered SDR 

would hold a report from a registered 

clearing agency that it accepted the 

alpha for clearing in a pending state 

until it receives the transaction report of 

the alpha, and then disseminate the 

security-based swap transaction 

information and the fact that the alpha 

has been terminated as a single report. 

2. Reporting by a Platform 

Some commenters, responding to 

Rule 901(a) as initially proposed, 

suggested that the Commission require a 

platform to report security-based swaps 

executed on or through its facilities.55

One of these commenters stated that a 

platform would have the technology to 

report a security-based swap executed 

on its facilities and would be in the best 

position to ensure that the transaction 

was reported accurately and on a realtime basis.56 This commenter also stated 

that the counterparties to a transaction 

executed on a platform should be 

relieved of any reporting obligations 

because they would not be in a position 

to control or confirm the accuracy of the 

information reported or to control the 

timing of the platform’s reporting.57

Another commenter expressed the view 

that having platforms report securitybased swaps would facilitate economies 

in the marketplace because fewer 

entities, including end users, would be 

required to build the systems necessary 

to support security-based swap 

reporting.58 Four commenters, however, 

raised concerns about imposing 

reporting requirements on platforms.59

After carefully considering these 

comments, the Commission is proposing 

to require a platform to report any 

security-based swap that is executed on 

the platform, but only if the securitybased swap will be submitted to 

clearing. Proposed Rule 901(a)(1) 

provides that, if a security-based swap 

is executed on a platform and will be 

submitted to clearing, the platform on 

which the transaction was executed 

shall report to a registered SDR the 

information required by Rules 901(c) 

(the primary trade information), 

901(d)(1) (the participant ID or 

execution agent ID for each 

counterparty, as applicable), and 

901(d)(9) (the platform ID). If the 

security-based swap will not be 

submitted to clearing, the platform 

would have no reporting obligations 

under Regulation SBSR. Instead, the 

reporting hierarchy in Rule 901(a)(2)(ii), 

as adopted, will determine which side 

is the reporting side for such a platformexecuted transaction.60 As discussed 

below, proposed subparagraph (1) of 

Rule 901(a) is intended to maximize the 

accuracy and completeness of data 

reported to registered SDRs, while 

continuing to align the reporting duty 

with persons that are best able to carry 

it out. 

The Commission understands that 

each counterparty to a platformexecuted transaction that will be 

submitted to clearing intends to assume 

the credit risk of the clearing agency 

rather than any of the other platform 

participants, so there is no need to have 

credit and other documentation in place 

between itself and its counterparty. 

Thus, such a transaction could be 

executed anonymously, as there might 

be no mechanism by which one 

counterparty would learn the identity of 

the other.61 The direct counterparties to 

such an alpha might not know which 

side would be the reporting side (if the 

hierarchy in Rule 901(a)(2), as adopted, 


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62Cf. Cross-Border Adopting Release, 79 FR 

47325 (creating an exception, from having to be 

counted against the de minimis thresholds, for 

certain security-based swap transactions that a nonU.S. person enters into anonymously on a platform 

and that are cleared through a clearing agency, 

because each counterparty would not be in a 

position to know whether the other is a U.S. 

person). 

63Rule 901(d)(1) requires the reporting side to 

provide the counterparty ID or execution agent ID 

for each counterparty, as applicable. If the 

execution occurs anonymously, neither side would 

know the counterparty ID or execution agent ID of 

the other side. 

64See supra note 59. 

65MarkitSERV III at 4. 

66See id. (stating that counterparties should be 

able to choose the registered SDR ‘‘regardless of 

whether the transaction is executed on a SEF’’). 

67 ISDA/SIFMA I at 18. See also ISDA IV at 7 

(stating that the clearing agency should be 

responsible for reporting the alpha trade once it has 

been accepted for clearing, and that one of the 

counterparties should be responsible per the 

reporting hierarchy for reporting a bilateral 

transaction that is not intended for clearing). The 

last commenter also stated that certain aspects of 

the CFTC regime for reporting bilateral swaps 

executed on a facility have been challenging due to 

the difficulty for SEFs to know and report certain 

trade data that is not essential to trade execution, 

and because of the shared responsibility for 

reporting since the SEF/DCM is responsible for the 

initial creation data reporting and the SD/MSP is 

responsible for continuation data reporting. See id. 

The Commission notes that Regulation SBSR, as 

adopted, applies the reporting hierarchy in Rule 

901(a) to a security-based swap executed on a 

platform that is not intended to be cleared. See 

Regulation SBSR Adopting Release, Section V(C)(4). 

68WMBAA II at 6. 

applied) and there might be no 

mechanism for them to learn this 

information because they would not be 

assuming each other’s credit risk.62

Even if the direct counterparties could 

agree that one side—for example, the 

side selling protection in a single-name 

credit default swap—would report the 

trade, the reporting side might not learn 

the identity of its counterparty even 

though Rule 901(d)(1), as adopted, 

requires the reporting side to report all 

counterparty IDs.63

Although some platform-executed 

transactions that will be submitted to 

clearing might not be executed 

anonymously, the Commission 

preliminarily believes that it would be 

more efficient to require the platform to 

report all security-based swaps executed 

on that platform that will be submitted 

to clearing, regardless of whether the 

counterparties are, in fact, anonymous 

to each other. The Commission 

preliminarily believes that assigning the 

duty to report to the platform minimizes 

the number of reporting steps and thus 

minimizes the possibility of data 

corruption and delays in reporting the 

transaction to a registered SDR. Thus, 

the Commission preliminarily believes 

that all platform-executed transactions 

that will be submitted to clearing should 

be reported by the platform. This 

approach would be more efficient than 

if the platform had to assess on a 

transaction-by-transaction basis whether 

or not the counterparties are in fact 

unknown to each other. 

As noted above,64 four commenters 

generally opposed assigning to 

platforms the duty to report securitybased swap transactions. One 

commenter stated generally that ‘‘the 

reporting party should be able to choose 

which SDR to report to, while being 

allowed to delegate the actual reporting 

to qualified third parties where it sees 

fit.’’ 65 The commenter appeared to 

suggest that a platform could be a 

qualified third party acting as an agent 

for a reporting side.66 The Commission 

agrees with the commenter that the 

platform is well-placed to carry out the 

act of reporting, but, unlike the 

commenter, the Commission 

preliminarily believes that the platform 

itself should have the legal duty to 

report for the reasons discussed above. 

Three other commenters argued 

generally that platforms should not be 

assigned the duty to report because they 

lack certain information that would 

have to be reported. One of these 

commenters stated, for example, that 

‘‘the SB SEF or national securities 

exchange may not itself have access to 

all of the information required, such as 

whether the trade has been accepted for 

clearing.’’ 67 The other commenter 

argued that ‘‘[t]he SB SEF would likely 

not be privy to all of the terms required 

to be reported in accordance with 

proposed Regulation SBSR, such as, but 

not limited to: (i) Contingencies of the 

payment streams of each counterparty to 

the other; (ii) the title of any master 

agreement or other agreement governing 

the transaction; (iii) data elements 

necessary to calculate the market value 

of the transaction; and (iv) other details 

not typically provided to the SB SEF by 

the customer, such as the actual desk on 

whose behalf the transaction is entered. 

Moreover, and quite critical, an SB SEF 

would not be in a position or 

necessarily have the capabilities to 

report life cycle event information. 

Indeed, even if an SB SEF were required 

to report the transaction details as the 

proposed regulation requires, something 

we do not think advisable, it would 

likely take at least 30 minutes to gather 

and confirm the accuracy of that 

information.’’ 68

The Commission shares the 

commenters’ concern that it would not 

be appropriate to require platforms to 

report information that they do not have 

or that would be impractical to obtain. 

However, a close examination of the 

data elements that must be reported 

under Rules 901(c) and 901(d), as 

adopted, suggests that a platform would 

not be put in this position: 

• Rule 901(c)(1) requires reporting of 

the product ID, if available, or else other 

information that identifies the securitybased swap. Proposed Rule 901(a)(1) 

would apply only to platform-executed 

security-based swaps submitted to 

clearing, which suggests that these are 

products that would have a product ID. 

Even if these security-based swaps did 

not have a product ID, the platform 

would have sufficient information to 

identify a security-based swap traded on 

its facilities to allow its subscribers to 

trade it; this same information would be 

sufficient for the platform to report the 

information required by Rule 901(c)(1) 

to a registered SDR. 

• Rules 901(c)(2), 901(c)(3), and 

901(c)(4) require reporting of the date 

and time of execution, the price, and the 

notional amount, respectively, of the 

security-based swap. The platform will 

know these data elements because they 

were determined on the platform’s 

facilities. 

• Rule 901(c)(5) requires reporting of 

whether both sides of the transaction 

include a registered security-based swap 

dealer. The Commission anticipates that 

this information will be publicly 

available, or the platform could easily 

obtain it from a platform participant. 

• Rule 901(c)(6) requires reporting of 

whether the direct counterparties intend 

that the security-based swap will be 

submitted to clearing. Rule 901(d)(6) 

requires reporting of the name of the 

clearing agency to which the securitybased swap will be submitted to 

clearing. The fact that the transaction is 

intended to be cleared may be implicit 

in the product ID (e.g., if the securitybased swap traded has a product ID of 

a ‘‘made available to trade’’ product). 

Alternatively, the counterparties may 

inform the platform that the securitybased swap will be submitted to 

clearing; in some cases, the platform 

may provide the mechanism for 

reporting the transaction to a clearing 

agency. The Commission presumes that, 

if the platform knows that the securitybased swap will be submitted to 

clearing, the platform will also know the 

name of the clearing agency. If the 

platform has no knowledge that the 

transaction will be submitted to 

clearing, the platform would have no 

duty to report it under proposed Rule 

901(a)(1). 

• Rule 901(c)(7) requires reporting, if 

applicable, of any flags pertaining to the 


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69Under Rule 900(hh), as adopted, the sides are 

counterparties to the security-based swap. Thus, the 

platform would not be one of the sides (except 

possibly in unusual circumstances) and thus could 

not be the reporting side. 

70See Regulation SBSR Adopting Release, 

Section XIII (describing Rule 906(a), as adopted). 

The Commission preliminarily believes that relying 

on the Rule 906(a) process to obtain UIC 

information from both sides to a platform-executed 

security-based swap that will be submitted to 

clearing would not cause counterparties to such 

transactions to incur significant additional costs. 

See Regulation SBSR Adopting Release, Section 

XXII(C)(6)(c) (estimating the costs of complying 

with Rule 906(a), as adopted, for reporting sides). 

As noted above, assigning the reporting duty to the 

platform should minimize the number of reporting 

steps and thus the possibility of data corruption and 

delays in reporting the transaction to a registered 

SDR because a platform will have superior access 

to the economic terms of security-based swaps that 

are executed on its facilities and will be submitted 

to clearing. The Commission further notes that the 

platform could report the branch ID, broker ID, 

execution agent ID, trader ID, and trading desk ID, 

as applicable, as agent for a direct counterparty, if 

the direct counterparty provided this information to 

the platform. See Regulation SBSR Adopting 

Release, Section V(C)(2) (discussing use of agents to 

carry out reporting duties). 

71For a platform to make a security-based swap 

eligible for trading on its facilities, it must display 

a product in specific enough detail for the platform 

participants to reach a meeting of the minds about 

what they are trading. In other words, the platform 

must provide information that identifies the 

security-based swap, the effective date, the 

scheduled termination date, and the terms of any 

standardized fixed or floating rate payments and the 

frequency of such payments. The platform would be 

required to report these elements, or a product ID 

that incorporates these elements, to a registered 

SDR pursuant to Rule 901(c). 

72For a platform to facilitate allocations, 

terminations, novations, or assignments of existing 

security-based swaps, the platform participants 

necessarily must provide a significant amount of 

information to the platform regarding those existing 

security-based swaps. Given that the platform 

participants must provide a significant amount of 

information about the existing transactions to the 

platform, the Commission preliminarily believes 

that the platform participants also could provide 

the platform with the transaction IDs of those 

existing security-based swaps. 

73WMBAA II at 6. 

74 ISDA/SIFMA I at 18. 

75 Id. 

76See supra Section II(C)(2)(d). 

transaction that are specified in the 

policies and procedures of the registered 

SDR to which the transaction will be 

reported. The Commission preliminarily 

believes that, because the transaction 

occurs on the platform’s facilities, the 

platform would have knowledge of any 

circumstances that would require 

application of a flag. 

• Rule 901(d)(1) requires reporting of 

the counterparty ID or the execution 

agent ID of each counterparty, as 

applicable. A platform will know the 

identity of each direct counterparty or 

the execution agent for each direct 

counterparty because those market 

participants will be using the platform’s 

facilities to execute the alpha 

transaction. To the extent that such 

alphas have an indirect counterparty, 

the Commission presumes that the 

platform will be able to obtain this 

information from the participant that is 

a direct counterparty to the alpha. 

• Rule 901(d)(2) requires the 

reporting side to report the branch ID, 

broker ID, execution agent ID, trader ID, 

and trading desk ID ‘‘of the direct 

counterparty on the reporting side.’’ 

Regardless of whether a platform has 

these UICs for the counterparties to a 

security-based swap executed on its 

facilities, the platform would not be the 

reporting side for such a transaction 

because it is not a counterparty to the 

security-based swap.69 Thus, when a 

platform has the duty to report a 

transaction, there is no reporting side, 

and the registered SDR to which the 

platform reports the security-based 

swap would be required to obtain the 

branch ID, broker ID, execution agent 

ID, trader ID, and trading desk ID, as 

applicable, from each direct 

counterparty using the process in Rule 

906(a), as adopted.70

• Rules 901(d)(3) and 901(d)(5) 

require reporting of the terms of any 

fixed or floating rate payments and any 

other elements included in the 

agreement necessary to calculate the 

value of the contract, respectively, but 

only ‘‘[t]o the extent not provided 

pursuant to [Rule 901(c)].’’ The 

Commission believes that all of the 

identifying information would be 

contained in the product ID or 

otherwise available to the platform and 

reported by the platform pursuant to 

Rule 901(c).71 Therefore, the 

Commission preliminarily believes that 

the information required under Rules 

901(d)(3) and 901(d)(5) would be a null 

set for a transaction executed on a 

platform that is submitted to clearing. 

• Rule 901(d)(4) requires reporting of 

the titles and dates of agreements that 

are ‘‘incorporated by reference into the 

security-based swap contract.’’ The 

terms of the alpha security-based swap 

will be established according to the 

rules of the platform and, potentially, 

the rules of the registered clearing 

agency to which the security-based 

swap will be submitted, and likely will 

not be written. Therefore, the 

Commission presumes that there will be 

no agreements incorporated by reference 

to such contracts, and the information 

required under Rule 901(d)(4) would be 

a null set for a transaction executed on 

a platform that will be submitted to 

clearing. 

• Rule 901(d)(7) would apply only if 

the direct counterparties do not intend 

to submit the security-based swap to 

clearing. Rule 901(d)(8) would apply 

only if the transaction is not submitted 

to clearing. Because a platform would be 

required to report a security-based swap 

executed on its facilities only if the 

transaction will be submitted to 

clearing, Rules 901(d)(7) and 901(d)(8) 

would not be applicable. 

• Rule 901(d)(9) requires reporting of 

the platform ID. The platform can 

provide this information. 

• Rule 901(d)(10) would apply only if 

the security-based swap arises from the 

allocation, termination, novation, or 

assignment of one or more existing 

security-based swaps. To the extent that 

platforms facilitate allocations, 

terminations, novations, or assignments 

of existing security-based swaps, the 

platform participants engaging in such 

exercises could provide the platform 

with the transaction IDs of those 

existing security-based swaps,72 which 

the platform would need to report 

pursuant to Rule 901(d)(10). 

Two commenters who raised general 

issues about platforms having the duty 

to report questioned, in particular, a 

platform’s ability to report subsequent 

events affecting the initial alpha 

transaction. One commenter stated that 

‘‘an SB SEF would not be in a position 

or necessarily have the capabilities to 

report life cycle event information.’’ 73

The second commenter noted that ‘‘the 

SB SEF or national securities exchange 

may not itself have access to . . . 

whether the trade has been accepted for 

clearing.’’ 74 This commenter further 

noted that ‘‘the relevant clearing agency 

. . . could report the missing data in 

parallel.’’ 75 The Commission broadly 

agrees with that suggestion and 

therefore is proposing a new 

subparagraph (ii) of Rule 901(e)(1), 

which would require a registered 

clearing agency to report whether or not 

it has accepted a security-based swap 

for clearing. Proposed Rule 901(e)(1)(ii) 

reflects the Commission’s preliminary 

view that the registered clearing 

agency—and not a platform or any other 

person—has the most direct access to 

that information and, therefore, should 

have the duty to report it to the alpha 

SDR.76 Similarly, the Commission 

generally agrees with the first 

commenter that a platform is not in a 

good position to know about life cycle 

events of security-based swaps executed 

on their facilities. However, the 

Commission preliminarily believes that 

the only life cycle event of a platformexecuted security-based swap that will 

be submitted to clearing will be whether 

the security-based swap is accepted for 

clearing. Proposed Rule 901(e)(1)(ii) 

would require the registered clearing 


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77 15 U.S.C. 78mA(a)(3). 

78Rule 907, as adopted, requires a registered SDR 

to establish and maintain written policies and 

procedures to govern various aspects of the 

registered SDR’s operations, including the manner 

and format in which the registered SDR will accept 

data from its participants. 

79Rule 900(u), as adopted, provides that a 

‘‘[p]articipant, with respect to a registered securitybased swap data repository, means a counterparty, 

that meets the criteria of [Rule 908(b)], of a securitybased swap that is reported to that registered 

security-based swap data repository to satisfy an 

obligation under [Rule 901(a)].’’ 

80A registered clearing agency that is required to 

report a clearing transaction pursuant to proposed 

Rule 901(a)(2)(i) would be a counterparty to a 

security-based swap and covered by the first prong 

of the proposed definition of ‘‘participant.’’ 81As noted in Section II(A), supra, because 

clearing of security-based swaps in the United 

States is still evolving, other models of clearing 

might emerge where customers would not become 

direct counterparties of a registered clearing agency. 

agency to report that information, not 

the platform. 

The Commission notes that proposed 

Rule 901(a)(1) would require a platform 

to report a security-based swap only if 

the security-based swap will be 

submitted to clearing. If the platformexecuted transaction will not be 

submitted to clearing, Rule 901(a)(2)(ii), 

as adopted, already requires the 

counterparties to apply the reporting 

hierarchy to determine which side will 

have the duty to report the transaction, 

as well as any life cycle event of that 

transaction. This result is consistent 

with Section 13A(a)(3) of the Exchange 

Act,77 which sets out a reporting 

hierarchy under which one of the 

counterparties, but not a platform, will 

have the duty to report a security-based 

swap that is not accepted by any 

clearing agency. 

3. Additional Amendments To Account 

for Platforms and Registered Clearing 

Agencies Incurring Duties To Report 

Under Rule 901(h), as adopted, ‘‘a 

reporting side’’ must electronically 

transmit the information required by 

Rule 901 in a format required by the 

registered SDR.78 The Commission is 

now proposing to replace the term 

‘‘reporting side’’ in Rule 901(h) with the 

phrase ‘‘person having a duty to report’’ 

because, under the proposed 

amendments to Rule 901(a), platforms 

and registered clearing agencies would 

have duties to report certain transaction 

information, in addition to reporting 

sides. The Commission believes that all 

persons who have a duty to report under 

Regulation SBSR—i.e., platforms, 

registered clearing agencies, and 

reporting sides—should electronically 

transmit the information required by 

Rule 901 in a format required by the 

registered SDR. 

Under Rule 900(u), as adopted, 

platforms and registered clearing 

agencies would not be participants of 

registered SDRs solely as a result of 

reporting security-based swap 

transaction information pursuant to 

proposed Rule 901(a)(1) or 901(e)(1)(ii), 

respectively.79 However, consistent 

with the proposed amendment to Rule 

901(h) described immediately above, the 

Commission believes that platforms and 

registered clearing agencies should be 

participants of any registered SDR to 

which they report security-based swap 

transaction information. Imposing 

participant status on platforms and 

registered clearing agencies would 

explicitly require those entities to report 

security-based swap transaction 

information to a registered SDR in a 

format required by that registered SDR. 

If platforms and registered clearing 

agencies were not participants of the 

registered SDR and were permitted to 

report data in a format of their own 

choosing, it could be difficult or 

impossible for the registered SDR to 

understand individual transaction 

reports or aggregate them with other 

reports in a meaningful way. This could 

adversely affect the ability of the 

Commission and other relevant 

authorities to carry out their oversight 

responsibilities and could interfere with 

the ability of a registered SDR to 

publicly disseminate security-based 

swap transaction information as 

required by Rule 902, as adopted. 

Therefore, the Commission is proposing 

to amend the definition of ‘‘participant’’ 

in Rule 900(u) to mean: (1) A person 

that is a counterparty to a security-based 

swap, provided that the security-based 

swap is subject to regulatory reporting 

under Regulation SBSR and is reported 

to a registered SDR pursuant to 

Regulation SBSR; (2) a platform that is 

required to report a security-based swap 

pursuant to Rule 901(a)(1); or (3) a 

registered clearing agency that is 

required to report a life cycle event 

pursuant to Rule 901(e).80

4. Examples 

The following examples illustrate the 

proposed reporting process for alpha, 

beta, and gamma security-based swaps, 

assuming an agency model of clearing 

under which a non-clearing member 

counterparty becomes a direct 

counterparty to a clearing transaction: 81

• Example 1. A registered securitybased swap dealer enters into a securitybased swap with a private fund. The 

transaction is not executed on a 

platform. The counterparties intend to 

clear the transaction (i.e., the 

transaction is an alpha). Neither side 

has a guarantor with respect to the 

alpha, and both direct counterparties are 

U.S. persons. 

Æ The registered security-based swap 

dealer is the reporting side under Rule 

901(a)(2)(ii), as adopted, and must 

report this alpha transaction to a 

registered SDR (and may choose the 

registered SDR). 

Æ Proposed Rule 901(a)(3) would 

require the registered security-based 

swap dealer, as the reporting side of the 

alpha transaction, to promptly provide 

to the registered clearing agency the 

transaction ID of the alpha and the 

identity of the alpha SDR. 

Æ If the registered clearing agency 

accepts the alpha for clearing and 

terminates the alpha, two clearing 

transactions—a beta (between the 

registered security-based swap dealer 

and the registered clearing agency) and 

a gamma (between the registered 

clearing agency and the private fund)— 

take its place. 

Æ Proposed Rule 901(e)(1)(ii) would 

require the registered clearing agency to 

report to the alpha SDR that it accepted 

the transaction for clearing. 

Æ Under proposed Rule 901(a)(2)(i), 

the registered clearing agency would be 

the reporting side for each of the beta 

and the gamma. Therefore, the 

registered clearing agency would be 

required to report the beta and gamma 

to a registered SDR and could choose 

the registered SDR to which it reports 

the beta and gamma. The report for each 

of the beta and the gamma must include 

the transaction ID of the alpha, as 

required by Rule 901(d)(10), as adopted. 

• Example 2. Same facts as Example 

1, except that the private fund and the 

registered security-based swap dealer 

transact on a SB SEF. 

Æ Proposed Rule 901(a)(1) would 

require the SB SEF to report the alpha 

transaction (and allow the SB SEF to 

choose the registered SDR). 

Æ Upon submission of the alpha for 

clearing, proposed Rule 901(a)(3) would 

require the SB SEF to promptly report 

to the registered clearing agency the 

transaction ID of the alpha and the 

identity of the alpha SDR. 

Æ Once the alpha is submitted to 

clearing, the reporting workflows are the 

same as in Example 1. 

D. Request for Comment 

The Commission requests comment 

on all aspects of the proposed new 

Rules 901(a)(1), 901(a)(2)(i), and 

901(a)(3), as well as the proposed 

amendment to Rule 901(e). 

1. Is the Commission’s discussion of 

how Regulation SBSR—under the 

amendments proposed in this release— 

would apply to different steps or actions 

in the clearing process under the agency 


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model sufficiently clear and complete? 

If not, please provide detail about the 

operation of the agency model of 

clearing (e.g., particular steps or actions 

in the clearing process) that you believe 

the Commission has not adequately 

addressed and how you believe they 

should be treated under Regulation 

SBSR. 

2. Do you believe that the principal 

model of clearing is or is likely to 

become sufficiently prevalent in the 

U.S. market that the Commission should 

address how Regulation SBSR would 

apply to different steps in the clearing 

process under the principal model? If 

so, do you think that further guidance 

is necessary to apply Regulation SBSR 

effectively to the principal model? What 

aspects of the principal model should 

the Commission focus on for purposes 

of providing further guidance? 

3. At the time that a security-based 

swap is accepted for clearing, will any 

person other than the registered clearing 

agency have complete information about 

the beta and the gamma that result from 

clearing? 

4. Do you agree with the 

Commission’s preliminary assessment 

of the data elements under Rules 901(c) 

and 901(d) that will be available to a 

platform and required to be reported for 

a platform-executed security-based 

swap that will be submitted to clearing? 

If not, what information would the 

platform find difficult to obtain? For 

example, could a platform reasonably be 

expected to know of guarantors of direct 

counterparties transacting on its 

facilities (if the guarantors are clearing 

members who guarantee platform 

participants who are not themselves 

direct members of the clearing agency)? 

5. If the Commission were to adopt 

the basic requirement that a platform 

must report transactions executed on its 

facilities that are submitted to clearing 

but, as discussed above, would not 

require the platform to report certain 

data elements in Rule 901(c) or 901(d), 

what data elements should be excepted? 

Can you suggest an alternate 

mechanism—besides requiring the 

platform to report—for such data 

elements to be reported to the registered 

SDR? 

6. Would a platform have knowledge 

of any special circumstances of a 

transaction executed on its facilities that 

might have to be flagged pursuant to the 

policies and procedures of the registered 

SDR to which the platform reports the 

transaction? Are there any special 

circumstances that it would be difficult 

or impossible for a platform to know? If 

so, please discuss and suggest how the 

transaction could be appropriately 

flagged if the platform does not do so. 

7. Are there any potential life cycle 

events of a platform-executed securitybased swap that will be submitted to 

clearing, other than acceptance or 

rejection from clearing? If so, what are 

they and who do you think should have 

the duty of reporting such life cycle 

events to a registered SDR? Why? 

8. What costs might platforms incur to 

report security-based swap transactions 

pursuant to proposed Rule 901(a)(1)? 

Could other market participants report 

these transactions more efficiently or 

cost effectively? 

9. Would a registered clearing agency 

have the information necessary to report 

a platform-executed alpha that will be 

submitted to clearing? If so, should the 

registered clearing agency, rather than 

the platform, be required to report the 

transaction? Why or why not? How long 

does it typically take between the 

execution of a security-based swap on a 

platform and submission to clearing? 

How long does it typically take between 

submission to clearing and when the 

registered clearing agency determines 

whether to accept or reject the 

transaction? 

10. Rule 901(d)(2), as adopted, 

requires the reporting side to report— 

‘‘as applicable’’—the branch ID, broker 

ID, execution agent ID, trader ID, and 

trading desk ID with respect to the 

direct counterparty on the reporting 

side. As described above, the 

Commission is proposing that the 

registered clearing agency would be the 

reporting side for all clearing 

transactions to which it is a 

counterparty. Would the branch ID, 

broker ID, execution agent ID, trader ID, 

or trading desk ID ever be applicable to 

a registered clearing agency? Why or 

why not? 

11. Rule 906(a), as adopted, provides 

a mechanism for a registered SDR to 

obtain the branch ID, broker ID, 

execution agent ID, trading ID, and 

trading desk ID—‘‘as applicable’’—for 

the non-reporting side of a securitybased swap. Thus, mechanisms exist 

under Regulation SBSR, as adopted, for 

the Commission to learn the UICs, as 

applicable, for both sides of the alpha 

transaction. Would these UICs be 

applicable to the non-clearing agency 

side of a clearing transaction? Why or 

why not? If not, do you believe that the 

Commission should provide guidance 

that there is no requirement under Rule 

906(a) to report the UICs for the nonclearing agency counterparty of a 

clearing transaction? 

12. Will registered clearing agencies 

be able to leverage existing reporting 

processes to report data to registered 

SDRs? What additional reporting 

processes might registered clearing 

agencies need to develop to ensure 

accurate reporting in accordance with 

the proposed amendments to Rule 901? 

What costs might registered clearing 

agencies incur to adopt these processes? 

13. Would other market participants 

be able to report clearing transactions or 

terminations of transactions submitted 

to clearing more efficiently or cost 

effectively than the registered clearing 

agency? What costs might 

counterparties incur if one of the sides 

of the alpha were assigned the duty to 

report a clearing transaction rather than 

the registered clearing agency? 

14. Should the proposed reporting 

requirements for registered clearing 

agencies apply only to registered 

clearing agencies having their principal 

place of business in the United States 

rather than to all registered clearing 

agencies (which could include 

registered clearing agencies having their 

principal place of business outside the 

United States)? Why or why not? Would 

U.S. persons, registered security-based 

swap dealers, and registered major 

security-based swap participants be in a 

better position to report transactions 

with non-U.S. person registered clearing 

agencies? Why or why not? 

15. Under proposed Rule 901(e)(1)(ii), 

a registered clearing agency would be 

required to report whether or not it has 

accepted a security-based swap for 

clearing. Should this information be 

required to be reported to the same 

registered SDR that receives the 

transaction report of the alpha? If not, 

how would the Commission and other 

relevant authorities be able to ascertain 

whether or not the alpha had been 

cleared? If so, what costs would be 

imposed on registered clearing agencies 

for having to report this transaction 

information to a registered SDR not of 

their choosing? 

16. Is it appropriate to require a 

registered clearing agency to become a 

participant of the alpha SDR solely as a 

result of reporting whether or not it has 

accepted an alpha for clearing? What 

costs would be imposed on registered 

clearing agencies as a result of this 

requirement? If a registered clearing 

agency did not become a participant of 

the alpha SDR solely by virtue of 

reporting the disposition of an alpha, in 

what other way should the registered 

clearing agency be required to report the 

disposition of an alpha such that the 

systems of the alpha SDR can accept 

and understand that report? 

17. What costs might platforms and 

reporting sides incur to comply with 

proposed Rule 901(a)(3), which would 

require the person with the duty to 

report a security-based swap that has 

been submitted to clearing at a 


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82See Regulation SBSR Adopting Release, 

Section VIII. The Commission recognizes that 

market participants may use a variety of other terms 

to refer to such transactions, including ‘‘blocks,’’ 

‘‘parent/child’’ transactions, and ‘‘splits.’’ The 

Commission has determined to use a single term, 

‘‘bunched orders,’’ for purposes of this release, as 

this appears to be a widely accepted term. See, e.g., 

‘‘Bunched orders challenge SEFs,’’ MarketsMedia 

(March 25, 2014), available at http://

marketsmedia.com/bunched-orders-challenge-sefs/, 

(last visited September 22, 2014); ‘‘Cleared bunched 

trades could become mandatory rule,’’ Futures and 

Options World (October 31, 2013), available at 

http://www.fow.com/3273356/Cleared-bunchedtrades-could-become-mandatory-rule.html,(last 

visited September 22, 2014). 

83 In aggregate, the notional amount of the 

security-based swaps that result from the allocation 

is the same as the notional amount of the executed 

bunched order. 

84Regulation SBSR Adopting Release, Section 

VIII. 

85As noted in Section II(A), supra, the agency 

model of clearing predominates in the United 

States. 

86See Regulation SBSR Adopting Release, 

Section VIII(A). 

87See ISDA IV at 10 (recommending that bunched 

order executions be subject to public dissemination 

instead of the transactions resulting from the 

allocation). 

registered clearing agency to promptly 

provide that registered clearing agency 

with the transaction ID of the submitted 

security-based swap and the identity of 

the alpha SDR? Is there a more efficient 

way of ensuring that registered clearing 

agencies know the transaction ID of the 

alpha and the identity of the alpha SDR? 

If so, please discuss. 

18. Should platforms and registered 

clearing agencies be participants of the 

registered SDRs to which they report? If 

not, how would a registered SDR ensure 

that these persons provide data in a 

format required by the registered SDR? 

19. How might the policies and 

procedures of a registered SDR address 

the circumstance where the registered 

SDR receives a termination report of an 

alpha pursuant to proposed Rule 

901(e)(1)(ii) before it receives the initial 

report of the alpha? What costs would 

registered SDRs incur to implement 

policies and procedures addressing this 

scenario? 

20. Can anonymous trading occur on 

any other type of trading venue besides 

a platform? If so, please describe where 

and how such activity occurs and 

provide your view as to how Regulation 

SBSR should, if necessary, be amended 

to require reporting of such transactions. 

III. Reporting and Public Dissemination 

of Security-Based Swaps Involving 

Allocation 

The Regulation SBSR Adopting 

Release provides guidance for the 

reporting of certain security-based 

swaps executed by an asset manager on 

behalf of multiple clients—transactions 

involving what are sometimes referred 

to as ‘‘bunched orders.’’ 82 Specifically, 

the Regulation SBSR Adopting Release 

explains how Regulation SBSR applies 

to executed bunched orders that are 

reported pursuant to the reporting 

hierarchy in Rule 901(a)(2)(ii), as 

adopted, including bunched order 

alphas. That release also explains how 

Regulation SBSR applies to the securitybased swaps that result from allocation 

of that executed bunched order, if the 

resulting security-based swaps are 

uncleared. This section explains how 

the Commission preliminarily believes 

Regulation SBSR, as adopted and as 

proposed to be amended by this release, 

would apply to a platform-executed 

bunched order that will be submitted to 

clearing, and the security-based swaps 

that result from the allocation of any 

bunched order execution, if the 

resulting security-based swaps are 

cleared. 

As described in the Regulation SBSR 

Adopting Release, to execute a bunched 

order, an asset manager negotiates and 

executes a security-based swap with a 

counterparty, typically a security-based 

swap dealer, on behalf of multiple 

clients. The bunched order could be 

executed on- or off-platform. After 

execution of the bunched order, the 

asset manager would allocate a 

fractional amount of the aggregate 

notional amount of the transaction to 

each of several clients, thereby creating 

several new security-based swaps and 

terminating the bunched order 

execution.83 By executing a bunched 

order, the asset manager avoids having 

to negotiate the client-level transactions 

individually, and obtains exposure for 

each client on the same terms (except, 

perhaps, for size). 

In the Regulation SBSR Adopting 

Release, the Commission explained that 

a bunched order execution and the 

security-based swaps resulting from the 

allocation of the bunched order 

execution, if they are not cleared, must 

be reported like other security-based 

swaps. Regulation SBSR provides that 

the registered SDR to which the initial 

bunched order execution is reported 

must disseminate a report of the 

bunched order execution, including the 

full notional amount of the transaction. 

The Commission observed that publicly 

disseminating bunched order executions 

in this manner would allow the public 

to ‘‘know the full size of the bunched 

order execution and that this size was 

negotiated at a single price.’’ 84 Rule 

902(c)(7), as adopted, provides that the 

registered SDR shall not publicly 

disseminate any information regarding 

the allocation of a bunched order 

execution, which would include the 

smaller security-based swaps resulting 

from the allocation of the initial 

transaction as well as the fact that the 

initial transaction is terminated 

following this allocation. 

A. Examples 

The following examples illustrate 

how Regulation SBSR would apply to 

platform-executed bunched order 

alphas, and security-based swaps that 

result from allocation of bunched order 

alphas, if the resulting security-based 

swaps are cleared. The examples specify 

which actions are addressed by 

Regulation SBSR, as adopted, and 

which actions would be addressed by 

the new provisions of Regulation SBSR 

that are being proposed in this release. 

The Commission notes that the 

proposed amendments to Rule 901(a) 

and the conforming changes discussed 

in Section II, supra, would not affect the 

examples describing the reporting of 

bunched orders and the security-based 

swaps that result from their allocation 

that the Commission provided in the 

Regulation SBSR Adopting Release. 

Furthermore, the examples assume that 

the bunched order alpha would be 

cleared using the agency model of 

clearing.85 In the case of a bunched 

order alpha, the final placement of risk 

will take the form of clearing 

transactions between: (1) The client 

accounts of the asset manager and the 

registered clearing agency that clears the 

bunched order alpha; and (2) the 

registered security-based swap dealer 

and the registered clearing agency. 

The Commission understands that 

market participants may use a variety of 

workflows for allocating a bunched 

order alpha. Regulation SBSR, as 

adopted, provides that, regardless of the 

workflow employed, a bunched order 

alpha that is executed off-platform shall 

be reported and publicly disseminated 

as a single transaction, showing the full 

notional amount.86 The proposed 

interpretation discussed below would 

take the same approach to bunched 

order alphas that are executed on a 

platform. Regulation SBSR, as adopted, 

further provides that the security-based 

swaps that result from allocation of a 

bunched order execution are subject to 

regulatory reporting but not public 

dissemination, if these resulting 

security-based swaps are uncleared. The 

proposed interpretation discussed 

below would take the same approach to 

cleared security-based swaps that result 

from the allocation of a bunched order 

alpha.87


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88Pursuant to Rule 906(a), as adopted, the 

registered SDR also would be required to obtain any 

missing UICs from the counterparties. 

89Like other clearing transactions that arise from 

the acceptance of a security-based swap for 

clearing, these security-based swaps would not be 

subject to public dissemination. See Rule 902(c)(6). 

See also Rule 902(c)(7) (exempting from public 

dissemination any ‘‘information regarding the 

allocation of a security-based swap’’); Regulation 

SBSR Adopting Release, Section VI(D)(1) 

(describing final Rule 902(c)(7)). 

90See supra Section II(C)(1) (explaining the 

reporting process for clearing transactions). 

91See Rule 901(d)(1) (requiring reporting of the 

counterparty ID ‘‘or the execution agent ID of each 

counterparty, if applicable’’). If the counterparties— 

i.e., the specific accounts who will receive 

allocations—are not yet known, the requirement to 

report the execution agent ID instead of the 

counterparty ID would apply. Similarly, if the asset 

manager uses an execution agent to access the 

platform, the platform would report the identity of 

the asset manager’s execution agent. 

1. Example 1: Off-Platform Cleared 

Transaction 

Assume that an asset manager, acting 

on behalf of several advised accounts, 

executes a bunched order alpha with a 

registered security-based swap dealer. 

The execution does not occur on a 

platform, and there are no indirect 

counterparties on either side of the 

bunched order alpha. The transaction is 

submitted to a registered clearing 

agency. 

a. Reporting the Bunched Order Alpha 

The reporting hierarchy of Rule 

901(a)(2)(ii), as adopted, applies to the 

bunched order alpha because the 

execution does not occur on a platform 

and the bunched order alpha is not a 

clearing transaction. Under Rule 

901(a)(2)(ii)(B), as adopted, the 

registered security-based swap dealer is 

the reporting side for the bunched order 

alpha because its side includes the only 

registered security-based swap dealer. 

As the reporting side, the registered 

security-based swap dealer must report 

the primary and secondary trade 

information for the bunched order alpha 

to a registered SDR (the ‘‘alpha SDR’’) of 

its choice within 24 hours after the time 

of execution. Rule 902(a), as adopted, 

requires the alpha SDR to publicly 

disseminate a transaction report of the 

bunched order alpha immediately upon 

receiving the report from the registered 

security-based swap dealer.88

When the registered security-based 

swap dealer submits the bunched order 

alpha to a registered clearing agency for 

clearing, proposed Rule 901(a)(3) would 

require the registered security-based 

swap dealer promptly to provide the 

registered clearing agency with the 

transaction ID of the bunched order 

alpha and the identity of the alpha SDR. 

This requirement would facilitate the 

registered clearing agency’s ability to 

report whether or not it accepts the 

bunched order alpha for clearing 

pursuant to proposed Rule 901(e)(1)(ii). 

b. Reporting the Security-Based Swaps 

Resulting From Allocation 

Proposed Rule 901(a)(2)(i) would 

require the registered clearing agency to 

report all clearing transactions that arise 

as a result of clearing the bunched order 

alpha, regardless of the workflows used 

to clear the bunched order alpha.89

If the asset manager provides 

allocation instructions prior to or 

contemporaneous with the clearing of 

the bunched order alpha, clearing could 

result in the creation of a beta (i.e., the 

clearing transaction between the 

registered clearing agency and the 

security-based swap dealer) and a 

‘‘gamma series’’ (i.e., the gammas 

between the registered clearing agency 

and each of the client funds selected by 

the asset manager to receive a portion of 

the initial notional amount). The beta 

and each security-based swap that 

comprises the gamma series would not 

be treated differently under Regulation 

SBSR than any other clearing 

transactions.90

If the asset manager does not provide 

allocation instructions until after the 

bunched order alpha is cleared, clearing 

could result in the creation of a beta 

(i.e., the clearing transaction between 

the registered clearing agency and the 

security-based swap dealer) and an 

‘‘intermediate gamma’’ (i.e., the clearing 

transaction between the clearing agency 

and the side representing the clients of 

the asset manager). The beta would be 

the same—and would be treated the 

same—as any other clearing transaction, 

while the intermediate gamma would 

continue to exist until the registered 

clearing agency receives the allocation 

information, which could come from the 

asset manager or its clearing member 

and would allow for the creation of the 

gamma series. As the registered clearing 

agency receives the allocation 

information, it would terminate the 

intermediate gamma and create new 

security-based swaps as part of the 

gamma series. The partial terminations 

of the intermediate gamma would be life 

cycle events of the intermediate gamma 

that the registered clearing agency must 

report under Rule 901(e)(1)(i), as 

adopted. Rule 901(e)(2), as adopted, 

would require the registered clearing 

agency to report these life cycle events 

to the same registered SDR to which it 

reported the intermediate gamma. 

Under proposed Rule 901(a)(2)(i), the 

registered clearing agency also would be 

required to report to a registered SDR 

each new security-based swap 

comprising part of the gamma series. 

Because these security-based swaps 

arise from the termination (or partial 

termination) of an existing securitybased swap (i.e., the gamma series), Rule 

901(d)(10), as adopted, requires the 

registered clearing agency to link each 

new transaction in the gamma series to 

the intermediate gamma by including 

the transaction ID of the intermediate 

gamma as part of the report of each new 

security-based swap in the gamma 

series. 

2. Example 2: Cleared Platform 

Transaction 

Assume the same facts as Example 1, 

except that the registered security-based 

swap dealer and asset manager execute 

the bunched order alpha on a SB SEF. 

a. Reporting the Bunched Order Alpha 

Because the initial transaction is 

executed on a platform and will be 

submitted to clearing, the platform 

would have the duty, under proposed 

Rule 901(a)(1), to report the bunched 

order alpha to a registered SDR. To 

satisfy this reporting obligation, the 

platform would be required to provide 

all of the applicable information 

required by proposed Rule 901(a)(1). 

Commission staff understands from 

discussions with market participants 

that, even if the platform does not know 

and thus cannot report the counterparty 

IDs of each account that will receive an 

allocation, the platform would know the 

identity of the execution agent who 

executed the bunched order alpha on 

behalf of its advised accounts. The 

platform, therefore, could report the 

execution agent ID of the execution 

agent, even though it might not know 

the intended counterparties of the 

security-based swaps that will result 

from the allocation.91 Rule 902(a), as 

adopted, requires the registered SDR 

that receives the report of the bunched 

order alpha from the platform to 

publicly disseminate a report of the 

bunched order alpha. Then, pursuant to 

Rule 906(a), as adopted, the registered 

SDR would be required to obtain any 

missing UICs from its participants. 

b. Reporting the Security-Based Swaps 

Resulting From Allocation 

If the asset manager provides 

allocation instructions prior to or 

contemporaneous with the clearing of 

the bunched order alpha, clearing 

would (under the agency model of 

clearing) result in the creation of a beta 

(i.e., the clearing transaction between 

the registered clearing agency and the 

registered security-based swap dealer) 


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92See supra Section II(C)(1) (explaining the 

reporting process for clearing transactions). 

93See The Financial Markets Lawyers Group, 

CFTC No-Action Letter No. 12–53 at 2–3 (December 

17, 2012) (‘‘CFTC NAL No. 12–53’’); Division of 

Swap Dealer and Intermediary Oversight, CFTC NoAction Letter at 3–4 (April 30, 2013) (‘‘CFTC NAL 

No. 13–11’’). These no-action letters describe the 

CFTC’s understanding of prime brokerage 

arrangements in the swap market. It is the 

Commission’s understanding that prime brokerage 

arrangements in the security-based swap market are 

similar to those in the swap market. 

94For purposes of this release, the Commission 

assumes that both the prime broker and the 

executing dealer would be registered security-based 

swap dealers. 

95The agreement between the customer and the 

executing dealer would constitute a contract for the 

sale of a security for purposes of the federal 

securities laws. See Securities Offering Reform, 

Securities Act Release No. 33–8591 (July 19, 2005), 

70 FR 44722, 44767 (August 3, 2005) (discussing 

the determination of the time of sale with respect 

to a contract of sale for securities and noting that 

‘‘a contract of sale under the federal securities laws 

can occur before there is an unconditional bilateral 

contract under state law’’). 

96See ISDA, 2005 Master Give-Up Agreement 

(providing standard terms that market participants 

can use to document prime brokerage 

arrangements). See also CFTC NAL No. 12–53, 

supra note 93, at 2–3 (describing a typical prime 

brokerage arrangement in the swap market). 

97See CFTC NAL No. 12–53, supra note 93, at 2– 

3; CFTC NAL No. 13–11, supra note 93, at 3–4 

(describing typical prime brokerage arrangements in 

the swap market). 

and a ‘‘gamma series’’ (i.e., the gammas 

between the clearing agency and each of 

the asset manager’s clients). The beta 

and each security-based swap that 

comprises the gamma series would be 

no different—and would not be treated 

differently under Regulation SBSR— 

from other clearing transactions.92

If the asset manager does not provide 

allocation instructions until after the 

bunched order alpha is cleared, clearing 

(under the agency model) would result 

in the creation of a beta (between the 

registered clearing agency and the 

security-based swap dealer) and an 

intermediate gamma (between the 

registered clearing agency and the side 

representing the clients of the asset 

manager). The registered clearing 

agency would then be required to report 

the termination of the bunched order 

alpha and the creation of the beta and 

intermediate gamma, pursuant to 

proposed Rules 901(e)(1)(ii) and 

901(a)(2)(i), respectively. From this 

point on, the beta would be treated the 

same as any other clearing transaction, 

while the intermediate gamma would be 

decremented and replaced by the 

gamma series, as described in Example 

1. 

B. Request for Comment 

The Commission requests comment 

on all aspects of its preliminary views 

regarding how the proposed 

amendments to Regulation SBSR would 

apply to various allocation scenarios 

involving cleared security-based swaps. 

21. Is the Commission’s discussion of 

how Regulation SBSR—under the 

amendments proposed in this release— 

would apply to different steps in the 

process for reporting the betas and 

gammas that result from clearing a 

bunched order alpha sufficiently clear 

and complete? If not, please provide 

detail about particular steps that you 

believe the Commission has not 

adequately addressed and how you 

believe they should be treated under 

Regulation SBSR. 

22. Are there additional processes or 

workflows related to the clearing of 

bunched order alphas for which market 

participants need guidance? If so, please 

describe these situations and your 

recommendation for how Regulation 

SBSR should address them. 

23. Do asset managers identify the 

clients that will receive allocations from 

a bunched order alpha before the 

bunched order alpha is submitted to 

clearing? If so, when is allocation of the 

bunched order alpha complete? If the 

bunched order alpha is allocated prior 

to clearing, would the information 

provided to the registered clearing 

agency allow the registered clearing 

agency to recognize that it is clearing a 

bunched order alpha? If a registered 

clearing agency is unable to recognize 

that it is clearing a bunched order alpha, 

would the registered clearing agency be 

able to fulfill its reporting duties under 

the proposed amendments to Regulation 

SBSR? 

IV. Reporting and Public Dissemination 

of Prime Brokerage Transactions 

Commission staff understands from 

discussions with market participants 

that, under a prime brokerage 

arrangement, a customer of a prime 

broker will negotiate and agree to the 

economic terms of a security-based 

swap with a registered security-based 

swap dealer (the ‘‘executing dealer’’) but 

both the customer and the executing 

dealer ultimately will face the prime 

broker, rather than each other.93 Before 

negotiating with one or more executing 

dealers, the customer will first enter 

into a prime brokerage arrangement 

with a prime broker.94 The terms of this 

arrangement typically will, among other 

things, set out the types of transactions 

eligible for prime brokerage treatment, 

enumerate the executing dealers with 

whom the customer may negotiate, and 

establish terms for the credit support 

and other transaction-related services 

provided by the prime broker to the 

customer. A prime brokerage 

arrangement allows a customer to 

negotiate transactions with a range of 

executing dealers without having to 

negotiate credit documentation with 

each dealer individually. This is 

because both the customer and the 

executing dealer know that the 

transaction between them will be 

replaced by separate transactions 

between each of them and the prime 

broker, thus obviating the need for 

credit documentation between the two 

original counterparties.95

Through the prime brokerage 

arrangement, the prime broker permits 

the customer to negotiate and agree to 

the terms of security-based swaps with 

approved executing dealers, subject to 

specified limits and parameters.96 If the 

terms of the transaction agreed to by the 

customer and the executing dealer are 

within those parameters, the prime 

broker would replace the initial 

transaction between the customer and 

the executing dealer with two separate 

transactions—one between the prime 

broker and the customer and the second 

between the prime broker and the 

executing dealer—having substantially 

the same terms as the original 

transaction between the customer and 

the executing dealer. Thus, a prime 

brokerage arrangement in the securitybased swap market typically results in 

the following three transactions: 

• Transaction 1. The customer and 

the executing dealer negotiate and agree 

to the terms of a security-based swap 

transaction (the ‘‘customer/executing 

dealer transaction’’) and notify the 

prime broker of these terms. 

• Transaction 2. The prime broker 

will accept the transaction and face the 

executing dealer in a security-based 

swap with the same economic terms 

agreed to by the executing dealer and 

the customer, if the terms are within the 

parameters established by the prime 

brokerage arrangement (the ‘‘prime 

broker/executing dealer transaction’’). 

• Transaction 3. Upon executing the 

security-based swap with the executing 

dealer, the prime broker will enter into 

an offsetting security-based swap with 

the customer (the ‘‘prime broker/

customer transaction’’).97

A. Application of Regulation SBSR as 

Adopted to Prime Brokerage 

Transactions 

The Commission understands that 

prime brokerage arrangements involve 

credit intermediation offered by the 

prime broker, rather than a registered 

clearing agency. Thus, prime brokerage 

transactions are not cleared. Therefore, 

Rule 901(a)(2)(ii), as adopted, assigns 

the reporting duty for Transaction 1, 


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98 If the prime broker determines that Transaction 

1 does not meet the terms of the prime brokerage 

arrangement, the executing dealer also would be 

required to report this fact to the registered SDR to 

which it reported the transaction initially pursuant 

to Rule 901(e)(2), as adopted. Rule 901(e)(2) 

requires, in relevant part, reporting a life cycle 

event to the entity to which the original securitybased swap was reported. Pursuant to commonly 

used industry documentation for prime brokerage 

trades, the rejection by the prime broker could 

cause the initial transaction to be void or, in some 

cases, the customer and executing dealer could 

agree to revise their initial agreement and preserve 

their contract without the involvement of the prime 

broker. See ISDA, 2005 ISDA Compensation 

Agreement, at Section 2. In either case, a life cycle 

event of Transaction 1 would result, because the 

terms of Transaction 1 would change. 

99 If, however, both sides of Transaction 3 include 

a registered security-based swap dealer, the sides 

would be required to select the reporting side. One 

commenter recommended that, in accordance with 

current industry practice under the CFTC rules, 

Regulation SBSR assign the reporting duty for the 

prime broker/executing broker transaction 

(Transaction 2) to the executing broker, and 

responsibility for reporting the prime broker/client 

transaction (Transaction 3) to the prime broker. See 

ISDA IV at 5. Under the application of the rules as 

adopted, as just discussed, if both sides of the prime 

broker/executing broker transaction include a 

registered security-based swap dealer, the sides are 

required to choose who has the reporting duty and 

can choose the executing broker. Likewise, with 

respect to the prime broker/client transaction, it is 

likely that the prime broker is the only registered 

security-based swap dealer involved in the 

transaction, and thus application of the reporting 

hierarchy would result in the side with the prime 

broker being the reporting side. 100See Section 13(m)(1)(G) of the Exchange Act, 

15 U.S.C. 78m(m)(1)(G). 101See ISDA IV at 13. 

102See Regulation SBSR Adopting Release, 

Section VII(G). 

because Transaction 1 is not a clearing 

transaction. 

If the prime broker determines that 

Transaction 1 meets the terms of the 

prime brokerage arrangement, the prime 

broker would initiate Transactions 2 

and 3, which would have the effect of 

terminating Transaction 1. The 

termination would be a life cycle event 

of Transaction 1, and the reporting side 

for Transaction 1 (likely the executing 

dealer) would be required by Rule 

901(e)(i), as adopted, to report the life 

cycle event to the same SDR to which 

it reported the transaction initially.98 If 

the reporting side for Transaction1 did 

not report whether Transaction 1 was 

terminated, the Commission and market 

observers might incorrectly conclude 

that the counterparties to Transaction 1 

(the customer and executing dealer) 

continue to have exposure to each other. 

Transactions 2 and 3 (i.e., the prime 

broker/executing dealer transaction and 

the prime broker/customer transaction, 

respectively) also are security-based 

swaps that must be reported pursuant to 

Rule 901(a)(2)(ii), as adopted. Because 

both sides of Transaction 2 likely 

include a registered security-based swap 

dealer, the sides are required to select 

the reporting side. In the case of 

Transaction 3, however, the prime 

broker is likely to be the only registered 

security-based swap dealer involved in 

the transaction, in which case the prime 

broker would be the reporting side.99

Furthermore, because each of these 

transactions is a security-based swap 

that arises from the termination of 

another security-based swap (i.e., the 

Transaction 1), Rule 901(d)(10), as 

adopted, requires the reporting of 

Transaction 1’s transaction ID as part of 

the secondary trade information for both 

Transaction 2 and Transaction 3. As the 

Commission stated in the Regulation 

SBSR Adopting Release, Rule 901(d)(10) 

is designed to ensure that the 

Commission and other relevant 

authorities have an accurate picture of 

counterparty exposures. In the case of 

prime brokerage transactions, Rule 

901(d)(10) should enable the 

Commission and other relevant 

authorities to link the three prime 

brokerage transactions together for 

surveillance purposes and to identify 

the parties that ultimately assume the 

risks of these transactions. 

Rule 902(a), as adopted, requires 

public dissemination of each securitybased swap, unless it falls within a 

category enumerated in Rule 902(c). 

Each prime brokerage transaction (i.e., 

the customer/executing dealer 

transaction, the prime broker/executing 

dealer transaction, and the prime 

broker/customer transaction) is subject 

to Rule 902(a). The statutory provisions 

relating to the reporting of securitybased swap transactions state that 

‘‘each’’ security-based swap shall be 

reported; these statutory provisions do 

not by their terms limit the reporting 

requirement to transactions having 

particular characteristics,100 and Rule 

902(c), as adopted, does not contain an 

exclusion from public dissemination for 

prime brokerage transactions. 

One commenter requested that the 

Commission exempt the prime broker/

customer leg of a prime broker 

transaction from public dissemination, 

stating its belief that dissemination of 

this transaction would not increase 

price transparency, and a concern that 

dissemination of this transaction may 

confuse the market and undermine the 

value of the data made public.101 The 

Commission believes that publicly 

disseminating reports of prime 

brokerage transactions could provide 

market observers with useful 

information about the cost of the prime 

broker’s credit intermediation services, 

because prime brokers may charge for 

these services by pricing Transaction 2 

or 3 differently than Transaction 1. This 

differentiates Transactions 2 and 3 from 

clearing transactions that are excepted 

from public dissemination under Rule 

902(c)(6), because a registered clearing 

agency is compensated for its credit 

intermediation services through clearing 

fees that are publicly disclosed. With 

prime brokerage transactions, however, 

the only mechanism for ascertaining the 

charge for the credit intermediation 

service offered by the prime broker 

would be to compare the prices of 

Transaction 1 with the prices of the two 

subsequent transactions. Thus, market 

observers could discern useful 

information by comparing reports of the 

related prime brokerage transactions, 

and the Commission does not believe at 

this time that an exception from public 

dissemination is warranted for any 

prime brokerage transactions. If a report 

of each prime brokerage transaction is 

publicly disseminated, price discovery 

would be enhanced. The published 

transaction reports would be required to 

consist of all the information reported 

pursuant to Rule 901(c), as adopted, 

plus any condition flags required by the 

registered SDR’s policies and 

procedures, such as a flag indicating 

that the three transactions are related. 

Rule 907(a)(4), as adopted, requires 

each registered SDR to establish and 

maintain written policies and 

procedures for, among other things, 

establishing flags to denote special 

characteristics of a security-based swap, 

or special circumstances associated with 

the execution or reporting of a securitybased swap. Rules 907(a)(4)(i) and (ii) 

require the registered SDR to identify 

those characteristics or circumstances 

that could, in the fair and reasonable 

estimation of the registered SDR, cause 

a person without knowledge of those 

characteristic(s) or circumstance(s), to 

receive a distorted view of the market 

and establish flags to denote such 

characteristic(s) or circumstance(s). In 

the Regulation SBSR Adopting Release, 

the Commission noted several 

conditions that registered SDRs 

generally should consider including in 

their list of condition flags.102 The fact 

that all three transactions in a prime 

brokerage arrangement are related, the 

Commission generally believes, is a 

special circumstance of the type that 

registered SDRs should consider in 

developing the condition flags required 

by Rule 907(a)(4). Absent such flags, 

market observers might interpret the 

three transaction reports as three 

separate pricing events and incorrectly 

infer the existence of more market 


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103One commenter requested that Regulation 

SBSR specify that the time of execution for the 

prime broker/executing dealer transaction is the 

time of commitment to economic terms with the 

prime broker’s client, and that for the prime broker/ 

customer transaction, the prime broker may use the 

time of acceptance as the time of execution for 

reporting purposes. See ISDA IV at 9. The 

Commission notes that the time of execution for all 

security-based swaps is defined in Rule 900(ii), as 

adopted, as the point at which the counterparties 

to a security-based swap become irrevocably bound 

under applicable law. See Regulation SBSR 

Adopting Release, Section II(A)(2)(c). The 

Commission sees no reason at this time to have a 

different standard for prime brokerage transactions. 

104See Rule 901(a)(2)(ii)(B) (‘‘If only one side of 

the security-based swap includes a registered 

security-based swap dealer, that side shall be the 

reporting side’’). 

105 If the executing dealer is the reporting side for 

both Transaction 1 and Transaction 2, the executing 

dealer will know the transaction ID of Transaction 

1 and can include it in the report of Transaction 2. 

However, if the prime broker is the reporting side 

for Transaction 2, the Commission anticipates that 

the prime broker will obtain from the executing 

dealer the transaction ID of Transaction 1, along 

with all of the other information regarding 

Transaction 1 that will permit the prime broker to 

determine whether to accept Transaction 1. 

106See Rule 901(a)(2)(ii)(B) (‘‘If only one side of 

the security-based swap includes a registered 

security-based swap dealer, that side shall be the 

reporting side’’). 

107The Commission anticipates that the prime 

broker (the reporting side for Transaction 3) will 

obtain the transaction ID of Transaction 1 from the 

executing dealer. See supra note 104 and associated 

text. 

activity than actually exists, which 

could distort their view of the market. 

B. Example of Application of the 

Adopted Rules 

The following example explains how 

Regulation SBSR, as adopted, would 

apply to the steps in a prime brokerage 

transaction described above. For 

purposes of this example, assume that 

the customer is a private fund and both 

the executing dealer and the prime 

broker are registered security-based 

swap dealers.103

Transaction 1: The Customer/Executing 

Dealer Transaction 

• The executing dealer would be the 

reporting side under Rule 901(a)(2)(ii) 

and would be required to report the 

customer/executing dealer transaction 

(Transaction 1) to a registered SDR.104

• The executing dealer would have 

up to 24 hours after the time of 

execution to report to the registered SDR 

the applicable primary and secondary 

trade information of Transaction 1. 

• Immediately upon receiving the 

report of Transaction 1, the registered 

SDR would be required to publicly 

disseminate a transaction report with all 

the information required by Rule 902(a). 

• When the customer and the 

executing dealer agree to the terms of 

Transaction 1, each party would 

typically report the terms to the prime 

broker. The Commission understands 

that, if the terms of Transaction 1 fall 

within the prime brokerage 

arrangement, the prime broker would be 

obligated to face the executing dealer 

with substantially the same terms 

agreed upon by the customer and the 

executing dealer in Transaction 1. 

• If the prime broker determines that 

Transaction 1 meets the terms of the 

prime brokerage arrangement and 

accepts the transaction, Transaction 1 

would terminate. The executing dealer, 

as the reporting side for Transaction 1, 

would be required to report this life 

cycle event pursuant to Rule 901(e), as 

adopted, to the same registered SDR that 

received the initial report of Transaction 

1. Immediately upon receiving this 

report, the registered SDR would be 

required to publicly disseminate the 

termination information. 

• If the prime broker does not accept 

the terms agreed to by the customer and 

executing dealer, the executing dealer, 

in its capacity as reporting side for 

Transaction 1, would notify the 

registered SDR that the prime broker 

had rejected the transaction pursuant to 

Rule 901(e)(1)(i), as adopted. 

Transaction 2: The Prime Broker/

Executing Dealer Transaction 

• The executing dealer and prime 

broker would enter into a prime broker/ 

executing dealer transaction 

(Transaction 2). 

• The prime broker and executing 

dealer would be required by Rule 

901(a)(2)(ii)(A), as adopted, to select the 

side that would be the reporting side for 

Transaction 2. 

• The reporting side of Transaction 2 

would have up to 24 hours after the 

time of execution to report to the 

registered SDR the applicable primary 

and secondary trade information of the 

transaction. Because Transaction 2 

arises from the termination, novation, or 

assignment of Transaction 1, the 

reporting side of Transaction 2 would 

need to report the transaction ID of 

Transaction 1 pursuant to Rule 

901(d)(10), as adopted.105

• Immediately upon receiving the 

report of Transaction 2, the registered 

SDR would be required to publicly 

disseminate a transaction report with all 

the information required by Rule 902(a) 

and with any flags required by the 

registered SDR’s policies and 

procedures under Rule 907. 

Transaction 3: The Prime Broker/

Customer Transaction 

• The prime broker would execute 

the prime broker/customer transaction 

(Transaction 3) to ‘‘step into’’ the 

position that the executing dealer 

established against the customer in 

Transaction 1. 

• The prime broker would be the 

reporting side for Transaction 3 under 

Rule 901(a)(2)(ii), as adopted.106

• The prime broker would have up to 

24 hours after the time of execution to 

report to the registered SDR the 

applicable primary and secondary trade 

information of Transaction 3. Because 

Transaction 3 arises from the 

termination, novation, or assignment of 

Transaction 1, the prime broker would 

need to report the transaction ID of 

Transaction 1 as part of the report of 

Transaction 3, pursuant to Rule 

901(d)(10), as adopted.107

• Immediately upon receiving the 

report of Transaction 3, the registered 

SDR would be required to publicly 

disseminate a transaction report with all 

the information required by Rule 902(a) 

and with any flags required by the 

registered SDR’s policies and 

procedures under Rule 907. 

C. Request for Comment 

The Commission requests comment 

on its discussion above of the 

application of Regulation SBSR to 

security-based swaps that are part of a 

prime brokerage arrangement. In 

particular: 

24. Does the description of prime 

brokerage arrangements above 

adequately describe prime brokerage 

arrangements in the security-based swap 

market? Do market participants employ 

other types of prime brokerage 

arrangements? If so, how do these prime 

brokerage arrangements differ from the 

arrangements discussed above? 

25. Should the prime broker/customer 

and/or prime broker/executing dealer 

transactions be exempted from public 

dissemination? Why or why not? 

26. Would market observers benefit 

from being able to observe any 

difference in price between the 

customer/executing dealer transaction 

and the prime broker/customer and 

prime broker/executing dealer 

transactions? 

27. Should public reports of related 

prime brokerage transactions include 

condition flags to indicate a relationship 

between the transactions? Would a 

market participant receive a distorted 

view of the market if condition flags are 

not used? Why or why not? 

28. Rule 901(e), as adopted, requires 

the executing dealer to report the 

termination of the customer/executing 

dealer transaction, because the 

executing dealer was the reporting side 

of that transaction. Should the duty to 

report the termination of the customer/ 


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108Under Rule 900(hh), as adopted, a ‘‘side’’ is a 

direct counterparty and any guarantor of that direct 

counterparty’s performance who meets the 

definition of ‘‘indirect counterparty’’ in connection 

with the security-based swap. Under the proposed 

amendments described above, there would be no 

‘‘reporting side’’ for a security-based swap for a 

platform-executed security-based swap that is 

submitted to clearing. While the platform would 

have the duty to report, it would not be a 

counterparty to the security-based swap and thus 

would not be a side. Furthermore, neither side 

would have the duty to report, and thus both sides 

would be non-reporting sides. 

109See supra Section II(B)(3). 

110See Regulation SBSR Adopting Release, 

Section XIII(B). 

111The Commission notes that proposed Rule 

901(a)(2)(i) and the proposed amendment to Rule 

908(b) would have the effect of making a registered 

clearing agency a participant—under Rule 900(u), 

as adopted—of any registered SDR to which it 

reports clearing transactions. Under Rule 900(u), as 

adopted, a counterparty of a security-based swap 

that is reported to a registered SDR becomes a 

participant of that registered SDR (assuming that 

the counterparty also falls within Rule 908(b), as 

adopted). The proposed amendment to the 

definition of ‘‘participant’’ also would make a 

registered clearing agency a participant of any alpha 

SDR to which it would be required to report 

whether it had accepted the alpha for clearing. 

112The Commission notes that, once a participant 

reports parent and affiliate information to a 

registered SDR, Rule 906(b) requires the participant 

to ‘‘promptly notify the registered [SDR] of any 

changes’’ to its parent and affiliate information. 

executing dealer transaction be shifted 

to the prime broker? Why or why not? 

As between the executing dealer and the 

prime broker, which person do you 

believe is better placed to report the 

termination? Why? 

29. Should the time of execution for 

any leg of a prime brokerage transaction 

be defined differently than as provided 

for in Rule 900(ii)? If so, why? 

V. Additional Proposed Amendments 

A. Amendments to Rule 905(a) 

Rule 905(a), as adopted, establishes a 

mechanism for reporting corrections of 

previously submitted security-based 

swap transaction information. Rule 

905(a) applies to any counterparty to a 

security-based swap that discovers an 

error in the information reported with 

respect to that security-based swap. 

Under Rule 905(a)(1), as adopted, if the 

non-reporting side discovers the error, 

the non-reporting side must promptly 

notify the reporting side of the error. 

Under Rule 905(a)(2), as adopted, once 

the reporting side receives notification 

of the error from the non-reporting side, 

or if the reporting side discovers the 

error on its own, the reporting side must 

promptly submit an amended report— 

containing the corrected information— 

to the registered SDR that received the 

erroneous transaction report. The 

reporting side must submit the report 

required by Rule 905(a) in a manner 

consistent with the policies and 

procedures of the registered SDR. 

As discussed in Section II, supra, the 

Commission is proposing to amend Rule 

901(a) to require a platform to report a 

security-based swap that is executed on 

the platform and that will be submitted 

to clearing. Accordingly, to preserve the 

principle in adopted Rule 905(a) that 

the person responsible for reporting a 

security-based swap also should be 

responsible for submitting a correction 

if it discovers an error, the Commission 

is proposing a conforming amendment 

to Rule 905(a) to account for the 

possibility that a person who is not a 

counterparty and is thus not on either 

side 108 of the transaction (i.e., a 

platform) could have the original duty 

to report the transaction. Thus, under 

the proposed amendment to Rule 

905(a)(1), a non-reporting side that 

discovers an error in the information 

reported with respect to a security-based 

swap would be required to promptly 

notify ‘‘the person having the duty to 

report’’ that security-based swap of the 

error. The Commission is proposing a 

similar change to Rule 905(a)(2). Under 

the proposed amendment to Rule 

905(a)(2), the person having the duty to 

report a security-based swap, whether a 

side or a platform, would be required to 

correct previously reported erroneous 

information with respect to that 

security-based swap if it discovers an 

error or if it receives notification of an 

error from a counterparty. 

B. Amendments to Rules 906(b) and 

907(a)(6) 

Under the proposed amendment to 

Rule 900(u) described above,109 the 

definition of ‘‘participant’’ would be 

expanded to include platforms that are 

required to report platform-executed 

security-based swaps that are submitted 

to clearing and registered clearing 

agencies that are required to report 

whether or not an alpha is accepted for 

clearing. Rule 906(b), as adopted, 

requires each participant of a registered 

SDR to provide the registered SDR 

information sufficient to identify any 

affiliate(s) of the participant that also are 

participants of the registered SDR and 

any ultimate parent(s) of the 

participant.110 By itself, the proposed 

amendment to Rule 900(u) would 

subject platforms and registered clearing 

agencies that are required to report 

whether or not they accept alpha 

transactions for clearing to the 

requirements of Rule 906(b).111

The Commission preliminarily 

believes that the purposes of Rule 

906(b)—namely, facilitating the 

Commission’s ability to measure 

derivatives exposure within the same 

ownership group—would not be 

advanced by requiring platforms and 

registered clearing agencies to report 

parent and affiliate information to a 

registered SDR. To the extent that a 

platform has an affiliate that transacts in 

security-based swaps, the positions of 

any such affiliate can be derived from 

other transaction reports indicating that 

affiliate as a counterparty. There would 

be no need for the Commission to 

aggregate the platform’s positions with 

those of its affiliates, because a platform 

would not assume any position in 

security-based swaps executed on its 

facilities. Furthermore, the risk 

management of a registered clearing 

agency is directly overseen by the 

Commission, and the Commission 

believes that it has adequate tools to 

carry out this function without 

subjecting the registered clearing agency 

to Rule 906(b). Accordingly, the 

Commission proposes to amend Rule 

906(b) to state that reporting obligations 

under Rule 906(b) do not apply to 

participants that are platforms or 

registered clearing agencies. 

The Commission proposes to make a 

similar amendment to Rule 907(a)(6). 

This rule, as adopted, requires a 

registered SDR to have policies and 

procedures ‘‘[f]or periodically obtaining 

from each participant information that 

identifies the participant’s ultimate 

parent(s) and any participant(s) with 

which the participant is affiliated, using 

ultimate parent IDs and counterparty 

IDs.’’ The Commission proposes to 

amend Rule 907(a)(6) to require a 

registered SDR to obtain this 

information only from a participant that 

is not a platform or a registered clearing 

agency. Thus, under the proposed 

amendment, Rule 907(a)(6) would 

require registered SDR to have policies 

and procedures ‘‘[f]or periodically 

obtaining from each participant other 

than a platform or a registered clearing 

agency information that identifies the 

participant’s ultimate parent(s) and any 

participant(s) with which the 

participant is affiliated, using ultimate 

parent IDs and counterparty IDs.’’ 112

C. Extending the Applicability of Rule 

906(c) 

Rule 906(c), as adopted, requires each 

participant of a registered SDR that is a 

registered security-based swap dealer or 

registered major security-based swap 

participant to establish, maintain, and 

enforce written policies and procedures 

that are reasonably designed to ensure 

that the participant complies with any 

obligations to report information to a 

registered SDR in a manner consistent 

with Regulation SBSR. As the 


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113See Regulation SBSR Adopting Release, 

Section XIII(C). 

114 In the Regulation SBSR Adopting Release, 

however, the Commission stated that it anticipates 

soliciting additional public comment on whether 

regulatory reporting and/or public dissemination 

requirements should be extended to transactions 

occurring within the United States between nonU.S. persons and which non-U.S. persons should 

incur reporting duties under Regulation SBSR. See 

Regulation SBSR Adopting Release, Section XV(D). 

115See supra Section II(B). 

116 15 U.S.C. 78m(m)(1)(B). 

117 15 U.S.C. 78m(m)(1)(C). 

118 15 U.S.C. 78m(m)(1)(D). 

Commission stated in the Regulation 

SBSR Adopting Release, the policies 

and procedures required by Rule 906(c) 

are intended to promote complete and 

accurate reporting of security-based 

swap information by SDR participants 

that are registered security-based swap 

dealers or registered major securitybased swap participants.113 Rule 906(c) 

also requires each registered securitybased swap dealer and registered major 

security-based swap participant to 

review and update its policies and 

procedures at least annually. 

Because the Commission is proposing 

amendments to Rule 901(a) to assign 

reporting obligations to platforms and 

registered clearing agencies, the 

Commission preliminarily believes that 

such registered clearing agencies and 

platforms, like registered security-based 

swap dealers and major security-based 

swap participants, should be required to 

establish and maintain written policies 

and procedures designed to promote 

compliance with their reporting 

obligations. Accordingly, the 

Commission proposes to amend Rule 

906(c) to extend the requirements of 

Rule 906(c) to registered clearing 

agencies and platforms that are 

participants of a registered SDR. 

The Commission preliminarily 

believes that the proposed amendment 

to Rule 906(c) should result in greater 

accuracy and completeness of the 

security-based swap transaction data 

reported to registered SDRs. Without 

written policies and procedures, 

compliance with reporting obligations 

might depend too heavily on key 

individuals or unreliable processes. For 

example, if knowledge of the reporting 

function was not reflected in written 

policies and procedures but existed 

solely in the memories of one or a few 

individuals, compliance with applicable 

reporting requirements by the firm 

might suffer if these key individuals 

depart the firm. The Commission 

preliminarily believes, therefore, that 

requiring participants that are platforms 

and registered clearing agencies to 

establish, maintain, and enforce written 

policies and procedures should promote 

clear, reliable reporting that can 

continue independent of any specific 

individuals. The Commission further 

believes that requiring such participants 

to establish, maintain, and enforce 

written policies and procedures relevant 

to their reporting responsibilities, as 

would be required by the proposed 

amendment to Rule 906(c), would help 

to improve the degree and quality of 

overall compliance with the reporting 

requirements of Regulation SBSR. 

D. Rule 908(b)—Limitations on 

Counterparty Reporting Obligations 

Rule 908(b) is designed to help further 

the cross-border application of 

Regulation SBSR by specifying what 

types of counterparties would and 

would not be subject to any duties 

under Regulation SBSR. Rule 908(b), 

as adopted, provides that 

‘‘[n]otwithstanding any other provision 

of [Regulation SBSR], a person shall not 

incur any obligation under [Regulation 

SBSR] unless it is: (1) A U.S. person; or 

(2) A registered security-based swap 

dealer or registered major security-based 

swap participant.’’ Thus, unregistered 

non-U.S. persons are not among the 

kinds of persons listed in Rule 908(b) as 

having any duties under Regulation 

SBSR.114

Under the proposed amendments 

described above, platforms and 

registered clearing agencies would have 

the duty to report security-based swap 

transactions to registered SDRs in 

certain circumstances. Under Rule 

908(b), as adopted, U.S. persons are 

among the types of persons that may 

incur duties under Regulation SBSR. 

Therefore, platforms and registered 

clearing agencies that are U.S. persons 

already fall within Rule 908(b). The 

Commission preliminarily believes that 

all platforms and registered clearing 

agencies should incur the duties 

specified in the proposed amendments 

to Rule 901(a),115 even if they are not 

U.S. persons. If the Commission does 

not propose to amend Rule 908(b) to 

include all platforms and registered 

clearing agencies, non-U.S.-person 

platforms and registered clearing 

agencies would be able to avoid duties 

to which U.S.-person platforms and 

registered clearing agencies would be 

subject. Therefore, the Commission 

proposes to amend Rule 908(b) to 

specifically include platforms and 

registered clearing agencies as entities 

that may incur duties under Regulation 

SBSR. Rule 908(b), as amended, would 

provide: ‘‘Notwithstanding any other 

provision of [Regulation SBSR], a 

person shall not incur any obligation 

under [Regulation SBSR] unless it is: (1) 

A U.S. person; (2) A registered securitybased swap dealer or registered major 

security-based swap participant; (3) A 

platform; or (4) A registered clearing 

agency.’’ 

E. Request for Comment 

The Commission requests comment 

on all aspects of the proposed 

amendments to Rules 905, 906(b), 

906(c), 907(a)(6), and 908 described 

above. In particular: 

30. Do you believe that Rule 905(a) 

should be amended to include 

platforms? Why or why not? Would any 

other conforming changes to Rule 905 

be advisable on account of the proposal 

to extend reporting duties to platforms? 

31. Do you agree with the 

Commission’s proposal to exclude 

platforms and registered clearing 

agencies from Rule 906(b)? Why or why 

not? 

32. Should Rule 906(c) be expanded 

to include platforms and registered 

clearing agencies? Why or why not? 

33. Do you agree with the proposed 

conforming amendment to Rule 908(b) 

to include platforms and registered 

clearing agencies? Why or why not? 

34. Do you believe any other 

conforming amendments to Regulation 

SBSR are necessary or desirable in light 

of the Commission’s proposal to extend 

reporting duties to platforms and 

registered clearing agencies as discussed 

above? If so, please describe. 

VI. Proposed Rule Prohibiting a 

Registered SDR From Charging Fees for 

or Imposing Usage Restrictions on 

Publicly Disseminated Data 

A. Background 

In addition to implementing the Title 

VII mandate for regulatory reporting of 

all security-based swaps, Regulation 

SBSR also implements the Title VII 

mandate for public dissemination of all 

security-based swaps. Section 

13(m)(1)(B) of the Exchange Act 116

authorizes the Commission ‘‘to make 

security-based swap transaction and 

pricing data available to the public in 

such form and at such times as the 

Commission determines appropriate to 

enhance price discovery.’’ Section 

13(m)(1)(C) of the Exchange Act 117

identifies four categories of securitybased swaps and directs the 

Commission to require ‘‘real-time public 

reporting’’ of transaction, volume, and 

pricing data for each category. Section 

13(m)(1)(D) of the Exchange Act 118

authorizes the Commission to require 

registered entities (such as registered 

SDRs) to publicly disseminate the 

security-based swap transaction and 


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14760 Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 

119 15 U.S.C. 78m(n)(5)(D)(ii). 120See Better Markets II at 2; DTCC II at 27; DTCC 

III at 2; Markit I at 2; WMBAA II at 8. 

121Markit I at 2. 

122 DTCC II at 27 (also stating that it is ‘‘good 

public policy that the aggregating entity not itself 

use the data for commercial purposes, particularly 

where data is required to be reported to an 

aggregator serving a regulatory purpose, and make 

such data available to value added providers on a 

non-discriminatory basis, consistent with 

restrictions placed on the data by the data 

contributors themselves’’); DTCC III at 2 (stating 

that the mandatory reporting regime ‘‘creates an 

opportunity for the SDR to improperly 

commercialize the information it receives’’ and that 

it is ‘‘important that regulators ensure that the 

public utility function of SDRs, which . . . support 

regulatory oversight and supervisory functions, as 

well as regulator-mandated public reporting, is 

separated from potential commercial uses of the 

data’’). 

123WMBAA II at 8. See also SDR Adopting 

Release, Section VI(D)(3) (discussing commercial 

use of information by SDRs). 

124Better Markets II at 2. 

125 ISDA IV at 17. 

126 17 CFR 43.2. 

127 Id. (emphasis added). 

128Commodity Futures Trading Commission, 

Real-Time Public Reporting of Swap Transaction 

Data (Final Rule), 77 FR 1182, 1207 (January 9, 

2012) (emphasis added). 

129 Id. at 1202. 

130See id. 

131See supra notes 116 to 119 and accompanying 

text. 

132See Cross-Border Proposing Release, 78 FR 

31126. 

pricing data required to be reported 

under Section 13(m) of the Exchange 

Act. Finally, Section 13(n)(5)(D)(ii) of 

the Exchange Act 119 requires SDRs to 

provide security-based swap 

information ‘‘in such form and at such 

frequency as the Commission may 

require to comply with public reporting 

requirements.’’ 

Accordingly, Rule 902(a), as adopted, 

requires a registered SDR to publicly 

disseminate a transaction report of a 

security-based swap, or a life cycle 

event or adjustment due to a life cycle 

event, immediately upon receipt of 

information about the security-based 

swap, with certain exceptions noted in 

Rule 902(c). Rule 900(cc), as adopted, 

defines ‘‘publicly disseminate’’ to mean 

‘‘to make available through the Internet 

or other electronic data feed that is 

widely accessible and in machinereadable electronic format.’’ 

Four commenters on Regulation 

SBSR, as originally proposed, raised 

issues that bear on whether—and, if so, 

under what terms—a registered SDR 

would be able to charge for the securitybased swap data that Regulation SBSR 

requires it to publicly disseminate.120

One of these commenters stated that 

security-based swap transaction data 

‘‘should be made available on 

reasonable commercial terms.’’ 121

Another commenter, which currently 

operates a trade repository, believed that 

registered SDRs should make ‘‘data 

available to value added providers on a 

non-discriminatory basis’’ and that the 

public utility function of an SDR should 

be separated from potential commercial 

use of the data.122 A third commenter 

stated that, consistent with reporting 

practices in other markets, ‘‘the 

reporting of SBS transaction information 

to a registered SDR should not bestow 

the SDR with the authority to use the 

security-based swap transaction data for 

any purpose other than those explicitly 

enumerated in the Commission’s 

regulations.’’ 123 A fourth commenter 

believed that ‘‘market information must 

be made available . . . on an equal 

basis, in terms of time of availability 

and content, to all market 

participants.’’ 124 Finally, a fifth 

commenter, responding to Regulation 

SBSR as re-proposed, stated that 

publicly disseminated data ‘‘should be 

freely available and readily accessible to 

the public.’’ 125

In adopting its own rules for public 

dissemination of swap transactions, the 

CFTC addressed the issue of whether a 

swap data repository could charge for its 

publicly disseminated data. In Section 

43.2 of those rules,126 the CFTC defined 

‘‘public dissemination’’ and ‘‘publicly 

disseminate’’ to mean ‘‘to publish and 

make available swap transaction and 

pricing data in a non-discriminatory 

manner, through the Internet or other 

electronic data feed that is widely 

published and in machine-readable 

electronic format.’’ The CFTC also 

defined ‘‘widely published’’ to mean ‘‘to 

publish and make available through 

electronic means and in a manner that 

is freely available and readily accessible 

to the public.’’ 127 Furthermore, the 

CFTC adopted Section 43.3(d)(2), which 

provides: ‘‘Data that is publicly 

disseminated . . . shall be available 

from an Internet Web site in a format 

that is freely available and readily 

accessible to the public.’’ In doing so, 

the CFTC noted that ‘‘implicit in this 

mandate [of public dissemination] is the 

requirement that the data be made 

available to the public at no cost’’ 128

and that ‘‘Section 43.3(d)(2) reflects the 

[CFTC]’s belief that data must be made 

freely available to market participants 

and the public, on a nondiscriminatory 

basis.’’ 129 However, the CFTC’s rules 

permit a swap data repository to offer, 

for a fee, value-added data products 

derived from the freely available 

regulatorily mandated public data and 

to charge fair and reasonable fees to 

providers of swap transaction and 

pricing data.130

After consideration of the comments 

received and the CFTC’s requirement 

that swap data repositories must publish 

and make available swap transaction 

data through electronic means and in a 

manner that is freely available and 

readily accessible to the public, the 

Commission now preliminarily believes 

that a registered SDR should not be 

permitted to charge fees for the securitybased swap transaction data that it is 

required to publicly disseminate 

pursuant to Regulation SBSR. Therefore, 

the Commission is proposing new Rule 

900(tt), which would define the term 

‘‘widely accessible’’ as used in the 

definition of ‘‘publicly disseminate’’ in 

Rule 900(cc), as adopted, to mean 

‘‘widely available to users of the 

information on a non-fee basis.’’ As 

discussed below, this proposed 

definition would have the effect of 

prohibiting a registered SDR from 

charging fees for, or imposing usage 

restrictions on, the security-based swap 

transaction data that it is required to 

publicly disseminate under Regulation 

SBSR. 

Title VII contains numerous 

provisions directing the Commission to 

establish a regime for post-trade 

transparency in the security-based swap 

market, which will allow the public to 

obtain pricing, volume, and other 

relevant information about all executed 

transactions.131 In the Commission’s 

preliminary view, the statutory 

requirement to make this transaction 

information publicly available would be 

frustrated if third parties could charge 

members of the public for the right to 

access that disseminated data. 

The Commission furthermore believes 

that Title VII’s public dissemination 

requirements should be interpreted in 

light of the current structure of the 

security-based swap market, which 

developed as an over-the-counter 

market without transparent volume and 

pricing information.132 In the current 

market, large dealers and certain other 

large market participants are able to 

observe their own order flow and 

executions to develop a better view of 

the market than smaller market 

participants. Because of this greater 

amount of private order flow, larger 

market participants are better able to 

assess current market values and have a 

negotiating advantage over smaller, less 

informed counterparties. The 

Commission is concerned that, to the 

extent that the amount or structure of 

the fee deters use by smaller market 

participants, information asymmetries 

in the security-based swap market 

would persist and there would be less 

efficiency and competition in the 


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133See BSDR Fee Schedule at http://

www.bloombergsdr.com/assets/img/BSDR%20- 

%20Exhibit%20O%20(Fees).pdf (last visited on 

October 24, 2014); CME Swap Data Repository Fee 

Schedule at http://www.cmegroup.com/marketdata/files/cme-repository-service-fee-schedule.pdf 

(last visited on October 24, 2014); DTCC Derivatives 

Repository US Fee Schedule at http://

www.dtcc.com/∼/media/Files/Downloads/Data-andRepository-Services/GTR/US-DDR/DDR_Fees.pdf 

(last visited on October 24, 2014); ICE Trade Vault 

Service and Pricing Schedule at https://

www.theice.com/publicdocs/ICE_Trade_Vault_Fee_

Schedule.pdf (last visited on October 24 2014). 

134See Regulation SBSR Adopting Release, 

Section X(B)(3) (noting that the ‘‘Commission does 

not believe that access to [publicly disseminated] 

information should be impeded by having to pay 

fees or agree to usage restrictions in order to 

understand any coded information that might be 

contained in the transaction data’’). 

market than if pricing and volume data 

were available to all market participants 

for free. 

The Commission has considered the 

alternative of allowing registered SDRs 

to charge users fees, on a cost-recovery 

basis, for receiving the security-based 

swap transaction data that the registered 

SDR is required to publicly disseminate. 

However, the Commission is not 

proposing that alternative. A person that 

registers with the Commission as an 

SDR is also likely to be registered with 

the CFTC as a swap data repository. A 

dually registered SDR would likely use 

the same infrastructure to support 

public dissemination of swap 

transaction data as well as securitybased swap transaction data. The 

Commission preliminarily believes that 

it would be difficult if not impossible to 

allocate the overhead and ongoing costs 

of a dually registered SDR to support 

mandated public dissemination between 

its swap-related functions and securitybased-swap-related functions. As a 

result, it is unlikely that any such fee 

imposed on users by the SDR would go 

exclusively to offsetting the costs of 

publicly disseminating the regulatorily 

mandated security-based swap 

transaction data, rather than the costs 

associated with publicly disseminating 

swap data or other SDR functions. 

Therefore, the Commission 

preliminarily believes that permitting 

SEC-registered SDRs to impose fees on 

users for receiving the security-based 

swap transaction data that the SDR is 

required to publicly disseminate, even 

on a cost-recovery basis, while the CFTC 

prohibits swap data repositories from 

doing the same could result in a crosssubsidy for the public dissemination of 

swap data. 

The Commission recognizes that 

establishing and operating registered 

SDRs so that they can carry out the 

duties assigned to them under Title VII 

entails various costs. However, the 

Commission preliminarily believes that 

prohibiting registered SDRs from 

imposing fees on users for receiving the 

security-based swap transaction data 

that the SDR is required to publicly 

disseminate would not impede their 

ability to carry out their functions. 

Another means exists for registered 

SDRs to obtain funds for their 

operations that the Commission 

preliminarily believes is more 

appropriate: Imposing fees on those 

persons who are required to report 

transactions. Under such an approach, 

fees imposed by a registered SDR for 

reporting would increase in direct 

proportion to the number of transactions 

that a market participant is required to 

report. The Commission notes that 

CFTC-registered swap data repositories, 

some of which are likely to apply for 

registration with the Commission as 

SDRs for security-based swaps, 

currently disseminate regulatorily 

mandated public swap data for free 

pursuant to the CFTC’s rules, and obtain 

funds for their operations through other 

means, including reporting fees.133

Thus, the Commission preliminarily 

believes that—the proposed definition 

of ‘‘widely accessible’’ 

notwithstanding—SEC-registered SDRs 

would have adequate sources for their 

funding even if they are prohibited from 

charging users fees for receiving the 

security-based swap transaction data 

that the SDR is required to publicly 

disseminate. 

In addition, the Commission 

preliminarily believes that it is 

necessary to prohibit a registered SDR 

from charging users of regulatorily 

mandated security-based swap 

transaction data for public 

dissemination of the data to reinforce 

Rule 903(b), as adopted. Rule 903(b) 

provides that a registered SDR may 

disseminate information using UICs 

(such as product IDs or other codes— 

e.g., reference entity identifiers— 

embedded within the product IDs) or 

permit UICs to be used for reporting by 

its participants only if the information 

necessary to interpret such UICs is 

widely available on a non-fee basis. The 

Commission is concerned that a 

registered SDR that wished to charge (or 

allow others to charge) users for the 

information necessary to understand 

these UICs—but could not, because of 

Rule 903(b)—might seek to do so 

indirectly by recharacterizing the charge 

as being for public dissemination. 

Under these circumstances, the 

economic benefit to the registered SDR 

would be the same, but how the 

registered SDR characterizes the fee— 

i.e., whether as a charge to users for 

public dissemination or as a charge of 

accessing the UICs within the publicly 

disseminated data—would be the 

difference between the fee being 

permissible or impermissible under 

Rule 903(b). Thus, permitting a 

registered SDR to charge users for 

receiving the publicly disseminated 

transaction data could undermine the 

purpose of Rule 903(b). Accordingly, the 

Commission is proposing a definition of 

‘‘widely accessible’’ to mean ‘‘widely 

available to users of the information on 

a non-fee basis.’’ The language of the 

proposed definition echoes the language 

of Rule 903(b), as adopted, which 

requires a registered SDR to permit 

information to be reported or publicly 

disseminated using codes in place of 

certain data elements only if the 

information necessary to interpret such 

codes is ‘‘widely available to users of 

the information on a non-fee basis.’’ 

Similar to the Commission’s 

statement regarding Rule 903(b) in the 

Regulation SBSR Adopting Release,134

the proposed requirement that 

information be ‘‘widely available to 

users of the information on a non-fee 

basis’’ necessarily implies that a 

registered SDR would not be permitted 

to impose—or allow to be imposed—any 

usage restrictions on the security-based 

swap transaction information that it is 

required to publicly disseminate, 

including restrictions on access to or 

further distribution of the regulatorily 

mandated public security-based swap 

data. Market data usage restrictions 

typically take the form of an agreement 

between the provider and the users of 

the data. If a registered SDR could deny 

or limit access to a user based solely on 

the user’s violation of a usage 

restriction, the registered SDR would 

not be in compliance with Rule 902(a), 

which requires the registered SDR to 

publicly disseminate the information in 

a manner that is ‘‘widely available.’’ The 

Commission preliminarily believes that 

public dissemination would not satisfy 

the ‘‘widely available’’ standard if the 

registered SDR could deny access to 

users who do not agree to limit their use 

of the data in any manner directed by 

the registered SDR. Here, the 

Commission notes the asymmetric 

bargaining strength of the parties: A 

registered SDR might effectively have a 

monopoly position over the securitybased swap transaction data that the 

registered SDR is required to publicly 

disseminate. If a registered SDR could 

impose usage restrictions with which a 

user does not wish to comply, there 

would be no other source from which 

the user could freely obtain these 

transaction data. 


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14762 Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 

135The SDR Adopting Release discusses generally 

the commercial use of security-based swap data. 

See SDR Adopting Release, Section VI(D)(3)(c)(iii). 

136See ‘‘Real-Time Public Reporting of Swap 

Transaction Data’’ (December 20, 2011), 77 FR 1182, 

1207 (January 9, 2012) (adopting rules for the public 

dissemination of swaps). 

The proposed prohibition on usage 

restrictions would have the effect of 

prohibiting a restriction on bulk 

redistribution by third parties of the 

regulatorily mandated transaction data 

that the registered SDR publicly 

disseminates. The Commission 

preliminarily believes that it could 

prove useful to the public for 

intermediaries to collect, consolidate, 

and redistribute the regulatorily 

mandated transaction data to the public. 

Users of the data might, instead of 

obtaining data directly from each of 

several SDRs, find it preferable to obtain 

the data from a single person who itself 

obtains the data directly from the 

multiple registered SDRs and 

consolidates it. The Commission 

preliminarily believes that allowing 

unencumbered redistribution would be 

more consistent with the policy goals of 

wide availability of the data and 

minimization of information 

asymmetries in the security-based swap 

market. If the Commission prohibits 

registered SDRs from imposing a 

restriction on bulk redistribution, third 

parties would be able to take in the full 

data set and scrub, reconfigure, 

aggregate, analyze, repurpose, or 

otherwise add value to those data, and 

potentially sell that value-added 

product to others. 

Rule 902(a), as adopted, and the 

proposed definition of ‘‘widely 

available’’ would not prohibit a 

registered SDR from creating and 

charging fees for a value-added data 

product that incorporates the 

regulatorily mandated transaction data, 

provided that the registered SDR has 

first satisfied its duty under Rule 902(a) 

and effected public dissemination of 

each security-based swap transaction in 

accordance with the proposed definition 

of ‘‘widely available.’’ 135 In other 

words, a registered SDR could make 

publicly available both a regulatorily 

mandated and value-added data 

product. However, to comply with Rule 

902(a), as adopted, a registered SDR is 

required to publicly disseminate a 

transaction report of a security-based 

swap (assuming that the transaction 

does not fall within Rule 902(c), as 

adopted) immediately upon receipt of 

information about the security-based 

swap. Thus, the registered SDR could 

not make the value-added product 

available before it publicly disseminated 

the regulatorily mandated transaction 

report. If a registered SDR makes a feebased, value-added product available 

more quickly than the required 

transaction report, the registered SDR 

would not be acting consistent with 

Rule 902(a) because it would not be 

disseminating the required transaction 

report immediately. 

This approach is consistent with 

parallel requirements under CFTC rules 

that require regulatorily mandated data 

be freely available to the public, but do 

not prohibit a CFTC-registered swap 

data repository from making commercial 

use of such data subsequent to its public 

dissemination.136 This approach also is 

designed to promote competition in the 

market for value-added security-based 

swap data products. Other potential 

competitors in this market will 

necessarily have to obtain the 

regulatorily mandated transaction 

information from a registered SDR, 

because the SDR has a monopoly on this 

information until it is made widely 

accessible to the public. Potential 

competitors could be at a disadvantage 

if, needing to obtain the raw material for 

their own services, they had to purchase 

a value-added data product from the 

registered SDR or could obtain the 

regulatorily mandated transaction data 

only on a delayed basis. The 

Commission believes that the 

transparency goals of Title VII will be 

furthered by reducing impediments to 

competition in the market for valueadded post-trade data products relating 

to security-based swaps. 

B. Request for Comment 

The Commission requests comment 

on the proposed definition of ‘‘widely 

accessible’’ as applied to the public 

dissemination requirement of Rule 

902(a), as adopted. In particular: 

35. Do you believe that registered 

SDRs should be prohibited from 

charging users fees for or imposing 

usage restrictions on the security-based 

swap transaction information that 

registered SDRs are required to publicly 

disseminate under Rule 902(a)? Why or 

why not? 

36. What effects would result if 

registered SDRs were permitted to 

charge users fees for regulatorily 

mandated public dissemination even 

though CFTC-registered SDRs are 

prohibited from doing so? 

37. Do means exist for registered SDRs 

to recoup their operating costs other 

than by imposing fees on users for 

receiving and using the publicly 

disseminated transaction data? If so, 

please describe those means. 

38. Should a registered SDR be 

prohibited from imposing any usage 

restrictions on the regulatorily 

mandated security-based swap 

transaction data that it publicly 

disseminates? Why or why not? What 

kinds of usage restrictions are typically 

included in user agreements for other 

types of market data? What would be 

the effect of prohibiting such usage 

restrictions from being imposed on the 

regulatorily mandated security-based 

swap transaction information that is 

publicly disseminated by registered 

SDRs? 

39. Should a registered SDR be 

permitted to impose a prohibition 

against bulk re-dissemination of the 

regulatorily mandated transaction data 

that it publicly disseminates? Why or 

why not? 

40. Do you believe that the proposed 

definition of ‘‘widely accessible’’ as 

applied to the public dissemination 

requirement of Rule 902(a), as adopted, 

would impact the market for valueadded post-trade data products in the 

security-based swap market? Why or 

why not? If so, how would it affect the 

market? 

VII. Proposed Compliance Schedule for 

Regulation SBSR 

In the Regulation SBSR Proposing 

Release, the Commission proposed Rule 

910, which would have set forth various 

compliance dates under Regulation 

SBSR and, in general, was designed to 

clarify the implementation process. The 

Commission did not adopt Rule 910 in 

the Regulation SBSR Adopting Release. 

Although the Commission received 

comment on its proposed compliance 

schedule, the Commission now believes 

that a new compliance schedule for 

most of the rules in Regulation SBSR 

should be proposed in light of the fact 

that industry infrastructure and 

capabilities have changed since the 

initial proposal. Most notably, the CFTC 

regime for swap data reporting and 

dissemination is operational. The 

Commission understands that persons 

who are likely to apply for registration 

with the Commission as SDRs are 

already CFTC-registered swap data 

repositories, and many swap market 

participants are also active in the 

security-based swap market. Thus, these 

SDRs and many security-based swap 

market participants already have made 

substantial investments in compliance 

and reporting systems that will likely 

also be utilized to support Regulation 

SBSR compliance. 

Finally, the Commission now believes 

that it is not necessary to include 

compliance dates within the text of 


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137Therefore, the Commission did not adopt the 

defined terms ‘‘effective reporting date,’’ ‘‘phase-in 

period,’’ and ‘‘registration date’’ that were included 

in Rule 900, as originally proposed, which terms 

appeared only in proposed Rule 910. 

138As part of the Cross-Border Proposing Release, 

the Commission re-proposed Rule 910 with only 

minor changes. Rule 910(b)(4) was re-proposed to 

reflect that certain cross-border security-based 

swaps would be subject to regulatory reporting but 

not public dissemination. See Cross-Border 

Proposing Release, 78 FR 31067. As originally 

proposed, Rule 910(b)(4) would have provided that 

all security-based swaps reported to a registered 

SDR would be subject to real-time public 

dissemination as specified in Rule 902. See 

Regulation SBSR Proposing Release, 75 FR 75244. 

The Commission also replaced the term ‘‘reporting 

party’’ with ‘‘reporting side’’ in re-proposed Rule 

910. 

139For Rules 900, 907, and 909 of Regulation 

SBSR, the compliance date is the effective date of 

Regulation SBSR. See Regulation SBSR Adopting 

Release, Section I(F). 

140As discussed in the Cross-Border Proposing 

Release, re-proposed Rule 908(a) would have 

provided an exception to public dissemination for 

transactions executed by a non-U.S. person who is 

guaranteed by a U.S. person, where there is no U.S. 

person or security-based swap dealer on the other 

side and the transaction is not cleared through a 

clearing agency having its principal place of 

business in the United States. As discussed in the 

Regulation SBSR Adopting Release, the 

Commission did not adopt this proposed exception. 

Rather, Rule 908(a)(1), as adopted, requires public 

dissemination of a security-based swap if one side 

consists of a non-U.S.-person direct counterparty 

and a U.S.-person guarantor, where neither is a 

registered security-based swap dealer or registered 

major security-based swap participant, and the 

other side includes no counterparties that are U.S. 

persons, registered security-based swap dealers, or 

registered major security-based swap participants (a 

‘‘covered cross-border transaction’’). See CrossBorder Proposing Release, 78 FR 31062–63. The 

Commission anticipates seeking additional 

comment on whether or not to except covered 

cross-border transactions from public 

dissemination. Therefore, the Commission also is 

proposing to defer the compliance date for Rule 

908(a)(1)(i) with respect to the public dissemination 

of covered cross-border transactions until such time 

as the Commission receives and considers public 

comment on such an exception or establishes a 

separate compliance date for these transactions. 

141Rule 13n–1(c)(3) under the Exchange Act 

provides that the Commission shall grant 

registration of an SDR if ‘‘the Commission finds that 

such security-based swap data repository is so 

organized, and has the capacity, to be able to assure 

the prompt, accurate, and reliable performance of 

its functions as a security-based swap data 

repository, comply with any applicable provision of 

the federal securities laws and the rules and 

regulations thereunder, and carry out its functions 

in a manner consistent with the purposes of Section 

13(n) of the Act (15 U.S.C. 78m(n)) and the rules 

and regulations thereunder.’’ Although a registered 

SDR will have demonstrated its operational 

capability during the registration process, a 

registered SDR is not required to and likely will not 

formally commence operations as a registered SDR 

on the same day that it is approved for registration. 

142As part of the SDR registration process, a 

potential registrant must provide all of the policies 

and procedures required by Rule 907; the 

Commission will review those policies and 

procedures in assessing whether to approve the 

registration. See Form SDR (requiring applicants to 

attach as Exhibit GG all of the policies and 

procedures required under Regulation SBSR). In 

connection with its registration as an SDR, the 

potential registrant also must register as a securities 

information processor (‘‘SIP’’) as required by Rule 

909. Rule 907 provides, among other things, that a 

registered SDR must establish certain policies and 

procedures relating to the receipt, reporting, and 

dissemination of security-based swap data. Rule 

909, as adopted, provides that a registered SDR 

must also register with the Commission as a SIP. 

The compliance date for Rules 907 and 909 will be 

60 days after publication of the Regulation SBSR 

Adopting Release in the Federal Register. See 

Regulation SBSR Adopting Release, Section I(F). 

Regulation SBSR.137 Not including a 

compliance schedule in the text of 

Regulation SBSR would prevent 

portions of Regulation SBSR from 

becoming obsolete soon after adoption 

while still providing affected persons 

with guidance about when they are 

required to comply with the various 

provisions of Regulation SBSR. 

A. Initial Proposal 

1. Rule 910 

In the Regulation SBSR Proposing 

Release, the Commission proposed Rule 

910 to provide clarity as to securitybased swap reporting and dissemination 

timelines and to establish a phased-in 

compliance schedule for Regulation 

SBSR.138 As initially proposed, Rule 

910 would have required reporting of 

pre-enactment security-based swaps by 

January 12, 2012, and would have 

implemented a compliance schedule for 

Regulation SBSR in four phases. Each 

registered SDR and its participants 

would have been required to comply 

with the requirements of each phase by 

set periods of time measured from the 

registration date of that registered SDR, 

as described in more detail below: 

• Phase 1, six months after the 

registration date: (1) Reporting parties 

would have been required to report any 

transitional security-based swaps to the 

registered SDR; (2) reporting parties 

would have been required to report all 

newly executed security-based swaps to 

the registered SDR; (3) participants and 

the registered SDR would have been 

required to comply with the error 

reporting rule (except with respect to 

dissemination) and the requirements of 

Rules 906(a) and 906(b); and (4) 

security-based swap dealers and major 

security-based swap participants would 

have been required to comply with Rule 

906(c). 

• Phase 2, nine months after the 

registration date: The registered SDR 

would have been required to 

disseminate transaction reports and 

corrected transaction reports for 50 

security-based swap instruments. 

• Phase 3, 12 months after the 

registration date: The registered SDR 

would have been required to 

disseminate transaction reports and 

corrected transaction reports for an 

additional 200 security-based swap 

instruments. 

• Phase 4, 18 months after the 

registration date: The registered SDR 

would have been required to 

disseminate transaction reports and 

corrected transaction reports for all 

security-based swaps reported to the 

registered SDR. 

2. Rule 911 

The Regulation SBSR Proposing 

Release included proposed Rule 911, 

which was designed to prevent evasion 

of the public dissemination requirement 

during a period when two or more SDRs 

had registered with the Commission but 

were operating under different 

compliance dates. Rule 911, as reproposed, would have provided that a 

reporting side shall not report a 

security-based swap to a registered SDR 

in a phase-in period described in Rule 

910 during which the registered SDR is 

not yet required to publicly disseminate 

transaction reports for that securitybased swap instrument unless: (1) The 

security-based swap also is reported to 

a registered SDR that is disseminating 

transaction reports for that securitybased swap instrument, consistent with 

proposed Rule 902; or (2) no other 

registered SDR is able to receive, hold, 

and publicly disseminate transaction 

reports regarding that security-based 

swap instrument. 

B. New Proposed Compliance Schedule 

The Commission is proposing a new 

compliance schedule for Rules 901, 902, 

903, 904, 905, 906, and 908 of 

Regulation SBSR139 that is designed to 

provide affected persons, especially 

registered SDRs and persons with a duty 

to report security-based swap 

transactions to registered SDRs, with 

time to develop, test, and implement 

reporting and dissemination systems.140

The proposed compliance schedule is 

tied to the commencement of operations 

of a registered SDR in an asset class.141

Registered SDRs will need time to make 

the necessary technological and other 

preparations needed, including 

implementing policies and 

procedures,142 to begin receiving and 

disseminating security-based swap 

information. Persons with a duty to 

report transactions will need time to 

analyze the policies and procedures of 

registered SDRs to which they wish to 

connect, make necessary changes to 

their internal systems, policies and 

procedures, and processes to conform to 

the requirements of the SDR’s policies 

and procedures, and establish and test 

their linkages to the SDRs. 

In light of these activities that must 

occur before full compliance with 


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14764 Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 

143The Commission notes that, for some 

transitional security-based swaps, there might be 

only a short period between the date of execution 

and the date on which they must be reported to a 

registered SDR. For example, assume that 

Compliance Date 1 with respect to a particular asset 

class is July 14, 2016; if a security-based swap in 

that asset class is executed on July 10, 2016, the 

person with the duty to report that transaction 

would be required to report it to a registered SDR 

within four days of execution (i.e., on or before July 

14, 2016). 

Regulation SBSR can be expected, the 

Commission is proposing the following 

phased-in compliance schedule for 

Regulation SBSR: 

1. Proposed Compliance Date 1 

Proposed Compliance Date 1 relates to 

the regulatory reporting of newly 

executed security-based swaps as well 

pre-enactment and transitional securitybased swaps. On the date six months 

after the first registered SDR that accepts 

reports of security-based swaps in a 

particular asset class commences 

operations as a registered SDR, persons 

with a duty to report security-based 

swaps under Regulation SBSR would be 

required to report all newly executed 

security-based swaps in that asset class 

to a registered SDR. Furthermore, after 

Compliance Date 1, persons with a duty 

to report security-based swaps also 

would have a duty to report any life 

cycle events of any security-based 

swaps that previously had been required 

to be reported. 

The Commission recognizes that 

market participants will need adequate 

time to analyze and understand the 

policies and procedures of registered 

SDRs, to establish reporting connections 

to registered SDRs, and to develop new 

systems for capturing and reporting 

transaction information. The 

Commission preliminarily believes that 

this time period is an appropriate 

amount of time for market participants 

to do so. Any registered SDR that has 

commenced operations will have 

established policies and procedures that 

are consistent with Rule 907. Therefore, 

six months should allow adequate time 

for market participants to make the 

preparations necessary to connect with 

and report to a registered SDR, 

including analyzing and complying 

with the policies and procedures of the 

registered SDR and performing systems 

testing. 

Also, by proposed Compliance Date 1, 

to the extent the information is 

available, persons with a duty to report 

pre-enactment security-based swaps and 

transitional security-based swaps in the 

relevant asset class would be required to 

report these transactions, in accordance 

with Rule 901(i), to a registered SDR 

that accepts reports of security-based 

swap transactions in that asset class.143

The Commission is proposing to require 

that all historical security-based swaps 

in that asset class be reported by 

Compliance Date 1, not on Compliance 

Date 1. Thus, a registered SDR that has 

commenced operations and that accepts 

reports of transactions in that asset class 

could allow persons with a duty to 

report to report such transactions on a 

rolling basis before Compliance Date 1. 

However, if it does so, the registered 

SDR would then be required to comply 

with the requirements of Regulation 

SBSR that are not subject to the phased 

compliance (i.e., those requirements 

that are immediately effective). 

Therefore, a registered SDR would need 

to comply with Rule 901(f) and time 

stamp, to the second, any security-based 

swap data that it receives pursuant to 

Rule 901(i). The registered SDR also 

would be required to comply with Rule 

901(g) and assign a transaction ID to 

each historical security-based swap that 

is reported to it on or before proposed 

Compliance Date 1. 

As participants begin reporting 

historical security-based swaps to a 

registered SDR in the days leading up to 

Compliance Date 1, participants and 

registered SDRs would be required to 

comply with Rules 901(e) and 905 

(except with respect to public 

dissemination) regarding any historical 

security-based swaps that are so 

reported. Thus, if historical securitybased swap X is reported to a registered 

SDR 30 days before Compliance Date 1, 

the counterparties to transaction X and 

the registered SDR that holds the 

mandatory report of transaction X 

would immediately become subject to 

the life cycle event reporting and errorcorrection requirements of Rules 901(e) 

and 905, respectively with respect to 

transaction X. However, if transaction Y 

has not yet been reported to a registered 

SDR (and assuming that Compliance 

Date 1 has not yet arrived), the 

counterparties and the registered SDR 

would not yet incur any duties under 

Rules 901(e) or 905 with respect to 

transaction Y. 

Finally, by proposed Compliance Date 

1, registered security-based swap 

dealers, registered major security-based 

swap participants, registered clearing 

agencies, and platforms would be 

required to comply with Rule 906(c); 

participants (except for platforms and 

registered clearing agencies) would be 

required to comply with Rules 906(a) 

and 906(b); and registered SDRs also 

would be required to comply with Rule 

906(a). 

The Commission preliminarily 

believes that a six-month compliance 

phase-in would provide sufficient time 

for registered security-based swap 

dealers, registered major security-based 

swap participants, registered clearing 

agencies, and platforms to establish 

their own policies and procedures for 

reporting transactions in a particular 

asset class and to implement the 

systems changes needed to comply with 

Regulation SBSR. Participants would 

not be required to report to the first SDR 

that accepts security-based swaps in 

that asset class that registers with the 

Commission; participants could report 

to any SDR that accepts transactions in 

that asset class that has been registered 

by the Commission and has commenced 

operations by Compliance Date 1. 

Registered SDRs would not be required 

to publicly disseminate any transaction 

reports until Compliance Date 2, as 

described below. 

Registered SDRs also would be 

required to comply with Rule 904 

beginning on proposed Compliance Date 

1, with the exception of Rule 904(d). 

Rule 904 requires a registered SDR to 

have systems in place to continuously 

receive and disseminate security-based 

swap information, with certain 

exceptions. Under final Rule 904(a), a 

‘‘registered SDR may establish normal 

closing hours when, in its estimation, 

the U.S. market and major foreign 

markets are inactive.’’ Under final Rule 

904(b), a registered SDR ‘‘may declare, 

on an ad hoc basis, special closing 

hours to perform system maintenance 

that cannot wait until normal closing 

hours.’’ In each case, the registered SDR 

must provide participants and the 

public with reasonable advance notice 

of its normal closing hours and special 

closing hours. Rule 904 also requires a 

registered SDR to have the ability to 

hold in queue any transaction data that 

it receives during normal and special 

closing hours or, if the registered SDR 

does not have the ability to received and 

hold data in queue, the registered SDR 

must immediately notify participants 

that it has resumed operations and any 

participant with a duty to report would 

be required to promptly re-report 

security-based swap information to the 

registered SDR. 

Also beginning on proposed 

Compliance Date 1, registered SDRs 

would be required to comply with the 

requirement in Rule 906(a) to provide to 

each participant a report of any missing 

UICs, and any participant receiving 

such a report would be required to 

comply with the requirement in Rule 

906(a) to provide the missing UICs to 

the registered SDR. The registered SDR 

and its participants also would be 


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Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 14765 

144 15 U.S.C. 78mm. 

145 15 U.S.C. 78c–3(e)(1). 

146See Securities Exchange Act Release No. 

64678 (June 15, 2011), 76 FR 36287, 36291 (June 22, 

2011) (Temporary Exemptions and Other 

Temporary Relief, Together With Information on 

Compliance Dates for New Provisions of the 

Securities Exchange Act of 1934 Applicable to 

Security-Based Swaps) (‘‘Effective Date Release’’). 

147See id. 

148Thus, as proposed, this exemption would 

expire on proposed Compliance Date 1 with respect 

to persons having a duty to report pre-enactment 

security-based swap transactions in the asset class 

of the first SDR to register with the Commission and 

commence operations as a registered SDR with 

respect to that asset class. For persons having a duty 

to report pre-enactment security-based swaps in any 

other asset class, the exemption would remain in 

force until six months after the first registered SDR 

that can accept reports of security-based swaps in 

that asset class has commenced operations as a 

registered SDR with respect to that asset class. 

subject to the error correction 

requirements of Rule 905, except that 

the registered SDR would not yet be 

required to publicly disseminate any 

corrected transaction reports (because it 

would not yet be required to publicly 

disseminate a report of the initial 

transaction). Participants (except for 

platforms and registered clearing 

agencies) also would be required to 

comply with the requirement in Rule 

906(b) to provide the registered SDR 

information sufficient to identity its 

ultimate parent(s) and any affiliate(s) 

that also are participants of the 

registered SDR. The Commission 

preliminarily believes that these 

requirements will facilitate accurate and 

complete reporting of transaction 

information. 

2. Proposed Compliance Date 2 

Proposed Compliance Date 2 relates to 

the public dissemination of securitybased swap transaction data. Within 

nine months after the first registered 

SDR that accepts security-based swaps 

in a particular asset class commences 

operations as a registered SDR (i.e., 

three months after Compliance Date 1), 

each registered SDR in that asset class 

that has registered and commenced 

operation would be required to comply 

with Rules 902 (regarding public 

dissemination), 904(d) (requiring 

dissemination of transaction reports 

held in queue during normal or special 

closing hours), and 905 (with respect to 

public dissemination of corrected 

transaction reports) for all securitybased swaps in that asset class—except 

for ‘‘covered cross-border transactions,’’ 

as that term is described in the 

immediately following section. The 

Commission preliminarily believes that 

nine months after the first registered 

SDR that accepts security-based swaps 

in a particular asset class commences 

operations as a registered SDR is a 

sufficient amount of time for registered 

SDRs to begin disseminating securitybased swap transaction data, including 

corrected transaction reports. This will 

allow registered SDRs a period of three 

months after they begin receiving 

reports of individual security-based 

swap transactions to identify and 

resolve any issues related to trade-bytrade reporting by participants and 

further test their data dissemination 

systems. 

3. Effect of Registration of Additional 

SDRs 

As discussed immediately above, the 

first SDR that is registered by the 

Commission and commences operations 

as a registered SDR starts the 

countdown to proposed Compliance 

Dates 1 and 2 for any asset class in 

which that SDR chooses to accept 

transaction reports. A subsequent SDR 

that is approved by the Commission, 

can accept reports of security-based 

swaps in that asset class, and 

commences operations would be subject 

to the same proposed Compliance Dates, 

as shown in the following examples: 

• Example 1. SDR A registers with 

the Commission and, subsequently, 

commences operations as a registered 

SDR on June 1, 2015. Therefore, 

Compliance Date 1 (with respect to 

transactions in any asset class that can 

be accepted by SDR A) is December 1, 

2015. SDR B, which accepts securitybased swaps in the same asset class, 

registers and subsequently commences 

operations as a registered SDR on 

November 2, 2015. Mandatory 

transaction-by-transaction reporting 

pursuant to Rule 901 still begins on 

December 1, 2015. However, persons 

with the duty to report may report to 

either SDR A or SDR B, even though 

SDR B would have been registered for 

less than one month. 

• Example 2. Again, SDR A registers 

with the Commission and, 

subsequently, commences operations as 

a registered SDR on June 1, 2015. 

Therefore, Compliance Date 1 (with 

respect to transactions in any asset class 

that can be accepted by SDR A) is 

December 1, 2015, and Compliance Date 

2 is March 1, 2016. SDR C registers and, 

subsequently, commences operations as 

a registered SDR on February 15, 2016. 

(There is no SDR B in this example.) 

Mandatory transaction-by-transaction 

reporting pursuant to Rule 901 began on 

December 1, 2015. As of the first day on 

which it operates, SDR C must be 

prepared to accept transaction-bytransaction reports, as required by Rule 

901. Both SDR A and SDR C must begin 

publicly disseminating last-sale reports, 

as required by Rule 902, on March 1, 

2016. 

• Example 3. Again, SDR A registers 

with the Commission and, 

subsequently, commences operations as 

a registered SDR on June 1, 2015. 

Therefore, Compliance Date 1 (with 

respect to transactions in any asset class 

that can be accepted by SDR A) is 

December 1, 2015, and Compliance Date 

2 is March 1, 2016. SDR D registers and, 

subsequently, commences operations as 

a registered SDR on June 15, 2017. SDR 

D must be prepared to accept 

transaction-by-transaction reports, as 

required by Rule 901, and to publicly 

disseminate last-sale reports, as required 

by Rule 902, as of the first day on which 

it operates as a registered SDR. SDR D’s 

registration would not create a new set 

of compliance timeframes. 

4. Proposed Changes to Certain 

Exemptions Related to the Proposed 

Compliance Schedule 

In connection with Compliance Date 

1, the Commission is also proposing to 

extend its exemption related to the 

reporting of pre-enactment securitybased swaps in order to ensure 

consistency between the proposed 

compliance schedule and the 

exemption. In June 2011, the 

Commission exercised its authority 

under Section 36 of the Exchange 

Act 144 to exempt any person from 

having to report any pre-enactment 

security-based swaps pursuant to 

Section 3C(e)(1) of the Exchange Act 145

until six months after an SDR that is 

capable of receiving security-based 

swaps in that asset class is registered by 

the Commission.146 At the time, the 

Commission noted that the exemption 

was consistent with Rule 910, as 

proposed.147 Because Compliance Date 

1 is tied to the commencement of 

operations of a registered SDR and 

because some time may elapse between 

the date on which the Commission 

approves an SDR’s registration and the 

date on which it commences operations 

as a registered SDR, the Commission is 

proposing to modify the reporting 

exemption to harmonize it with the 

proposed compliance schedule. The 

Commission is therefore proposing to 

exercise its authority under Section 36 

of the Exchange Act to exempt any 

person from having to report any preenactment security-based swaps 

pursuant to Section 3C(e)(1) of the 

Exchange Act until six months after an 

SDR that is capable of receiving 

security-based swaps in that asset class 

is registered by the Commission and has 

commenced operations as a registered 

SDR.148 The Commission preliminarily 

believes that this exemption is 

necessary or appropriate in the public 


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14766 Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 

149 15 U.S.C. 78cc(b). 

150See Effective Date Release, 76 FR 36305. 

151 15 U.S.C. 78cc(b). 

152See Bachus/Lucas Letter at 3; Barnard I at 4; 

CCMR I at 2; Cleary I at 17–21; DTCC I at 24–25; 

DTCC III at 8–9; DTCC IV at 8; FINRA Letter at 4– 

5; Institutional Investors Letter at 3; ISDA III at 2 

(suggesting a phase-in for reporting of historical 

security-based swaps); ISDA/SIFMA I at 9–10; 

ISDA/SIFMA Block Trade Study at 2; MarkitSERV 

I at 10; MFA I at 6; MFA Recommended Timeline 

at 1; Morgan Stanley Letter at 6; Roundtable Letter 

at 4–9; UBS Letter at 2–3; ISDA IV at 2–3. 

153See CCMR I at 2; Cleary I at 19–21; DTCC II 

at 24–25; ISDA/SIFMA I at 9. 154 ISDA/SIFMA I at 9. 155 Institutional Investors Letter at 3. 156See ISDA IV at 2. 157Cleary I at 19. See also WMBAA II at 4 (stating 

that ‘‘[i]t is necessary that any compliance period 

or registration deadline provides sufficient 

opportunity for existing trade execution systems or 

platforms to modify and test systems, policies and 

procedures to ensure that its operations are in 

compliance with the final rules’’). 

158See DTCC II at 25. 

159See Cleary I at 20. 

160 DTCC IV at 9. This commenter also stated that 

a phased-in implementation of Regulation SBSR 

would allow time for extensive testing and 

preparation needed to avoid systemic risk and the 

dissemination of inaccurate information. See DTCC 

I at 2. 

161See FINRA Letter at 5. See also ISDA/SIFMA 

Block Trade Study at 2 (stating that phased-in 

implementation would provide regulators with time 

to test and refine preliminary standards). 

162See CCMR I at 2; Cleary I at 19; ISDA/SIFMA 

Block Trade Study at 2; UBS Letter at 2. Another 

commenter believed that the reporting requirements 

could apply first to products that are cleared and 

executed on a trading platform, then to products 

that are cleared, but not executed on a trading 

platform, and finally to uncleared products. See 

Morgan Stanley Letter at 6. 

163See CCMR I at 2. 

interest, and is consistent with the 

protection of investors because such 

action would prevent the existing 

exemption from expiring before persons 

with a duty to report pre-enactment 

security-based swaps can report them to 

a registered SDR, taking into account 

that an SDR may require some time 

between the date on which the 

Commission approves its registration 

and the date on which it is able to 

commence operations as a registered 

SDR with respect to a particular asset 

class. 

In addition, in the Effective Date 

Release, the Commission also exercised 

its authority under Section 36 of the 

Exchange Act to temporarily exempt 

any security-based swap contract 

entered into on or after July 16, 2011, 

from being void or considered voidable 

by reason of Section 29(b) of the 

Exchange Act,149 because any person 

that is a party to the security-based 

swap contract violated a provision of 

the Exchange Act that was amended or 

added by Subtitle B of Title VII of the 

Dodd Frank Act and for which the 

Commission has taken the view that 

compliance will be triggered by 

registration of a person or by adoption 

of final rules by the Commission, or for 

which the Commission has provided an 

exception or exemptive relief, until such 

date as the Commission specifies.150 In 

relevant part, Section 29(b) of the 

Exchange Act provides that ‘‘[e]very 

contract made in violation of any 

provision of this title or of any rule or 

regulation thereunder, and every 

contract . . . heretofore or hereafter 

made, the performance of which 

involves the violation of, or the 

continuance of any relationship or 

practice in violation of, any provision of 

this title or any rule or regulation 

thereunder, shall be void (1) as regards 

the rights of any person who, in 

violation of any such provision, rule, or 

regulation, shall have made or engaged 

in the performance of any such contract, 

and (2) as regards the rights of any 

person who, not being a party to such 

contract, shall have acquired any right 

thereunder with actual knowledge of the 

facts by reason of much the making or 

performance of such contract was in 

violation of any such provision rule or 

regulation . . .’’ 151 The Commission is 

proposing that, with respect to securitybased swaps in a particular asset class, 

the exemption from Section 29(b) of the 

Exchange Act, in connection with 

Section 3C(e)(1), would terminate on 

proposed Compliance Date 1 (i.e., six 

months after the first registered SDR in 

that asset class commences operations 

with respect to that asset class). 

C. Discussion of Comments Received in 

Response to the Initial Proposal 

Commenters responding to the 

Regulation SBSR Proposing Release 

generally recommended that the 

Commission implement Regulation 

SBSR in phases, but their detailed 

suggestions varied.152 Several 

commenters emphasized the need to 

provide adequate time for the 

development and implementation of 

reporting and compliance systems and 

procedures.153 One of these commenters 

stated, for example, that ‘‘virtually all 

existing systems would have to be 

significantly overhauled to satisfy the 

real-time reporting obligations’’ of 

Regulation SBSR.154 Another 

commenter emphasized that ‘‘market 

infrastructure must be in place prior to 

requiring market participant 

compliance’’ and that many financial 

entities that are not swap dealers or 

major swap participants may need 

additional time to comply.155 A third 

commenter noted that requiring 

reporting prior to the registration of 

security-based swap dealers and major 

security-based swap participants would 

complicate reporting and the 

determination of the reporting 

counterparty because ‘‘parties entering 

into security-based swaps . . . may be 

expected . . . to report ahead of the 

point their obligation becomes 

certain.’’ 156 A fourth commenter stated 

that any implementation timeline ‘‘must 

recognize the practical challenges that 

security-based swap data repositories 

and market participants will face in 

defining and implementing industrywide collection and dissemination 

mechanisms and internal data collection 

systems, respectively.’’ 157 A fifth 

commenter stated that, although much 

of the existing infrastructure of DTCC’s 

Trade Information Warehouse could 

form the core of the processes required 

by Regulation SBSR, substantial new 

industry-wide processes requiring 

significant coordination, testing, and 

development would have to be 

implemented, particularly around realtime reporting.158 One commenter 

believed that, given the complexity and 

novelty of the proposed reporting 

framework, a pilot program would allow 

the Commissions to evaluate the 

operational integrity of the 

infrastructure implementing the 

reporting rules.159 One commenter 

recommended a ‘‘relatively thorough 

phase-in period’’ during which only 

regulators would receive security-based 

swap information because of the 

potential for disseminating misleading 

real-time pricing information, which 

potentially could result in market 

disruptions and economic damage.160

One commenter also noted that a 

phased-in implementation would allow 

regulators to assess the impact of 

transparency on the security-based swap 

market and make adjustments, if 

necessary, to the timing of 

dissemination and the data that is 

disseminated.161 Other commenters 

echoed the belief that a phased-in 

approach would allow the Commission 

to assess the impact of public 

dissemination on liquidity in the 

security-based swap market, monitor 

changes in the market, and adjust the 

reporting rules, if necessary.162 One of 

these commenters believed that, without 

staged implementation, the new 

security-based swap transparency 

requirements could cause market 

disruptions if some dealers withhold 

capital until they were able to determine 

whether the reporting requirements 

would adversely impact their ability to 

manage risk.163 Another commenter 

agreed with the phased-in approach 

initially proposed by the Commission 

and believed that the obligations on 


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164See Barnard I at 4. The commenter also 

believed that the suggested numbers of securitybased swaps included in each of the initially 

proposed phases of implementation were 

reasonable. See id. 

165See Roundtable Letter at 4 (stating that market 

participants could prepare reports indicating the 

aggregate notional amount of swaps outstanding, 

subdivided by major category, and the identity of 

any counterparty representing 5% or more of their 

open positions by notional amount in that major 

category). 

166See FINRA Letter at 4. 

167See id. at 5. 

168See CCMR I at 2; Cleary I at 19–20; DTCC II 

at 10; ISDA/SIFMA I at 10; UBS Letter at 2–3. 

169UBS Letter at 3. 

170Cleary I at 20. See also ISDA/SIFMA I at 10 

(stating that the reporting requirements for securitybased swaps are significantly more complex than 

for TRACE, and the phase-in should reflect this 

degree of complexity); CCMR I at 2 (noting that 

TRACE took a ‘‘cautious approach’’ to 

implementation, even though it was implemented 

initially for a single asset class, corporate bonds). 171See Implementation Roundtable, Day 2 at 170– 

71 (Cummings). 172See Implementation Roundtable, Day 1 at 299, 

301 (Gooch); Implementation Roundtable, Day 2 at 

177–8 (Joachim). 173 Institutional Investors Letter at 3. See also 

Roundtable Letter at 4 (stating that there could be 

a ‘‘ ‘bottleneck’ both in the document negotiation 

process and in the move to clearing’’). 174See Implementation Roundtable, Day 1 at 264 

(Levi), 298 (Gooch); Implementation Roundtable, 

Day 2 at 174–8 (Collazo, Cummings, Joachim). 

175See DTCC II at 24 (‘‘A six month period seems 

appropriate’’); ISDA IV at 2 (expressing support for 

a six-month implementation period, provided that 

Regulation SBSR aligns closely with the CFTC’s 

swap data reporting rules and requesting a ninemonth implementation period if Regulation SBSR 

deviates from the CFTC’s swap data reporting 

rules). 

176See DTCC II at 25 (noting that because credit 

products’ operational processes are more highly 

automated, credit products are more reportingready than equities products); SIFMA II at 5; UBS 

Letter at 2 (stating that the initial phase of public 

security-based swap reporting for single-name CDS 

be limited to CDS on the top 125 most actively 

traded reference entities). 

177See Implementation Roundtable, Day 1 at 32 

(unidentified speaker), 43 (Thompson). See also 

Implementation Roundtable, Day 2 at 168, 173 

(Collazo) (suggesting implementation in the 

following order: CDS, interest rate swaps, FX 

swaps, equity swaps, then commodity-based 

swaps). 

178See Barclays I at 4. 

179See Implementation Roundtable, Day 2 at 159 

(Okochi) (stating that implementation will vary 

based on clearing of trades, customization of trades 

based on the business segment they are in, asset 

class, and volume); 183–84 (Thum) (stating that 

reporting by non-dealers will require additional 

work), 192–94 (Gooch) (stating that inclusion of 

timestamps, place of execution, subfund allocations 

will require additional configurations to existing 

systems and processes to support real-time 

reporting). 

180See Implementation Roundtable, Day 1 at 77 

(Olesky). 

181See Cleary I at 20. The Commission notes that 

the referenced study was completed on April 7, 

2011. See Securities Exchange Act Release No. 

63423 (December 2, 2010), 75 FR 76706 (December 

9, 2010). See also http://www.sec.gov/news/studies/ 

2011/719b-study.pdf (noting that current 

technology is capable of representing derivatives 

using a common set of computer-readable 

descriptions). 

182See Implementation Roundtable, Day 1 at 51 

(Cawley). 

affected parties were clear, sufficient, 

and achievable.164 Another commenter 

recommended the adoption of an 

incremental approach to reporting that 

would begin with ‘‘macro’’ reporting 

followed by more comprehensive 

reporting at a later time.165

Several commenters also 

recommended that the Commission 

utilize a gradual implementation 

approach similar to that of the TRACE 

trade reporting system. One 

commenter—the Financial Industry 

Regulatory Association (‘‘FINRA’’), 

which operates the TRACE trade 

reporting system for fixed income 

securities—supported proposed Rule 

910’s approach of staggered 

implementation of various requirements 

under Regulation SBSR, noting that it 

had implemented TRACE reporting in 

phases based on product liquidity, 

beginning with the largest and most 

liquid issues.166 FINRA stated that 

phased-in implementation would 

facilitate a more orderly transition that 

minimizes the likelihood of market 

disruptions and an unintended loss of 

liquidity, and would provide market 

participants with time to adjust to a 

market in which security-based swap 

transaction data were publicly 

known.167 Other commenters also 

expressed the view that TRACE is a 

useful model of a phased-in approach to 

implementation.168 One of these 

commenters stated, for example, that the 

‘‘TRACE experience demonstrates the 

length of time required to study, review 

and assess the effects of real-time 

reporting on market liquidity, as well as 

the need to provide adequate lead time 

for market participants to build a 

common infrastructure for 

reporting.’’ 169 Another commenter 

believed that Regulation SBSR would 

require, at a minimum, an 

implementation period similar to the 

four years required to implement 

TRACE, ‘‘given that the swap markets 

are significantly more complex and 

varied and less developed 

infrastructurally than the corporate 

bond markets.’’ 170

While one participant at the 

Implementation Roundtable suggested 

that certain asset classes could need less 

than six months for implementation,171

several others stated that the time 

needed for implementation depended 

on the complexity of the asset class and 

believed that more time than the 

implementation schedule in Regulation 

SBSR, as initially proposed, would 

likely be necessary.172 Another 

participant believed that it could take 

up to two years following the adoption 

of final rules to implement the new 

rules because of ‘‘the substantial effort 

required to conduct the renegotiation of 

tens of thousands of contracts between 

customers and counterparties.’’ 173

However, several participants at the 

Implementation Roundtable suggested 

that six to nine months would be 

needed for implementation following 

adoption of final rules by the SEC and 

CFTC.174 Similarly, two commenters 

indicated that market participants 

would require an implementation 

period of at least six months following 

the adoption of final rules.175

Several commenters also discussed 

general and specific implementation 

issues that might arise in the context of 

implementing Regulation SBSR. Some 

commenters,176 along with several 

participants at the Implementation 

Roundtable,177 supported phasing in 

implementation by asset class. Because 

different asset classes use different and 

often incompatible booking systems, 

one commenter recommended that both 

reporting to SDRs and public 

dissemination be phased in by asset 

class to allow market participants to 

work within the current market setup.178 Other Roundtable participants 

did not specify the amount of time that 

they believed would be required for 

implementation and instead noted 

various implementation concerns.179

One commenter stated that the CFTC 

and SEC should synchronize 

compliance dates for their respective 

reporting rules as much as possible.180

Another commenter, noting that the 

CFTC and the Commission are 

undertaking a Dodd-Frank mandated 

study regarding the feasibility of 

standardized computer-readable 

algorithmic descriptions for derivatives, 

believed that it would be premature to 

adopt reporting rules before the 

completion of this study and 

consideration of its results.181 One 

Roundtable participant recommended 

setting an implementation date and 

establishing consequences for failure to 

meet the implementation date.182

The Commission notes the concerns 

about implementation expressed by 

commenters. However, it is the 

Commission’s understanding that the 

industry has made considerable 

progress in improving reporting 

capability, which will facilitate 

compliance with Regulation SBSR. The 

CFTC already has adopted final rules for 

swap data repository registration, 

regulatory reporting, and public 

dissemination of swaps, and market 


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183The CFTC phased in compliance requirements 

for swap data reporting (depending on the reporting 

party and asset class) beginning on December 31, 

2012. See CFTC Division of Market Oversight 

Advisory (March 8, 2013) at 2–3, available at 

http://www.cftc.gov/ucm/groups/public/@

newsroom/documents/file/dmoadvisory030813.pdf 

(last visited on October 30, 2014). 

184One commenter recommended that preenactment and transitional security-based swaps 

should be reported on the same timeline, as firms’ 

systems cannot easily distinguish between the two 

categories. See ISDA IV at 18. The Commission 

notes that the proposed compliance schedule would 

provide for this outcome. This commenter further 

stated that reporting entities have found it practical 

to report ‘‘live’’ historical security-based swaps in 

advance of the effective reporting date applicable to 

new transactions and life cycle reporting, and 

recommended an aligned reporting effective date 

for historical security-based swaps that are still live, 

or expected to be live, as of the reporting effective 

date. However, the commenter recommended that 

historical security-based swaps that are no longer 

live should have a later reporting effective date than 

reporting for other security-based swaps, and 

recommends a year delay. See id. Under the 

proposed compliance schedule, all historical 

security-based swaps in an asset class would be 

required to be reported in the same timeframe as 

for new security-based swaps going forward—i.e., 

by six months from the date of operation of the first 

registered SDR that can accept security-based swaps 

in the asset class. The Commission is not proposing 

a longer reporting period for historical securitybased swaps that are not ‘‘live,’’ but requests 

comment on the issue. 

185See Institutional Investors Letter at 3 (‘‘market 

infrastructure must be in place prior to requiring 

market participant compliance’’); Cleary I at 19 (any 

implementation timeline ‘‘must recognize the 

practical challenges that security-based swap data 

repositories and market participants will face in 

defining and implementing industry-wide 

collection and dissemination mechanisms and 

internal data collection systems, respectively.’’); 

DTCC II at 25 (noting that although much of the 

existing infrastructure of DTCC’s Trade Information 

Warehouse could form the core of the processes 

required by Regulation SBSR, substantial new 

industry-wide processes requiring significant 

coordination, testing, and development would have 

to be implemented, particularly around real-time 

reporting). 

186See ISDA IV at 2–3. 

187 In the Cross-Border Adopting Release, the 

Commission estimated the assessment costs for 

making such evaluations. See Cross-Border 

Adopting Release, 79 FR 47330–34. The 

Commission’s approach in Regulation SBSR is 

consistent with the approach described in the 

Cross-Border Adopting Release, where the 

Commission noted that security-based swap dealers 

and major security-based swap participants ‘‘will 

not be subject to the requirements applicable to 

those dealers and major participants until the dates 

provided in the applicable final rules.’’ 79 FR 

47368. See also Intermediary Definitions Adopting 

Release, 77 FR 30700. 

participants have been reporting to 

CFTC-registered SDRs since year-end 

2012.183 The Commission preliminarily 

believes that much of the established 

infrastructure that supports swap 

reporting and dissemination can be 

modified to support security-based 

swap reporting and dissemination. At 

the same time, the Commission 

recognizes that there are certain 

differences in the reporting 

requirements of the SEC and the CFTC; 

therefore, entities subject to Regulation 

SBSR will need time to meet the 

regulation’s specific requirements. 

The Commission preliminarily agrees 

with those commenters who suggested 

that the Commission generally model 

the implementation of Regulation SBSR 

after the implementation of TRACE, and 

has designed the newly proposed 

compliance schedule to allow 

participants and registered SDRs the 

benefit of phased-in compliance. The 

Commission also is aware of the need 

for extensive testing and preparation in 

the implementation of the systems 

necessary to meet the requirements of 

Regulation SBSR and has developed the 

proposed compliance schedule with 

such needs in mind. The proposed 

schedule, discussed above, provides for 

a six-month period from the date on 

which the first registered SDR that 

accepts security-based swaps in a 

particular asset class commences 

operations as a registered SDR. By the 

end of that six-month period, to the 

extent such information is available, all 

pre-enactment and transitional securitybased swaps in that asset class would be 

required to be reported.184 Furthermore, 

market participants would have six 

months from the commencement of 

operations of the first registered SDR 

that can accept security-based swaps in 

a particular asset class as a registered 

SDR before reporting of newly executed 

transactions in that asset class would be 

required. Although a registered SDR 

may already be operational as swap data 

repository under CFTC rules, to the 

extent there is a gap between the 

Commission’s grant of registration and 

the SDR’s commencement of operations 

as a registered SDR, the Commission 

wants to ensure that reporting parties 

have six months after a registered SDR 

commences operations as a registered 

SDR in a particular asset class to further 

test and implement processes for 

reporting security-based swap 

transaction information in that asset 

class. The Commission preliminarily 

believes that six months would provide 

affected persons with sufficient time to 

resolve any potential issues related to 

the reporting of security-based swap 

transactions on an individual basis. 

Under the proposed compliance 

schedule, there would then be an 

additional three months before 

transactions must be publicly 

disseminated. This period is designed to 

give registered SDRs and persons having 

a duty to report an opportunity to 

resolve any reporting issues before 

transactions must be publicly 

disseminated. 

Although several commenters 

advocated for longer timeframes, the 

Commission preliminarily believes that 

six months between the commencement 

of operations of the first registered SDR 

in an asset class as a registered SDR and 

the commencement of mandated tradeby-trade reporting is sufficient. The 

Commission bases this view on the 

existence of market infrastructure that 

supports swap data reporting pursuant 

to CFTC rules. Several commenters 

noted that challenges related to the 

implementation of the reporting and 

dissemination requirements of proposed 

Regulation SBSR were related to lack of 

appropriate industry infrastructure and 

processes.185 As noted above, the 

Commission understands that persons 

seeking to register as SDRs are likely to 

be registered and operating as swap data 

repositories under CFTC rules, and that 

many swap market participants subject 

to CFTC reporting rules may also be 

security-based swap market 

participants. Therefore, the Commission 

preliminarily believes that these persons 

and market participants would be able 

to leverage existing infrastructure to 

report and disseminate security-based 

swap data. 

The Commission also preliminarily 

believes that it is unnecessary to delay 

the implementation of Regulation SBSR 

until registration requirements take 

effect for security-based swap dealers 

and major security-based swap 

participants, as suggested by one 

commenter.186 As described in Section 

V(B)(1) of the Regulation SBSR 

Adopting Release, the Commission has 

adopted a modified version of the 

security-based swap reporting hierarchy 

in Rule 901(a)(2) to ensure that no 

person will need to evaluate whether it 

meets the definition of ‘‘security-based 

swap dealer’’ or ‘‘major security-based 

swap participant’’ solely in connection 

with identifying which counterparty 

must report a security-based swap under 

Regulation SBSR.187 Under the 

reporting hierarchy as adopted, until 

registration requirements come into 

effect, there will be no registered 

security-based swap dealers or major 

security-based swap participants, so the 

sides will be required to select the 

reporting side. The Commission 

preliminarily believes that having the 

sides choose who reports should not 

complicate reporting. 

The Commission preliminarily 

believes that it is not necessary or 

appropriate to establish multiple or 

phased compliance dates for reporting 

security-based swaps within the same 


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188See Roundtable Letter at 4 (stating that market 

participants could initially prepare reports 

indicating the aggregate notional amount of swaps 

outstanding, subdivided by major category, and the 

identity of any counterparty representing 5% or 

more of their open positions by notional amount in 

that major category). 

189This timeframe generally comports with the 

recommendation of several of the participants at the 

Implementation Roundtable, who suggested that six 

to nine months would be needed for 

implementation following adoption of final rules by 

the SEC and CFTC. See Implementation 

Roundtable, Day 1 at 264 (Levi), 298 (Gooch); 

Implementation Roundtable, Day 2 at 174–8 

(Collazo, Cummings, Joachim). 

190Rule 911, as proposed, was designed to 

prevent evasion of the public dissemination 

requirement during a period when two or more 

SDRs had registered with the Commission and were 

operating under different compliance dates. 

191See Barnard I at 4. 

192See MFA I at 6 (also arguing that a diverse 

range of options for reporting security-based swap 

data would benefit the market and market 

participants). See also ISDA IV at 3 (recommending 

that the Commission have a single registration date 

for all SDRs that will be approved ahead of the 

effective reporting date to ‘‘ensure that all market 

participants have equal time to build to their 

chosen [SDR]’’). 

193See, e.g., S. Comm. on Banking, Hous., & 

Urban Affairs, The Restoring American Financial 

Stability Act of 2010, S. Rep. No. 111–176, at 32 

(‘‘As a key element of reducing systemic risk and 

protecting taxpayers in the future, protections must 

include comprehensive regulation and rules for 

how the OTC derivatives market operates. 

Increasing the use of central clearinghouses, 

exchanges, appropriate margining, capital 

requirements, and reporting will provide safeguards 

for American taxpayers and the financial system as 

a whole’’). 

194See Rule 13n–4(c)(1)(iii) under the Exchange 

Act, discussed in the SDR Adopting Release. 

195See Rule 13n–4(c)(1)(i) under the Exchange 

Act, discussed in the SDR Adopting Release. 

196However, as the Commission noted in the SDR 

Adopting Release: ‘‘In considering initial 

applications for registration on Form SDR filed 

contemporaneously with the Commission, the 

Commission intends to process such applications 

for multiple SDRs accepting [security-based swap] 

transaction data from the same asset classes within 

the same period of time so as to address 

competition concerns that could arise if such SDRs 

were granted registration at different times.’’ SDR 

Adopting Release, Section VI(A)(2)(c). The 

Commission also noted that certain unexpected 

events that raise compliance concerns could affect 

the Commission’s ability to process these 

applications within the same time period. See id. 

asset class to registered SDRs.188

Preliminarily, the Commission seeks to 

have all regulatory reports of securitybased swaps reported to registered SDRs 

in the manner set forth in Regulation 

SBSR at the earliest practicable date. 

This information would greatly increase 

relevant authorities’ understanding of 

the security-based swap market, help 

them perform their regulatory duties, 

and provide more and better data to 

support the Commission’s additional 

Title VII rulemakings. For example, 

with required regulatory reporting of all 

security-based swaps in an asset class, 

the Commission and other relevant 

authorities would be able to more easily 

determine the positions of securitybased swap dealers, giving them greater 

visibility into possible systemic risks. 

Phased compliance within a securitybased swap class would not provide a 

holistic view of dealer positions until 

the final security-based swaps in that 

asset class were required to be reported. 

However, the Commission is 

proposing a separate compliance date 

(proposed Compliance Date 2) for public 

dissemination. The three-month delay 

between the date on which persons with 

a duty to report must begin reporting 

new security-based swaps to a registered 

SDR and the date on which the 

registered SDR must publicly 

disseminate transaction reports is 

designed to provide ample time for 

registered SDRs and market participants 

to identify and address any problems 

with trade-by-trade reporting to 

registered SDRs before registered SDRs 

are required to publicly disseminate 

newly executed transactions.189

One commenter agreed with the 

requirements of proposed Rule 911 190

and believed that they were sufficient to 

prevent the evasion of reporting.191 The 

Commission continues to be concerned 

with potential efforts to evade public 

dissemination, but believes that Rule 

911 is not necessary in light of the 

proposed new compliance timeframes. 

Another commenter believed that the 

Commission should delay the 

implementation of Regulation SBSR 

until more than one SDR is registered 

because, absent such a delay, the first 

SDR to register would have a monopoly 

on security-based swap reporting and a 

competitive advantage over new 

entrants.192 The Commission 

preliminarily believes instead that a 

delay in implementation to permit 

additional registrations would be 

inconsistent with the objectives of Title 

VII. Title VII closed major gaps in the 

regulation of security-based swaps and 

provided the Commission and other 

relevant authorities with new regulatory 

tools to oversee the OTC derivatives 

markets, which are large and are capable 

of affecting significant sectors of the 

U.S. economy. The primary goals of 

Title VII include increasing 

transparency in the security-based swap 

markets and reducing the potential for 

counterparty and systemic risk.193

Furthermore, other Commission rules 

are designed to minimize the potential 

that any a ‘‘first mover’’ or monopoly 

advantage that the first SDR might 

burden users of SDR services. All SDRs, 

even the only SDR that can accept 

transactions in a particular asset class, 

must offer fair, open, and not 

unreasonably discriminatory access to 

users of its services,194 and any fees that 

it charges must be fair and reasonable 

and not unreasonably discriminatory.195

The Commission preliminarily believes 

that basing the compliance schedule on 

the date that the first registered SDR 

commences operations as a registered 

SDR would encourage all potential 

SDRs to file complete applications for 

registration to the Commission and 

develop their systems and procedures 

for accepting and maintaining securitybased swap data as expeditiously as 

possible, which will in turn more 

quickly allow regulators and the public 

the benefit of increased transparency in 

the security-based swap market and 

allow them to better monitor systemic 

risk. 

Given these potential benefits, the 

Commission preliminarily believes that 

the compliance schedule should begin 

even if only one registered SDR that can 

receive reports of transactions in a 

particular asset class has commenced 

operations. The Commission 

preliminarily believes that it is not 

necessary or appropriate to wait for 

multiple SDRs to register and 

commence operations as registered 

SDRs before beginning the proposed sixmonth countdown to proposed 

Compliance Date 1.196 The Commission 

seeks to ensure that registration of new 

SDRs not delay post-trade transparency 

for security-based swaps. This could 

occur if the Commission were to phase 

in compliance on an SDR-by-SDR basis. 

If each registered SDR had its own 

phase-in period, the first registered SDR 

could be in a phase where public 

dissemination was required where the 

second registered SDR may not be. This 

could create an incentive for persons 

with a duty to report to choose to report 

to later-registering SDRs in order to 

avoid having their transactions publicly 

disseminated. 

D. Request for Comment 

The Commission requests comment 

on all aspects of the proposed 

compliance dates for Regulation SBSR. 

In particular: 

41. Would the proposed compliance 

timeline allow reporting parties and 

registered SDRs sufficient time to 

implement the requirements of 

Regulation SBSR? Why or why not? If 

not, why not and what alternative time 

period(s) of time would be sufficient? 

42. Do you generally agree with the 

Commission’s proposed approach to 

calculating the compliance dates based 

on the first registered SDR to accept 

security-based swaps in a particular 

asset class commencing operations as a 

registered SDR? If not, how should the 


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197See ISDA IV at 18 and supra note 184. 

198See supra notes 15 and 16 and accompanying 

text. 

Commission calculate compliance 

dates? If the Commission used an 

alternative method for calculating 

compliance dates, how could the 

Commission prevent or minimize 

evasion of the public dissemination 

requirement? 

43. Do you believe that the proposed 

implementation schedule and SDR 

registration process would minimize 

potential ‘‘first mover’’ advantages for 

the first SDR to register? Why or why 

not? How could the Commission further 

minimize any potential ‘‘first mover’’ 

advantage? 

44. Do you agree that the current 

infrastructure that supports swap 

reporting also can be used to support 

security-based swap reporting? Why or 

why not? If so, how much time would 

be necessary for participants and 

registered SDRs to make necessary 

changes to report security-based swaps 

to registered SDRs? If not, how much 

time would be needed to create the 

necessary infrastructure? 

45. Do you believe that registered 

SDRs would be able to satisfy their 

obligations by proposed Compliance 

Date 1? Why or why not? If six months 

after the first registered SDR that accepts 

security-based swaps in a particular 

asset class commences operations as a 

registered SDR is not a sufficient 

amount of time to comply, what amount 

of time would be sufficient? In 

particular, do you believe that six 

months after the first registered SDR 

that accepts security-based swaps in an 

asset class commences operations is a 

sufficient amount of time to have 

reported all historical security-based 

swaps that are no longer ‘‘live,’’ as 

discussed by one commenter? 197 Why 

or why not? If not, by when do you 

believe that such security-based swaps 

should be reported, and why? 

46. Do you believe that persons with 

the duty to report would be able to 

satisfy their obligations by proposed 

Compliance Date 1? Why or why not? If 

six months after the first registered SDR 

that accepts security-based swaps in a 

particular asset class commences 

operations as a registered SDR is not a 

sufficient amount of time to comply, 

what amount of time would be 

sufficient? Would persons with the duty 

to report require additional time to 

comply with certain requirements by 

proposed Compliance Date 1? If so, 

which requirement(s), and what 

additional amount of time would be 

necessary? 

47. Do you agree with the 

Commission’s proposal to extend the 

exemption for the reporting of preenactment security-based swaps until 

six months after an SDR that is capable 

of receiving security-based swaps in that 

asset class is registered by the 

Commission and has commenced 

operations as a registered SDR? Why or 

why not? 

48. Do you agree with the 

Commission’s proposal to terminate the 

exemption from Section 29(b) of the 

Exchange Act in connection with 

Section 3C(e)(1) on proposed 

Compliance Date 1? Why or why not? If 

not, when should the Section 29(b) 

exemption terminate? 

49. Do you believe that registered 

SDRs will be able to time stamp and 

assign transaction IDs to pre-enactment 

and transitional security-based swaps 

even if they are reported prior to 

Compliance Date 1? Why or why not? If 

not, would registered SDRs require 

additional time to comply with the 

requirements to time stamp and/or 

assign transaction IDs? 

50. Do you believe that registered 

security-based swap dealers, registered 

major security-based swap participants, 

registered clearing agencies, and 

platforms would be able to satisfy their 

obligations to establish policies and 

procedures for carrying out their 

reporting obligations by proposed 

Compliance Date 1? Why or why not? If 

six months after the first registered SDR 

that accepts security-based swaps in a 

particular asset class commences 

operations as a registered SDR is not a 

sufficient amount of time to comply, 

what amount of time would be 

sufficient? 

51. Do you believe that registered 

SDRs would be able to satisfy their 

obligations by proposed Compliance 

Date 2? Why or why not? If nine months 

after the first registered SDR that accepts 

security-based swaps in a particular 

asset class commences operations as a 

registered SDR is not a sufficient 

amount of time to comply, what amount 

of time would be sufficient? 

52. Do commenters agree with the 

Commission’s preliminary belief that 

persons likely to apply for registration 

as SDRs with the Commission would 

already be registered with the CFTC as 

swap data repositories? If so, how easily 

and how quickly could the systems and 

processes that support swap data 

dissemination be configured to support 

security-based swap data 

dissemination? Would this process will 

take more or less than the 3 months that 

is proposed? Why or why not? 

53. Registered clearing agencies may 

be required to modify their rules to 

address their reporting obligations 

under Regulation SBSR, as proposed to 

be modified in this release. Would the 

implementation timeframe described 

above provide registered clearing 

agencies sufficient time to implement 

any rule changes that may be required 

by Regulation SBSR? How would the 

timing be affected if the registered 

clearing agency also intends to register 

as an SDR or is affiliated with a person 

that intends to register as an SDR? 

VIII. Economic Analysis 

The Dodd-Frank Act amended the 

Exchange Act to require the reporting of 

security-based swap transactions to 

registered SDRs. Regulation SBSR, as 

adopted, implements this mandate and 

assigns the reporting obligation for 

covered transactions.198 In addition, 

Regulation SBSR requires registered 

SDRs, with a handful of exceptions, to 

publicly disseminate a subset of the 

reported transaction information 

immediately upon receipt. 

The proposed amendments to Rule 

901(a) would assign to a platform the 

duty to report security-based swaps 

executed on its facilities and submitted 

for clearing, and would assign the duty 

to report any transactions to which a 

registered clearing agency is a 

counterparty to that clearing agency. In 

addition, this release proposes guidance 

for how Regulation SBSR would apply 

to security-based swaps executed in 

connection with prime brokerage 

arrangements, which involve an 

executing broker, a customer, and a 

prime broker who offers credit 

intermediation services to the customer. 

This release also proposes a definition 

of ‘‘widely accessible’’ in Rule 900(tt), 

which would have the effect of 

prohibiting registered SDRs from 

charging users fees or imposing usage 

restrictions on the security-based swap 

transaction data that they are required to 

publicly disseminate. Finally, this 

release proposes new compliance dates 

for the rules in Regulation SBSR for 

which the Commission has not specified 

a compliance date. 

The Commission is sensitive to the 

economic consequences and effects, 

including costs and benefits, of its rules. 

Some of these costs and benefits stem 

from statutory mandates, while others 

are affected by the discretion exercised 

in implementing these mandates. The 

following economic analysis seeks to 

identify and consider the benefits and 

costs—including the effects on 

efficiency, competition, and capital 

formation—that would result from the 

proposed rules and rule amendments. 

The costs and benefits considered in 

relation to these proposed rules and rule 


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199See Regulation SBSR Adopting Release, 

Section XXII. 

200See Cross-Border Adopting Release, 79 FR 

47285. 

201These effects, as they relate specifically to the 

proposed rules and amendments, as well as 

alternative approaches, are discussed in in Section 

VIII(D), infra. 

202These requirements might reduce the price 

elasticity of demand for the services provided by 

platforms, registered clearing agencies, and 

registered SDRs. 203See infra Section IX(B). 

amendments have informed the policy 

choices described throughout this 

release. 

A. Broad Economic Considerations 

In the Regulation SBSR Adopting 

Release, the Commission highlighted 

certain overarching effects on the 

security-based swap markets that it 

believes will result from the adoption of 

Regulation SBSR. These benefits could 

include, generally, improved market 

quality, improved risk management, 

greater efficiency, and improved 

oversight by the Commission and other 

relevant authorities.199 Regulation 

SBSR, as adopted, requires market 

participants to make infrastructure 

investments in order to report securitybased swap transactions to registered 

SDRs and, as is most relevant for these 

proposed rules and amendments, for 

SDRs to make investments in order to 

receive transaction data from market 

participants and to publicly disseminate 

a subset of that transaction information. 

The rules, amendments, and guidance 

proposed in this release are focused on 

the requirements relevant to the 

reporting of certain information 

regarding cleared security-based swaps, 

which will affect the platforms, 

registered clearing agencies, and 

registered SDRs that constitute an 

infrastructure for the security-based 

swap market and provide services to 

counterparties who participate in 

security-based swap transactions. In 

particular, the Commission 

preliminarily believes that the proposed 

rules and amendments could affect the 

manner in which firms that provide 

these services compete with one another 

and exercise market power over 

security-based swap counterparties. In 

turn, there could be implications for the 

counterparties who are customers of 

these infrastructure providers and the 

security-based swap market generally. 

1. Security-Based Swap Market 

Infrastructure 

Title VII requires the Commission to 

create a new regulatory regime for the 

security-based swap market that 

includes trade execution, central 

clearing, and reporting requirements 

aimed at increasing transparency and 

customer protection as well as 

mitigating the risk of financial 

contagion.200 These new requirements, 

once implemented, will oblige market 

participants, who may have previously 

engaged in bilateral transaction activity 

without any need to engage third-party 

service providers, to interface with 

platforms, registered clearing agencies, 

and registered SDRs. 

As a general matter, rules that require 

regulated parties to obtain services can 

have a material impact on the prices of 

those services in the absence of a 

competitive market for those services. In 

particular, if service providers are 

monopolists or otherwise have market 

power, requiring market participants to 

obtain their services can potentially 

allow the service providers to increase 

the profits they earn from providing the 

required services.201 Because Title VII 

requires the Commission to implement 

rules requiring market participants to 

use the services provided by platforms, 

registered clearing agencies, and 

registered SDRs, these requirements 

could reduce the sensitivity of demand 

to changes in prices or quality of the 

services of firms that create and develop 

security-based swap market 

infrastructure.202 As such, should 

security-based swap infrastructure 

providers—such as platforms, registered 

clearing agencies, and registered SDRs— 

enjoy market power, they might be able 

to change their prices or service quality 

without a significant effect on demand 

for their services. In turn, these changes 

in prices or quality could have effects 

on activity in the security-based swap 

market. 

As discussed below, the proposed 

rules, amendments, and guidance 

proposed herein could have an impact 

on the level of competition among 

suppliers of trade reporting services and 

affect the relative bargaining power of 

suppliers and consumers in determining 

the prices of those services. In 

particular, when the supply of trade 

reporting services is concentrated 

among a small number of firms, 

consumers of these services have few 

alternative suppliers from which to 

choose. Such an outcome could limit 

the incentives to produce more efficient 

trade reporting processes and services 

and could, in certain circumstances, 

result in less security-based swap 

transaction activity than would 

otherwise be optimal. In the case of 

security-based swap transaction activity, 

these welfare losses could result from 

higher costs to counterparties for 

hedging financial or commercial risks. 

2. Competition Among Security-Based 

Swap Infrastructure Providers 

The Commission’s economic analysis 

of the proposed rules, amendments, and 

guidance considers how the competitive 

landscape for platforms, registered 

clearing agencies, and registered SDRs 

might affect the market power of these 

entities and hence the level and 

allocation of costs related to regulatory 

requirements. Some of the factors that 

may influence this competitive 

landscape have to do with the nature of 

the trade reporting and are unrelated to 

regulation, while others may be a result 

of, or influenced by, the rules that we 

are proposing. To the extent that the 

proposed rules inhibit competition 

among infrastructure providers, this 

could result in fees charged to 

counterparties that deviate from the 

underlying costs of providing the 

services. 

As a general matter, and for reasons 

unrelated to the regulation of the 

security-based swap market, trade 

execution, clearing, and reporting 

services are likely to be concentrated 

among a small number of providers. For 

example, SDRs and clearing agencies 

must make significant infrastructure and 

human capital investments to enter their 

respective markets, but once these startup costs are incurred, the addition of 

data management or transaction clearing 

services is likely to occur at low 

marginal costs. As a result, the average 

cost to provide infrastructure services 

quickly falls for SDRs and clearing 

agencies as their customer base grows, 

because they are able to amortize the 

fixed costs associated with serving 

counterparties over a larger number of 

transactions. These economies of scale 

should favor incumbent service 

providers who can leverage their market 

position to discourage entry by potential 

new competitors that face significant 

fixed costs to enter the market. As a 

result, the markets for clearing services 

and SDR services are likely to be 

dominated by a small number of firms 

that each have large market share, 

which is borne out in the current 

security-based swap market.203

Competition among registered 

clearing agencies and registered SDRs 

could also be influenced by the fact that 

security-based swap market participants 

incur up-front costs for each connection 

that they establish with an SDR or 

clearing agency. If these costs are 

sufficiently high, an SDR or clearing 

agency could establish itself as an 

industry leader by ‘‘locking-in’’ 

customers who are unwilling or unable 


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204See Joseph Farrell and Paul Klemperer, 

‘‘Coordination and Lock-in: Competition with 

Switching Costs and Network Effects,’’ in 

Handbook of Industrial Organization, Mark 

Armstrong and Robert Porter (ed.) (2007), at 1,972. 

The authors describe how switching costs affect 

entry, noting that, on one hand, ‘‘switching costs 

hamper forms of entry that must persuade 

customers to pay those costs’’ while, on the other 

hand, if incumbents must set a single price for both 

new and old customers, a large incumbent might 

focus on harvesting its existing customer base, 

ceding new customers to the entrant. In this case, 

a competitive market outcome would be 

characterized by prices for services that equal the 

marginal costs associated with providing services to 

market participants. 

205See Regulation SBSR Adopting Release at note 

1250. 

206A registered clearing agency expanding to 

provide SDR services is an example of forward 

vertical integration. In the context of these proposed 

rules and amendments, SDRs ‘‘consume’’ the data 

supplied by registered clearing agencies. Clearing 

agencies engage in forward vertical integration by 

creating or acquiring the SDRs that consume the 

data that they produce as a result of their clearing 

business. 

to make a similar investment for 

establishing a connection with a 

competitor.204 An SDR or clearing 

agency attempting to enter the market or 

increase market share would have to 

provide services valuable enough, or set 

fees low enough, to offset the costs of 

switching from a competitor. In this 

way, costs to security-based swap 

market participants of interfacing with 

market infrastructure could serve as a 

barrier to entry for firms that would like 

to provide market infrastructure services 

provided by SDRs and clearing agencies. 

The proposed rules, amendments, and 

guidance might also influence the 

competitive landscape for firms that 

provide security-based swap market 

infrastructure. Fundamentally, requiring 

the reporting of security-based swap 

transactions creates an inelastic demand 

for the service that would not be present 

if not for regulation. This necessarily 

reduces a counterparty’s ability to 

bargain with infrastructure service 

providers over price or service because 

the option of not reporting is 

unavailable. Moreover, infrastructure 

requirements imposed by Title VII 

regulation will increase the fixed costs 

of an SDR operating in the securitybased swap market and increase the 

barriers to entry into the market, 

potentially discouraging firms from 

entering the market for SDR services. 

For example, under Rule 907, as 

adopted, registered SDRs are required to 

establish and maintain certain written 

policies and procedures. The 

Commission estimated that this 

requirement will impose initial costs on 

each registered SDR of approximately 

$12,250,000.205

The proposed rules, amendments, and 

guidance might also affect the 

competitive landscape by increasing the 

incentives for security-based swap 

infrastructure service providers to 

integrate horizontally or vertically. As a 

general matter, firms engage in 

horizontal integration when they 

expand their product offerings to 

include similar goods and services or 

acquire competitors. For example, SDRs 

that presently serve the swap market 

might horizontally integrate by offering 

similar services in the security-based 

swap market. Firms vertically integrate 

by entering into businesses that supply 

the market that they occupy (‘‘backward 

vertical integration’’) or by entering into 

businesses that they supply (‘‘forward 

vertical integration’’). 

As discussed in more detail in Section 

VIII(D)(1), infra, while proposing a 

reporting methodology that assigns 

reporting responsibilities to registered 

clearing agencies, who will hold the 

most complete and accurate information 

for cleared transactions, could minimize 

potential data discrepancies and errors, 

rules that give registered clearing 

agencies discretion over where to report 

transaction data could provide 

incentives for registered clearing 

agencies to create affiliate SDRs and 

compete with other registered SDRs for 

post-trade reporting services. The cost to 

a clearing agency of entering the market 

for SDR services is likely to be low, 

given that many of the infrastructure 

requirements for entrant SDRs are 

shared by clearing agencies. Clearing 

agencies already have the infrastructure 

necessary for capturing transaction 

records from clearing members and 

might be able to leverage that preexisting infrastructure to provide 

services as an SDR at low incremental 

cost. Because all clearing transactions, 

like all other security-based swaps, must 

be reported to a registered SDR, there 

would be a set of potentially captive 

transactions that clearing agencies could 

initially use to vertically integrate into 

SDR services.206

Entry into the SDR market by 

registered clearing agencies could 

potentially lower the cost of SDR 

services if clearing agencies are able to 

transmit data to an affiliated SDR at a 

lower cost relative to transmitting the 

same data to an independent SDR. The 

Commission preliminarily believes that 

this is likely to be true for clearing 

transactions, given that the clearing 

agency and affiliate SDR would have 

greater control over the reporting 

process relative to sending to an 

unaffiliated SDR. Even if registered 

clearing agencies did not enter the 

market for SDR services, their ability to 

pursue a vertical integration strategy 

could motivate incumbent SDRs to offer 

service models that are sufficiently 

competitive to discourage entry by 

registered clearing agencies. 

However, the Commission recognizes 

that the entry of clearing agencyaffiliated SDRs might not necessarily 

result in increased competition among 

SDRs or result in lower costs for SDR 

services. In an environment where 

registered clearing agencies with 

affiliated SDRs have discretion to send 

their clearing transaction data to their 

affiliates, security-based swap market 

participants who wish to submit their 

transactions to clearing may have 

reduced ability to direct the reporting of 

the clearing transaction to an 

unaffiliated SDR. As a result, clearing 

agency-affiliated SDRs would not 

directly compete with unaffiliated SDRs 

on the basis of price or quality, because 

they inherit their clearing agency 

affiliate’s market share. This might 

allow clearing agency incumbents to 

exercise market power through their 

affiliate SDRs relative to stand-alone 

SDRs. 

In summary, the Commission’s 

economic analysis of these proposed 

rules and amendments considers the 

features of the market for infrastructure 

services that support security-based 

swap market participants. The 

Commission acknowledges that the 

allocation of reporting obligations that 

result from these proposed rules and 

amendments could affect the balance of 

competition between different providers 

of infrastructure. As discussed below, 

the effect of these proposed rules and 

amendments on competition between 

infrastructure providers could 

ultimately affect security-based swap 

counterparties. 

B. Baseline 

The Commission’s analysis of the 

economic effects of the proposed rules, 

amendments, and guidance includes in 

its baseline the effects of Regulation 

SBSR, as adopted, and the SDR core 

principles and registration rules, as 

adopted in the SDR Adopting Release. 

Hence, the Commission’s analysis of the 

potential impacts of the proposed rules, 

amendments, and guidance takes into 

account the anticipated effects of the 

adoption of Regulation SBSR and the 

SDR rules as described in those releases. 

Furthermore, the overall Title VII 

regulatory framework will have 

consequences for the transaction 

activity addressed by this proposal. For 

example, the scope of future mandatory 

clearing requirements will affect the 

overall costs borne by registered 

clearing agencies, which under the 


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207See 79 FR 47280. 

208See Regulation SBSR Adopting Release, 

Section XXIII(B) (providing additional information 

regarding the OTC derivatives market generally, and 

counterparties specifically). 

209The data available from DTCC–TIW do not 

encompass CDS transactions (1) based on non-U.S. 

reference entities and (ii) where neither 

counterparty is a U.S. person. Commission staff 

quantified the proportion of transaction activity 

included in the DTCC–TIW transaction data. In 

2013, DTCC–TIW reported on its Web site new 

trades in single-name CDSs with gross notional of 

$12.0 trillion. DTCC–TIW provided to the 

Commission data that included only transactions 

with a U.S. counterparty or a U.S. reference entity. 

During the same period, these data included new 

trades with gross notional equaling $9.3 trillion, or 

77% of the total reported by DTCC–TIW. Hence, the 

Commission believes that the DTCC–TIW data 

provide sufficient information to identify the types 

of market participants active in the security-based 

swap market and the general pattern of dealing 

within that market. 

210According to data published by BIS, the global 

notional amount outstanding in equity forwards 

and swaps as of December 2013 was $2.28 trillion. 

The notional amount outstanding in single-name 

CDS was approximately $11.32 trillion, in multiname index CDS was approximately $8.75 trillion, 

and in multi-name, non-index CDS was 

approximately $950 billion. See Semi-annual OTC 

derivatives statistics at end-December 2013 (June 

2014), Table 19, available at http://www.bis.org/

statistics/dt1920a.pdf. For the purposes of this 

analysis, the Commission assumes that multi-name 

index CDS are not narrow-based index CDS and, 

therefore, do not fall within the ‘‘security-based 

swap’’ definition. See Section 3(a)(68)(A) of the 

Exchange Act; Product Definitions Adopting 

Release, 77 FR 48208. The Commission also 

assumes that all instruments reported as equity 

forwards and swaps are security-based swaps, 

potentially resulting in underestimation of the 

proportion of the security-based swap market 

represented by single-name CDS. Based on those 

assumptions, single-name CDS appear to constitute 

roughly 78% of the security-based swap market. 

Although the BIS data reflect the global OTC 

derivatives market and not just the U.S. market, the 

Commission has no reason to believe that these 

ratios differ significantly in the U.S. market. 

211These numbers do not include transactions in 

European corporate single-name CDS that were 

cleared by ICE Clear Credit. However, during the 

sample period, there was only one day (December 

20, 2013) on which there were transactions in 

European corporate single-name CDS that were 

cleared by ICE Clear Credit, and the traded notional 

of these transactions was de minimis. For historical 

data, see https://www.theice.com/marketdata/

reports/99. 

proposal would be obligated to report 

security-based swap transactions that 

arise as a consequence of clearing. 

Similarly, the scope of future mandatory 

trade execution requirements will affect 

the volume of transactions that take 

place on platforms, and ultimately the 

number of transactions that platforms 

would be obligated to report under this 

proposal. Finally, as noted in the CrossBorder Adopting Release,207 the market 

for security-based swaps is global in 

nature and regulatory requirements may 

differ across jurisdictions. To the extent 

that the costs of regulatory requirements 

differ, certain market participants may 

have incentives to restructure their 

operations to avoid regulation under 

Title VII, which generally would reduce 

the number of transactions affected by 

this proposal. 

The following sections provide an 

overview of aspects of the securitybased swap market that are likely to be 

most affected by the proposal, as well as 

elements of the current market 

structure, such as central clearing and 

platform trading, that are likely to 

determine the scope of transactions that 

will be covered by the proposed rules, 

amendments, and guidance.208

1. Current Security-Based Swap Market 

The Commission’s analysis of the 

current state of the security-based swap 

market is based on data obtained from 

DTCC–TIW, especially data regarding 

the activity of market participants in the 

single-name credit default swap 

(‘‘CDS’’) market during the period 2008 

to 2013.209 While other trade 

repositories may collect data on equity 

security-based swaps, the Commission 

currently has no access to detailed data 

about these products (or other products 

that are security-based swaps). As such, 

the Commission is unable to analyze 

security-based swaps other than singlename CDS. However, the Commission 

believes that the single-name CDS data 

are representative of the overall 

security-based swap market and 

therefore can directly inform the 

Commission’s analysis of the securitybased swap market.210

2. Clearing Activity in Single-Name 

Credit Default Swaps 

Currently, there is no regulatory 

requirement in the United States to clear 

security-based swaps. Clearing for 

certain single-name CDS products 

occurs on a voluntary basis. Voluntary 

clearing activity in single-name CDS has 

steadily increased alongside the Title 

VII rulemaking process. As a result, any 

rule that would allocate reporting 

obligations for clearing transactions 

would affect the accessibility of data 

related to a large number of securitybased swap transactions. In addition, 

the size of this part of the market would 

affect the magnitude of the regulatory 

reporting burdens. As of the end of 

2013, ICE Clear Credit accepted for 

clearing security-based swap products 

based on a total of 161 North American 

corporate reference entities, 121 

European corporate reference entities, 

and six individual sovereign (nationstate) reference entities. 

Figure 1, below, shows characteristics 

of new trades in single-name CDS that 

reference North American standard 

corporate ISDA documentation. In 

particular, the figure documents that 

about half of all clearable transactions 

are cleared. Moreover, over the sample 

period, transaction volume accepted for 

clearing increased as a fraction of total 

volume in these products. Analysis of 

trade activity from July 2012 to 

December 2013 indicates that, out of 

$938 billion of notional amount traded 

in North American corporate singlename CDS products that are accepted 

for clearing during the 18 months 

ending December 2013, approximately 

71%, or $666 billion, had characteristics 

making them suitable for clearing by ICE 

Clear Credit and represented trades 

between two ICE Clear Credit clearing 

members. Approximately 79% of this 

notional value, or $525 billion, was 

cleared through ICE Clear Credit, or 

56% of the total volume of new trade 

activity. As of the end of 2013, ICE Clear 

Europe accepted for clearing singlename CDS products referencing a total 

of 136 European corporate reference 

entities. Analysis of new trade activity 

from July 2012 to December 2013 

indicates that, out of Ö531 billion of 

notional amount traded in European 

corporate single-name CDS products 

that are accepted for clearing during the 

18 months ending December 2013, 

approximately 70%, or Ö372 billion had 

characteristics making them suitable for 

clearing by ICE Clear Europe and 

represented trades between two ICE 

Clear Europe clearing members. 

Approximately 51% of this notional 

amount, or Ö191 billion. was cleared 

through ICE Clear Europe, or 36% of the 

total volume of new trade activity.211


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212The Commission prelimdissemination 

requirements of proposed Regulation SBSR were 

related to lack of inarily believes that it is 

reasonable to assume that, when clearing occurs 

within 14 days of execution, counterparties made 

the decision to clear at the time of execution and 

not as a result of information arriving after 

execution. 213See Securities Exchange Act Release No. 

67177 (June 11, 2012), 77 FR 35640 (June 14, 2012) 

(‘‘General Policy on Sequencing’’). 214See Effective Date Release, 76 FR 36306 

(exempting persons that operate a facility for the 

trading or processing of security-based swaps that 

is not currently registered as a national securities 

exchange or that cannot yet register as an SB SEF 

because final rules for such registration have not yet 

been adopted from the requirements of Section 

3D(a)(1) of the Exchange Act until the earliest 

compliance date set forth in any of the final rules 

regarding registration of SB SEFs). A list of SEFs 

that are either temporarily registered with the CFTC 

or whose temporary registrations are pending with 

the CFTC is available at http://sirt.cftc.gov/SIRT/

SIRT.aspx?Topic=SwapExecutionFacilities (last 

visited November 3, 2014). 

215See Cross-Border Adopting Release, 79 FR 

47300. 

216See Securities Exchange Act Release No. 

68080 (October 22, 2012), 77 FR 66265 (November 

2, 2012) (noting that economies of scale can result 

in natural monopolies). See also Craig Pirrong, ‘‘The 

Industrial Organization of Execution, Clearing and 

Settlement in Financial Markets,’’ Working Paper 

(2007), available at http://www.bauer.uh.edu/

spirrong/Clearing_silos.pdf (last visited November 

2, 2014) (discussing the presence of economies of 

scale in central clearing). 

3. Execution Methods in the SecurityBased Swap Market 

The proposed rules and amendments 

address regulatory reporting obligations 

for, among others, security-based swap 

transactions executed on platforms and 

submitted to clearing. While trading in 

security-based swaps is currently 

dominated by bilateral negotiation and 

the use of interdealer brokers, the 

Commission anticipates that future 

rulemaking will address mandatory 

trade execution requirements that will 

likely result in increased incidence of 

trading on platforms.213

4. Current Market Structure for SecurityBased Swap Infrastructure 

a. Exchanges and SB SEFs 

The proposed rules and amendments 

would address how transactions 

conducted on platforms (i.e., national 

securities exchanges and SB SEFs) 

would be required to be reported under 

Regulation SBSR. Currently, there are 

no SB SEFs registered with the 

Commission, and as a result, there is no 

registered SB SEF trading activity to 

report. There are, however, currently 24 

SEFs that are either temporarily 

registered with the CFTC or whose 

temporary registrations are pending 

with the CFTC and currently are exempt 

from registration with the 

Commission.214 As the Commission 

noted in the Cross-Border Adopting 

Release, the cash flows of security-based 

swaps and other swaps are closely 

related and many participants in the 

swap market also participate in the 

security-based swap market.215

Likewise, the Commission preliminarily 

believes that many entities that 

currently act as swap execution 

facilities are likely to also register with 

the Commission as SB SEFs. The 

Commission anticipates that, owing to 

the smaller size of the security-based 

swap market, there will be fewer 

platforms for executing transactions in 

security-based swaps than the 24 SEFs 

reported within the CFTC’s jurisdiction. 

Under proposed Rule 901(a)(1), a 

platform would be required to report to 

a registered SDR any security-based 

swap transactions executed on its 

facilities and submitted to clearing. 

b. Clearing Agencies 

The market for clearing services and 

data reporting services in the securitybased swap market is currently 

concentrated among a handful of firms. 

Table 1 lists the firms that currently 

clear index and single-name CDS and 

identifies the segments of the market 

each firm serves. While there may be 

limited choices available to participants 

interested in cleared index CDS 

transactions, only two firms (albeit with 

the same parent) clear sovereign singlename CDS and only a single firm serves 

the market for North American singlename CDS. Concentration of clearing 

services within a limited set of clearing 

agencies can be explained, in part, by 

the existence of strong economies of 

scale in central clearing.216


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217A current list of single-name and index CDS 

cleared by ICE Clear Credit is available at: https:// 

www.theice.com/publicdocs/clear_credit/ICE_

Clear_Credit_Clearing_Eligible_Products.xls (last 

visited November 3, 2014). 218A current list of single-name and index CDS 

cleared by ICE Clear Europe is available at: https:// 

www.theice.com/publicdocs/clear_europe/ICE_

Clear_Europe_Cleared_Products_List.xls (last 

visited November 3, 2014). 219A current list of products cleared by CME is 

available at: http://www.cmegroup.com/trading/otc/ 

files/otc-cds-product-scope.pdf (last visited 

November 3, 2014). 220A current list of single-name and index CDS 

cleared by LCH.Clearnet is available at: http://www.

lchclearnet.com/documents/731485/762470/

cdsclear+clearable+product+list+%28october+2014

%29.xlsx/b0f514f2-d876-4aa4-9e6b-5b4c76985fb8 

(last visited November 3, 2014). 

221See http://www.isdacdsmarketplace.com/

exposures_and_activity (last visited September 22, 

2014) (describing the function and coverage of 

DTCC–TIW). 

222A list of SDRs provisionally registered with 

the CFTC is available at http://sirt.cftc.gov/sirt/

sirt.aspx?Topic=DataRepositories (last visited 

November 13, 2014). 

223See CME Clearing Rule 1001 (Regulatory 

Reporting of Swap Data); ICE Clear Credit Clearing 

Rule 211 (Regulatory Reporting of Swap Data). 

TABLE 1—CLEARING AGENCIES CURRENTLY CLEARING INDEX AND SINGLE-NAME CDS 

North American European Sovereign Index 

ICE Clear Credit 217 ................................................................................................... X X X X 

ICE Clear Europe 218 ................................................................................................. .......................... X X X 

CME219 ...................................................................................................................... .......................... .................... .................... X 

LCH.Clearnet 220 ........................................................................................................ .......................... X .................... X 

c. SDRs 

The market for data services has 

evolved along similar lines. While there 

is currently no mandatory reporting 

requirement for the single-name CDS 

market, virtually all transactions are 

voluntarily reported to DTCC–TIW, 

which maintains a legal record of 

transactions.221 That there currently is a 

single dominant provider of recordkeeping services for security-based 

swaps is consistent with the presence of 

a natural monopoly for a service that 

involves a predominantly fixed cost 

investment with low marginal costs of 

operation. 

There are currently no SDRs 

registered with the Commission. 

Registration requirements are part of the 

new rules discussed in the SDR 

Adopting Release. In the absence of 

SEC-registered SDRs, the analysis of the 

economic effects of the proposed rules 

and amendments discussed in this 

release on SDRs is informed by the 

experience of the CFTC-registered SDRs 

that operate in the swap market. The 

CFTC has provisionally registered four 

SDRs to accept transactions in swap 

credit derivatives.222

It is reasonable to estimate that a 

similar number of persons provisionally 

registered with the CFTC to service the 

equity and credit swap markets might 

seek to register with the Commission as 

SDRs, and that other persons could seek 

to register with both the CFTC and the 

Commission as SDRs. There are 

economic incentives for the dual 

registration attributed to the fact that 

many of the market participants in the 

security-based swap market also 

participate in the swap market. 

Moreover, once an SDR is registered 

with the CFTC and the required 

infrastructure for regulatory reporting 

and public dissemination is in place, 

the marginal costs for an SDR to also 

register with the Commission, adding 

products and databases and 

implementing modifications to account 

for difference between Commission and 

CFTC rules, will likely to be lower than 

the initial cost of registration with the 

CFTC. 

d. Vertical Integration of Security-Based 

Swap Market Infrastructure 

The Commission has already observed 

vertical integration of swap market 

infrastructure: Clearing agencies have 

entered the market for record-keeping 

services for swaps by provisionally 

registering themselves, or their affiliates, 

as SDRs with the CFTC. Under the 

CFTC swap reporting regime, two 

provisionally registered SDRs are, or are 

affiliated with, clearing agencies that 

clear swaps. These clearing agencies 

have adopted rules providing that they 

will satisfy their CFTC swap reporting 

obligations by reporting to their own, or 

their affiliated, SDR.223 As a result, beta 

and gamma transactions and subsequent 

netting transactions that arise from the 

clearing process are reported by each of 

these clearing agencies to their 

associated SDRs. 

C. Programmatic Costs of Proposed 

Amendments to Regulation SBSR 

1. Proposed Amendments to Rule 901 

Proposed Rule 901(a)(2)(i) would 

provide that the reporting side for a 

clearing transaction is the clearing 

agency that is a counterparty to the 

clearing transaction. Rule 901(a)(3) 

would require any person that has a 

duty to report a security-based swap 

that has been submitted to clearing at a 

registered clearing agency to promptly 

provide that registered clearing agency 

with the transaction ID of the submitted 

security-based swap and the identity of 

the registered SDR to which the 

transaction will be reported or has been 

reported. 

These proposed amendments to Rule 

901 would impose initial and ongoing 

costs on platforms, clearing agencies, 

and reporting sides. The Commission 

preliminarily believes that certain of 

these costs would be a function of the 

number of reportable events and the 

data elements required to be submitted 

for each reportable event. The 

discussion below first highlights those 

burdens and costs related to proposed 

Rule 901(a)(2)(i), followed by burdens 

and costs related to proposed Rule 

901(a)(3). 

a. For Platforms and Registered Clearing 

Agencies—Rule 901(a)(1) and Rule 

901(a)(2)(i) 

The Commission preliminarily 

believes that platforms and registered 

clearing agencies would face the same 

costs that reporting sides face. 

Specifically, platforms and registered 

clearing agencies would have to: (1) 

Develop transaction processing systems; 

(2) implement a reporting mechanism; 

and (3) establish an appropriate 

compliance program and support for the 

operation of the transaction processing 

system. The Commission also 

preliminarily believes that, once a 

platform or registered clearing agency’s 

reporting infrastructure and compliance 

systems are in place, the burden of 

reporting each individual reportable 

event would represent a small fraction 

of the burdens of establishing the 

reporting infrastructure and compliance 

systems. The Commission preliminarily 

believes that all reportable events, for 

which platforms and registered clearing 

agencies would be responsible for 

reporting, would be reported through 

electronic means. The Commission 

preliminarily believes that there would 

be ten platforms and four registered 

clearing agencies that would incur 

duties to report security-based swap 

transactions under the proposed 

amendments to Rule 901. 

The Commission preliminarily 

estimates that transaction processing 


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224This estimate is based on the following: [((Sr. 

Programmer (160 hours) at $303 per hour) + (Sr. 

Systems Analyst (160 hours) at $260 per hour) + 

(Compliance Manager (10 hours) at $283 per hour) 

+ (Director of Compliance (5 hours) at $446 per 

hour) + (Compliance Attorney (20 hours) at $334 

per hour)) × 14 platforms and registered clearing 

agencies)] = approximately $1,428,000, or $102,000 

per platform or registered clearing agency. All 

hourly cost figures are based upon data from 

SIFMA’s Management & Professional Earnings in 

the Securities Industry 2013 (modified by 

Commission staff to account for an 1,800-hourwork-year and multiplied by 5.35 to account for 

bonuses, firm size, employee benefits, and 

overhead). See also Regulation SBSR Adopting 

Release, Section XXII(C)(2)(b). 

225The Commission derived the total estimated 

expense from the following: ($100,000 hardwareand software-related expenses, including necessary 

backup and redundancy, per SDR connection) × (2 

SDR connections per platform or registered clearing 

agency) × (14 platforms or registered clearing 

agencies) = $2,800,000, or $200,000 per platform or 

registered clearing agency. See also Regulation 

SBSR Adopting Release, Section XXII(C)(2)(b). 

226This figure is calculated as follows: [((Sr. 

Programmer (80 hours) at $303 per hour) + (Sr. 

Systems Analyst (80 hours) at $260 per hour) + 

(Compliance Manager (5 hours) at $283 per hour) 

+ (Director of Compliance (2 hours) at $446 per 

hour) + (Compliance Attorney (5 hours) at $334 per 

hour) × (14 platforms or registered clearing 

agencies)] = approximately $686,000, which equates 

to $49,000 per platform or registered clearing 

agency. See also Regulation SBSR Adopting 

Release, Section XXII(C)(2)(b). 

227This estimate is based on the following: [((Sr. 

Programmer (32 hours) at $303 per hour) + (Sr. 

Systems Analyst (32 hours) at $260 per hour) + 

(Compliance Manager (60 hours) at $283 per hour) 

+ (Compliance Clerk (240 hours) at $64 per hour) 

+ (Director of Compliance (24 hours) at $446 per 

hour) + (Compliance Attorney (48 hours) at $334 

per hour)) × 14 platforms and registered clearing 

agencies)] = approximately $1,078,000, or $77,000 

per platform or registered clearing agency. See also 

Regulation SBSR Adopting Release, Section 

XXII(C)(2)(b). 

228This estimate is calculated as follows: [$250/ 

gigabyte of storage capacity × (4 gigabytes of 

storage) × (14 platforms or registered clearing 

agencies)] = $14,000, or $1,000 per platform or 

registered clearing agency. See also Regulation 

SBSR Adopting Release, Section XXII(C)(2)(b). 

229This figure is based on discussions with 

various market participants and is calculated as 

follows: [((Sr. Programmer (100 hours) at $303 per 

hour) + (Sr. Systems Analyst (40 hours) at $260 per 

hour) + (Compliance Manager (20 hours) at $283 

per hour) + (Director of Compliance (10 hours) at 

$446 per hour) + (Compliance Attorney (10 hours) 

at $334 per hour) × (14 platforms and registered 

clearing agencies)] = approximately $756,000, or 

$54,000 per platform or registered clearing agency. 

230This figure is based on discussions with 

various market participants and is calculated as 

follows: [((Sr. Programmer (16 hours) at $303 per 

hour) + (Sr. Systems Analyst (16 hours) at $260 per 

hour) + (Compliance Manager (30 hours) at $283 

per hour) + (Compliance Clerk (120 hours) at $64 

per hour) + (Director of Compliance (12 hours) at 

$446 per hour) + (Compliance Attorney (24 hours) 

at $334 per hour) × (14 platforms and registered 

clearing agencies)] = approximately $539,000, or 

$38,500 per platform or registered clearing agency. 

See also Regulation SBSR Adopting Release, 

Section XXII(C)(2)(b). 

231See Regulation SBSR Adopting Release, 

Section XXI. 

232The Commission originally estimated that 

there would be 15.5 million reportable events per 

year under Regulation SBSR. See Regulation SBSR 

Proposing Release, 75 FR 75247–48. In the CrossBorder Proposing Release, the Commission updated 

its estimate of the number of reportable events to 

approximately 5 million per year. The Commission 

noted that the change in the estimate of the number 

of reportable events per year was due to better and 

more precise data available from the industry on the 

scope, size, and composition of the security-based 

swap market. See Cross-Border Proposing Release, 

78 FR 31114–15. For these same reasons, the 

Commission has further updated its estimate of the 

number of reportable events to approximately 3 

million per year. See infra note 233. 

233The Commission now estimates that there 

were approximately 2.26 million single-name CDS 

transactions in 2013. The data studied by the 

Commission cover single-name CDS transactions, 

which the Commission continues to believe account 

for approximately 80–90% of the security-based 

swap market. The Commission continues to use 

78% as its measure of CDS as a percentage of the 

entire security-based swap market, resulting in a 

revised estimate of 3 million security-based swap 

transactions (i.e., 2,260,000/0.78 = 2,897,436 

reportable events). See Regulation SBSR Adopting 

Release, Section XXI(B)(4)(b). 

234The Commission is proposing to amend Rule 

901(a)(2) to require a clearing agency to be the 

reporting side for clearing transactions to which it 

is a counterparty. The Commission is further 

proposing to amend Rule 901(e)(1) to provide that 

a ‘‘clearing agency shall report whether or not it has 

accepted a security-based swap for clearing.’’ 

Pursuant to Rule 901(e)(1), a registered clearing 

agency would be required to report whether or not 

it has accepted a security-based swap for clearing. 

Proposed Rule 901(a)(2)(i), discussed above, would 

require clearing agencies to report security-based 

swap transaction information for clearing 

transactions. These reportable events have been 

included in the Commission’s estimates of the 

number of reportable events for the purposes of 

Rule 901. 

In arriving at the Commission’s estimate of 1 

million reportable events, the Commission has 

included the following: (1) The termination of the 

original or ‘‘alpha’’ security-based swap; (2) the 

creation of beta and gamma security-based swaps; 

(3) the termination of beta, gamma, and any 

previous open positions during each netting cycle; 

and (4) any other transactions that are entered into 

by the registered clearing agency, arriving at 

645,000 observations. Inflating this figure by 0.78, 

the Commission’s measure of CDS as a percentage 

of the entire security-based swap market, is 

645,000/0.78 = 826,923 or approximately 1 million 

reportable events. 

system related to Rule 901 and 

applicable to platforms and registered 

clearing agencies would result in initial 

one-time aggregate costs of 

approximately $1,428,000, which 

corresponds to $102,000 for each 

platform or registered clearing 

agency.224 The Commission estimates 

that the cost to establish and maintain 

connectivity to a registered SDR to 

facilitate the reporting required by Rule 

901 would impose an annual (first-year 

and ongoing) aggregate cost of 

approximately $2,800,000, which 

corresponds to $200,000 for each 

platform or registered clearing 

agency.225 The Commission estimates, 

as a result of having to establish a 

reporting mechanism for security-based 

swap transactions, platforms and 

registered clearing agencies would 

experience certain development, testing, 

and supports costs. Such costs would 

amount to an initial one-time aggregate 

cost of approximately $686,000, which 

corresponds to an initial one-time cost 

of $49,000 for each platform or 

registered clearing agency.226 The 

Commission preliminarily estimates 

that order management costs related to 

the proposed amendments to Rule 901 

would impose ongoing annual aggregate 

costs of approximately $1,078,000, 

which corresponds to $77,000 per 

platform or registered clearing 

agency.227 In addition, the Commission 

estimates that platforms and registered 

clearing agencies would incur an initial 

and ongoing aggregate annual cost of 

$14,000, which corresponds to $1,000 

for each platform or registered clearing 

agency.228 The Commission estimates 

that designing and implementing an 

appropriate compliance and support 

program will impose an initial one-time 

aggregate cost of approximately 

$756,000, which corresponds to a cost 

of approximately $54,000 for each 

platform or registered clearing 

agency.229 The Commission estimates 

that maintaining its compliance and 

support program would impose an 

ongoing annual aggregate cost of 

approximately $539,000, which 

corresponds to a cost of approximately 

$38,500 for each platform or registered 

clearing agency.230

In the Regulation SBSR Adopting 

Release, the Commission revised its 

previous estimates of the number of 

reportable events associated with 

security-based swap transactions per 

year.231 These revised estimates were a 

result of the Commission obtaining 

additional, more recent, and more 

granular data regarding participation in 

the security-based swap market from 

DTCC–TIW. In the Regulation SBSR 

Adopting Release, the Commission 

estimated that there will be 

approximately 3 million reportable 

events per year under Rule 901, an 

estimate that the Commission continues 

to believe is valid for the purposes of 

this release.232 The Commission 

estimated in the Regulation SBSR 

Adopting Release that Rule 901(a), as 

adopted, will result in approximately 2 

million reportable events related to 

covered transactions.233

The Commission preliminarily 

estimates that 1 million of the 3 million 

total reportable events would result 

from the proposed amendments to Rule 

901.234 This estimate of 1 million 

reportable events would include the 

initial reporting of the security-based 

swaps by platforms and registered 

clearing agencies as well as any life 


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235Commission staff arrived at this estimate by 

summing the number of beta and gamma 

transactions that would result from observed 

termination of alphas by a registered clearing 

agency (197,798) and the number of other betas and 

gammas for which terminations were not available 

due to same-day clearing (88,935) to arrive at 

286,733 total transactions. Inflating this figure by 

0.78, the Commission’s measure of CDS as a 

percentage of the entire security-based swap 

market, results in an estimate of 286,733/0.78, or 

approximately 370,000 reportable events. 

236As discussed in Section II(C)(2), supra, 

proposed Rule 901(a)(1) would require a platform 

to report any security-based swap executed on its 

facilities that will be submitted to clearing. 

Platforms, however, would not be responsible for 

reporting life cycle events of such security-based 

swaps. The Commission preliminarily believes that 

the only life cycle event of a platform-executed 

security-based swap that is submitted to clearing 

will be whether the security-based swap is accepted 

for clearing. Proposed Rule 901(e)(1)(ii) would 

require the registered clearing agency to report that 

information, not the platform. The Commission 

estimates that platforms would be responsible only 

for the reporting of approximately one third of the 

370,000 security-based swaps (or about 120,000 

security-based swaps) and registered clearing 

agencies (as a result of the creation of new securitybased swaps during the clearing process) would be 

responsible for the reporting of the remaining twothirds of security-based swaps (or 250,000 securitybased swaps). 

237The Commission estimates: ((120,000 × 0.005 

hours per transaction)/(10 platforms)) = 60 hours 

per platform, or 600 total hours. The Commission 

further estimates the total cost to be: [((Compliance 

Clerk (30 hours) at $64 per hour) + (Sr. Computer 

Operator (30 hours) at $87 per hour)) × (10 

platforms)] = approximately $45,300, or $4,530 per 

platform. See also Regulation SBSR Adopting 

Release, Section XXII(C)(2)(b). 

238The Commission estimates: ((250,000 × 0.005 

hours per transaction)/(4 registered clearing 

agencies)) = 312.5 hours per registered clearing 

agency, or 1,250 total hours. The Commission 

further estimates the total cost to be: [((Compliance 

Clerk (156.25 hours) at $64 per hour) + (Sr. 

Computer Operator (156.25 hours) at $87 per hour)) 

× (4 registered clearing agencies)] = $94,375, or 

$23,593.75 per registered clearing agency. See also 

Regulation SBSR Adopting Release, Section 

XXII(C)(2)(b). 

239The Commission estimates: ((630,000 × 0.005 

hours per transaction)/(4 registered clearing 

agencies)) = 787.5 hours per registered clearing 

agency, or 3,150 total hours. The Commission 

further estimates the total cost to be: [((Compliance 

Clerk (393.75 hours) at $64 per hour) + (Sr. 

Computer Operator (393.75 hours) at $87 per hour)) 

× (4 registered clearing agencies)] = approximately 

$237,825, or $59,456.25 per registered clearing 

agency. See also Regulation SBSR Adopting 

Release, Section XXII(C)(2)(b). 

240See Cross-Border Proposing Release, 78 FR 

31198. 

241The Commission estimates that the addition 

burdens would be: [(Sr. Programmer (5 hours at 

$303 per hour) + Sr. Systems Analyst (5 hours) at 

$260 per hour) = 10 burden hours (development of 

the ability to capture transaction information) = 

$2,815 per platform or reporting side; (Sr. 

Programmer (3 hours) at $303 per hour + Sr. 

Systems Analyst (3 hours) at $260 per hour) = 

$1689 per platform or reporting side 

(implementation of reporting mechanism)]. The 

total one-time cost associated with proposed Rule 

901(a)(3) would be $4,504 per platform or reporting 

side for a total one-time cost $1,396,240 ($4,504 × 

310 (300 reporting sides + 10 platforms)). 

242The Commission estimates that the additional 

burdens would be: [(Sr. Programmer (5 hours) + Sr. 

Systems Analyst (5 hours)) = 10 burden hours 

(maintenance of transaction capture system); (Sr. 

Programmer (1 hour) + Sr. Systems Analyst (1 

hour)) = 2 burden hours (maintenance of reporting 

mechanism)]. The total ongoing burden associated 

with the amendments to 901(a) would be 12 burden 

hours per platform and reporting side for a total 

ongoing burden of 3720 hours (12 × 310 (300 

reporting sides + 10 platforms)). 

243This estimate is based on the following: 

(($102,000 + $200,000 + $49,000 + $77,000 + 

$54,000 + $1,000 + $38,500 + $4,530 + $2,815) × 

(10 platforms)) = $5,288,450, which corresponds to 

$528,845 per platform. 

cycle events of such transactions. 

Specifically, the Commission 

preliminarily estimates that, of the 1 

million reportable events, 

approximately 370,000 would involve 

the reporting of new security-based 

swap transactions and approximately 

630,000 would involve the reporting of 

life cycle events under Rule 901(e).235

As a result, the Commission 

preliminarily estimates that platforms 

would be responsible for the reporting 

of approximately 120,000 security-based 

swaps,236 at an annual cost of 

approximately $45,300 or $4,530 per 

platform.237 The Commission 

preliminarily estimates that registered 

clearing agencies would be responsible 

for the reporting of approximately 

250,000 security-based swaps, at an 

annual cost of approximately $94,375 or 

$23,593.75 per registered clearing 

agency.238 The Commission 

preliminarily estimates that the 

proposed amendments to Rule 901(a) 

would result in registered clearing 

agencies having to report a significant 

number of life cycle events under Rule 

901(e) over the course of a year— 

consisting primarily of terminations of 

clearing transactions occurring as part of 

the netting process—at an annual cost of 

approximately $237,825 or $59,456.25 

per registered clearing agency.239 The 

Commission preliminarily believes that 

all reportable events that would be 

reported by platforms and registered 

clearing agencies pursuant to these 

proposed amendments would be 

reported through electronic means. 

In the Cross-Border Proposing 

Release, the Commission stated that, to 

the extent that security-based swaps 

become more standardized and trade 

more frequently on electronic platforms 

(rather than manually), the act of 

reporting transactions to a registered 

SDR should become less costly.240

Together, these trends are likely to 

reduce the number of transactions that 

would necessitate the manual capture of 

bespoke data elements, which is likely 

to take more time and be more 

expensive than electronic capture. 

b. For Platforms and Reporting Sides of 

Alphas—Rule 901(a)(3) 

Pursuant to proposed Rule 901(a)(3), 

a person—either the platform upon 

which the security-based swap was 

executed or the reporting side for those 

security-based swaps other than clearing 

transactions—to report, for those 

security-based swaps submitted to a 

registered clearing agency, the 

transaction ID of the submitted securitybased swap and the identity of the 

registered SDR to which the transaction 

will be or has been reported. 

Rule 901(a)(3) requires certain 

information (transaction ID and the 

identity of the registered SDR) to be 

reported to a registered clearing agency 

only if such security-based swap has 

been submitted to a registered clearing 

agency for clearing. As a result, 

platforms and reporting sides required 

to report transaction IDs and the 

identity of a registered SDR will already 

have put into place any infrastructure 

needed to report these security-based 

swaps to a registered clearing agency. 

However, requiring the person who has 

the duty to report the alpha transaction 

to a registered SDR to provide these data 

elements to the registered clearing 

agency to which the alpha has been 

submitted would result in certain 

additional development and 

maintenance costs. Specifically, the 

Commission preliminarily believes that 

the additional one-time cost related to 

the development of the ability to 

capture the relevant transaction 

information would be $2,815, and the 

additional one-time burden related to 

the implementation of a reporting 

mechanism for these two data elements 

would be $1,689 per platform or 

reporting side.241 The Commission 

preliminarily believes that the 

additional ongoing cost related to the 

development of the ability to capture 

the relevant transaction information 

would be $2,815 and the additional 

ongoing burden related to the 

maintenance of the reporting 

mechanism would be $563, per platform 

or reporting side.242

c. Total Costs of Platforms, Registered 

Clearing Agencies, and Reporting Sides 

Relating to Proposed Amendments to 

Rule 901 

Summing these costs, the Commission 

preliminarily estimates that the initial, 

first-year cost of complying with the 

proposed amendments to Rule 901 

(including the initial reporting and the 

reporting of any life cycle events) would 

be $5,288,450, which corresponds to 

528,845 per platform.243 The 

Commission estimates that the ongoing 

aggregate annual costs, after the first 


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244This estimate is based on the following: 

(($200,000 + $77,000 + $1,000 + $38,500 + $4,530 

+ $563) × (10 platforms)) = $3,215,930, or $321,593 

per platform. 

245This estimate is based on the following: 

(($102,000 + $200,000 + $49,000 +$77,000 + 

$54,000 + $1,000 + $38,500 + $23,593.75 + 

$59,456.25) × (4 registered clearing agencies)) = 

$2,418,200, which corresponds to $604,550 per 

registered clearing agency. 

246This estimate is based on the following: 

(($200,000 + $77,000 + $1,000 + $38,500 + 

$23,593.75 + $59,456.25) × (4 registered clearing 

agencies)) = $1,598,200, or $399,550 per registered 

clearing agency. 

247This estimate is based on the following: 

($2,815 × (300 reporting sides)) = $844,500, which 

corresponds to $2,815 per reporting side. 

248This estimate is based on the following: ($563 

× 300 reporting sides) = $168,900, or $563 per 

reporting side. 

249See Regulation SBSR Adopting Release, 

Section XXII(C)(6). 

250See id. 

251See id. 

252See 75 FR 75254. 

253See Regulation SBSR Adopting Release, 

Section XXII(C)(1). 

254See Regulation SBSR Proposing Release, 75 FR 

75254–55. This figure is calculated as follows: 

[((($49,000 for one-time development of reporting 

system) × (0.05)) + (($2,500 annual maintenance of 

reporting system) × (0.05)) + (($54,000 one-time 

compliance program development) × (0.1)) + 

(($38,500 annual support of compliance program) × 

(0.1))) × (10 platforms)] = $118,250, which is 

$11,825 per platform. 

255See Regulation SBSR Proposing Release, 75 FR 

75254–55. This figure is calculated as follows: 

[(($2,500 annual maintenance of reporting system) 

× (0.05)) + (($38,500 annual support of compliance 

program) × (0.1))) × (10 platforms)] = $39,750, 

which is $3,975 per platform. 

256See Regulation SBSR Adopting Release, note 

1238. 

257See Regulation SBSR Proposing Release, 75 FR 

75257. 

258See Regulation SBSR Adopting Release, note 

1240. 

259 15 U.S.C. 78c(f). 

260 15 U.S.C. 78w(a)(2). 

year, of complying with the proposed 

amendments to Rule 901 (including the 

initial reporting and the reporting of any 

life cycle events) would be $3,215,930, 

which corresponds to $321,593 per 

platform.244 The Commission estimates 

that the initial, first-year cost of 

complying with the proposed 

amendments to Rule 901 (including the 

initial reporting and the reporting of any 

life cycle events) would be $2,418,200, 

which corresponds to $604,550 per 

registered clearing agency.245 The 

Commission preliminarily estimates 

that the ongoing aggregate annual costs, 

after the first year, of complying with 

the proposed amendments to Rule 901 

(including the initial reporting and the 

reporting of any life cycle events) would 

be $1,598,200, which corresponds to 

$399,550 per registered clearing 

agency.246 The Commission estimates 

that the initial, first-year cost of 

complying with proposed Rule 901(a)(3) 

would be $844,500, which corresponds 

to $2,815 per reporting side.247 The 

Commission preliminarily estimates 

that the ongoing aggregate annual costs, 

after the first year, of complying with 

proposed Rule 901(a)(3) would be 

$168,900, which corresponds to $563 

per reporting side.248

2. Proposed Amendment to Rule 905(a) 

In the Regulation SBSR Adopting 

Release, the Commission estimated that 

Rule 905(a), as adopted, will impose an 

initial, one-time burden associated with 

designing and building a reporting 

side’s reporting system to be capable of 

submitting amended security-based 

swap transaction information to a 

registered SDR.249 The Commission 

stated its belief that designing and 

building appropriate reporting system 

functionality to comply with Rule 

905(a)(2) will be a component of, and 

represent an incremental ‘‘add-on’’ to, 

the cost to build a reporting system and 

develop a compliance function as 

required under Rule 901, as adopted.250

Specifically, the Commission estimated 

that, based on discussions with industry 

participants, the incremental burden 

would be equal to 5% of the one-time 

and annual burdens associated with 

designing and building a reporting 

system that is in compliance with Rule 

901, plus 10% of the corresponding onetime and annual burdens associated 

with developing the reporting side’s 

overall compliance program required 

under Rule 901.251 This estimate was 

based on similar calculations contained 

in the Regulation SBSR Proposing 

Release,252 updated to reflect new 

estimates relating to the number of 

reportable events and the number of 

reporting sides.253

The Commission preliminarily 

believes that the above methodology is 

applicable to error reporting by 

platforms under the proposed 

amendment to Rule 905(a). Thus, for 

platforms, the Commission 

preliminarily estimates that the 

proposed amendment to Rule 905(a) 

would impose an initial (first-year) 

aggregate cost of $118,250, or $11,825 

per platform,254 and an ongoing 

aggregate annualized cost of $39,750, 

which is $3,975 per platform.255

3. Proposed Amendments to Rule 906(c) 

For Registered Clearing Agencies and 

Platforms. Rule 906(c), as adopted, 

requires each participant of a registered 

SDR that is a registered security-based 

swap dealer and registered major 

security-based swap participant to 

establish, maintain, and enforce written 

policies and procedures that are 

reasonably designed to ensure 

compliance with any security-based 

swap transaction reporting obligations 

in a manner consistent with Regulation 

SBSR. Rule 906(c), as adopted, also 

requires such participants to review and 

update the required policies and 

procedures at least annually. 

The proposed amendment to Rule 

906(c) would extend these same 

requirements to participants of a 

registered SDR that are platforms or 

registered clearing agencies. The 

Commission preliminarily estimates 

that the one-time, initial burden for each 

registered clearing agency or platform to 

adopt written policies and procedures 

as required under the proposed 

amendment would be similar to the 

Rule 906(c) burdens discussed in the 

Regulation SBSR Adopting Release for 

registered security-based swap dealers 

and registered major security-based 

swap participants. As a result, the 

Commission preliminarily estimates 

that the first year cost of complying with 

the proposed amendment to Rule 906(c) 

would be approximately $58,000 per 

registered clearing agency or 

platform.256 As discussed in the 

Regulation SBSR Proposing Release,257

this figure is based on the estimated cost 

to develop written policies and 

procedures, program systems, 

implement internal controls and 

oversight, train relevant employees, and 

perform necessary testing. In addition, 

the Commission preliminarily estimates 

the cost of maintaining such policies 

and procedures, including a full review 

at least annually—as would be required 

by the proposed amendment to Rule 

906(c)—would be approximately 

$34,000 per registered clearing agency 

or platform.258 This figure includes an 

estimate of the cost related to reviewing 

existing policies and procedures, 

making necessary updates, conducting 

ongoing training, maintaining internal 

controls systems, and performing 

necessary testing. 

D. Economic Effects and Effects on 

Efficiency, Competition, and Capital 

Formation 

Section 3(f) of the Exchange Act 259

requires the Commission, whenever it 

engages in rulemaking and is required to 

consider or determine whether an action 

is necessary or appropriate in the public 

interest, to consider, in addition to the 

protection of investors, whether the 

action will promote efficiency, 

competition, and capital formation. In 

addition, Section 23(a)(2) of the 

Exchange Act 260 requires the 

Commission, when making rules under 

the Exchange Act, to consider the 

impact of such rules on competition. 


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261See Regulation SBSR Adopting Release, 

Section XXII(D). 

262These transactions costs would include both 

implicit and explicit costs. Implicit transactions 

costs are the spread between transaction prices and 

the fundamental value of the assets being traded. 

Explicit transactions costs, by contrast, are 

commissions and other fees paid by counterparties 

to access the security-based swap market. 

263See General Policy on Sequencing, 77 FR 

35636. 264 If, for example, the non-clearing agency 

counterparty had the duty to report a clearing 

transaction, the registered clearing agency would 

first have to convey the transaction information to 

the counterparty—and the counterparty might have 

to reconfigure the transaction data into the format 

required by a registered SDR—before the 

counterparty could report it to a registered SDR. 

265See CME/ICE Letter at 3–4. 

Section 23(a)(2) also prohibits the 

Commission from adopting any rule that 

would impose a burden on competition 

not necessary or appropriate in 

furtherance of the purposes of the 

Exchange Act. 

The Commission preliminarily 

believes that this proposal will result in 

further progress towards the goals 

identified in the Regulation SBSR 

Adopting Release: Providing a means for 

the Commission and other relevant 

authorities to gain a better 

understanding of the aggregate risk 

exposures and trading behaviors of 

participants in the security-based swap 

market; facilitating public dissemination 

of security-based swap transaction 

information, thus promoting price 

discovery and competition by 

improving the level of information to all 

market participants; and improving risk 

management by security-based swap 

counterparties, which would need to 

capture and store their transactions in 

security-based swaps to facilitate 

reporting.261

The economic effects of the proposed 

rules, amendments, and guidance on 

firms that provide services to securitybased swap counterparties and the 

security-based swap market are 

discussed in detail below. The 

Commission also considered the effects 

that the proposed rules, amendments, 

and guidance might have on 

competition, efficiency, and capital 

formation. The Commission 

preliminarily believes that the proposal 

is likely to affect competition between 

firms that provide services to securitybased swap counterparties and affect 

efficiency as a result of the way that the 

proposed rules and amendments 

allocate regulatory burdens. The 

Commission preliminarily believes that 

most of the effects of the proposal on 

capital formation would be indirect and 

would be related to the way in which 

the proposed rules and amendments 

result in efficient delivery of services by 

registered clearing agencies and 

registered SDRs, reducing transactions 

costs and freeing resources for 

investment.262

This analysis has been informed by 

the relationships among regulation, 

competition, and market power 

discussed in Section VIII(A), supra. An 

environment in which there is limited 

competition in SDR services could 

impose certain costs on the securitybased swap market, including higher 

prices or lower quality services from 

SDRs. For example, a registered SDR 

might be able to extract monopoly 

profits from reporting sides when there 

are few competitors, if reporting sides 

cannot identify a competing SDR 

offering prices close enough to marginal 

cost to make changing service providers 

privately efficient for the reporting side. 

However, it is also possible that limited 

competition in the market for SDR 

services could yield certain benefits for 

both regulatory authorities and the 

public. In particular, a small set of 

registered SDRs could make it simpler 

for relevant authorities to build a 

complete picture of transaction activity 

and outstanding risk exposures in the 

security-based swap market, and could 

limit the need for users of publicly 

disseminated transaction data to merge 

these data from multiple sources before 

using it as an input to economic 

decisions. 

1. Reporting of Clearing Transactions 

Proposed Rule 901(a)(2)(i) would 

assign the duty to report all securitybased swaps that have a registered 

clearing agency as a direct counterparty 

to that registered clearing agency. 

Regulation SBSR, as adopted, does not 

assign reporting obligations for any 

clearing transactions; thus, in the 

absence of proposed Rule 901(a)(2)(i), 

these transactions would not be subject 

to any regulatory reporting requirement. 

Without these data, the ability of the 

Commission and other relevant 

authorities to carry out their market 

oversight functions would be limited. 

For example, while the Commission 

would have access to uncleared 

transactions that are reported to a 

registered SDR, the Commission—in the 

absence of proposed Rule 901(a)(2)(i)— 

would not be able to obtain from 

registered SDRs information about 

changes to the open positions of the 

relevant counterparties after alpha 

transactions are cleared. Without access 

to this information from registered 

SDRs, the Commission would be unable 

to easily observe risk exposures in the 

security-based swap market, because 

information about the net open 

positions in cleared security-based 

swaps would not be held in registered 

SDRs. Ensuring that clearing 

transactions are reported to registered 

SDRs and delineating reporting 

responsibilities for these transactions is 

particularly important given the level of 

voluntary clearing activity in the market 

as well as the mandatory clearing 

determinations required under Title 

VII.263

The Commission preliminarily 

believes that the costs associated with 

required reporting pursuant to the 

proposed amendments could represent a 

barrier to entry for new, smaller clearing 

agencies that might not have the ability 

to comply with the proposed reporting 

requirements or for whom the expected 

benefits of compliance might not justify 

the costs of compliance. To the extent 

that the proposed rules and 

amendments might deter new clearing 

agencies from entering the securitybased swap market, this could 

negatively impact competition between 

registered clearing agencies. 

A registered clearing agency is 

responsible for executing each of the 

clearing transactions to which it is a 

counterparty and, thus, is well-situated 

to report the resulting transaction 

information. By proposing to assign the 

reporting responsibility to registered 

clearing agencies, the Commission 

intends to eliminate additional steps in 

the reporting process that would be 

needed if another market participant 

were assigned the duty to report a 

clearing transaction or if the duty were 

to remain unassigned.264 By proposing a 

reporting methodology with as few steps 

as possible, the Commission intends to 

minimize potential data discrepancies 

and errors by assigning reporting 

responsibilities to persons that hold the 

most complete and accurate information 

for cleared security-based swaps.265

Inaccurate information would 

negatively impact the ability of the 

Commission and other relevant 

authorities to understand and act on the 

transaction information reported; 

accurate information should positively 

affect their ability to oversee the 

security-based swap market. 

Proposed Rule 901(a)(1)(i) would 

place the obligation for reporting all 

clearing transactions on registered 

clearing agencies and allow them to 

choose the registered SDR to which they 

submit transaction data. As noted in 

Section VIII(A), supra, the Commission 

preliminarily believes that, because 

many of the infrastructure requirements 

for entrant SDRs are shared by 

registered clearing agencies, registered 

clearing agencies might pursue vertical 


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266The Commission’s estimates of events 

reportable under these proposed rules and 

amendments includes observable allocation by 

clearing agencies in the DTCC–TIW data. Therefore, 

the costs associated with clearing transactions 

involving allocation are included in our estimate of 

the programmatic costs of proposed Rules 901(a)(1) 

and 901(a)(2)(i). 

integration into the market for SDR 

services at a lower cost relative to 

potential entrants from unrelated 

markets. If the costs of reporting to 

affiliated SDRs are lower than the costs 

of reporting to unaffiliated SDRs, then 

one likely response to the proposed 

rules and amendments is that registered 

clearing agencies will choose to report 

clearing transactions to an affiliated 

SDR. Such vertical integration of 

security-based swap clearing and 

reporting could be beneficial to other 

market participants if they ultimately 

share in these efficiency gains. For 

example, efficiency gains due to 

straight-through processing from 

execution to reporting could lower 

transactions costs for market 

participants and reduce the likelihood 

of data discrepancies and delays. 

The Commission is also aware of the 

potential costs of placing the duty on 

registered clearing agencies to report 

transactions and allowing them to 

choose the registered SDR to which they 

report, as such clearing agencies would 

likely select their affiliated SDRs. If 

proposed Rule 901(a)(1)(i) would 

encourage the formation of affiliate 

SDRs that would not otherwise emerge, 

then the aggregate number of registered 

SDRs might reflect an inefficient level of 

service provision. As noted in Section 

VIII(A)(2), supra, economies of scale 

exist in the market for SDR services 

from the ability to amortize the fixed 

costs associated with infrastructure over 

a large volume of transactions. As a 

result, the entry of clearing agencyaffiliated SDRs could indicate that, in 

aggregate, transaction data is processed 

at a higher average cost than if there 

were fewer SDRs. Inefficiencies could 

be introduced by the Commission and 

the public receiving security-based 

swap transaction data from a larger 

number of registered SDRs. Connecting 

to a larger number of SDRs and merging 

transaction data with potentially 

different data formats and schema could 

be costly and could lead to losses in 

data integrity. 

The potential for efficiency gains 

through vertical integration of registered 

clearing agencies and registered SDRs 

could foreclose entry into the market for 

SDR services except by those firms that 

are willing to simultaneously enter the 

market for clearing services. The 

Commission preliminarily believes that 

registered clearing agencies are more 

likely to benefit from these efficiencies 

in shared infrastructure than standalone SDRs, given that it is likely to be 

more difficult for a registered SDR to 

enter into clearing activity than for a 

registered clearing agency to enter into 

SDR activity. Moreover, to the extent 

that an affiliate SDR is not as costeffective as a competing unaffiliated 

SDR, the registered clearing agency 

could subsidize the operation of its 

affiliate SDR to provide a competitive 

advantage in its cost structure over 

SDRs unaffiliated with a registered 

clearing agency. Even if the registered 

clearing agency does not provide a 

subsidy to its affiliate SDR, and the 

resulting service is not as price 

competitive as an unaffiliated SDR, 

counterparties have less recourse in 

choosing alternative reporting venues 

because the duty to report would reside 

with the registered clearing agency. 

Hence, providing registered clearing 

agencies with the discretion to report 

transaction information to the registered 

SDR of their choice could provide a 

competitive advantage for clearing 

agency-affiliated SDRs relative to 

unaffiliated SDRs. This could also have 

implications for the reporting of 

uncleared swaps. In particular, a 

clearing agency-affiliated SDR could 

leverage its repository activity for 

cleared transactions by offering SDR 

services to clearing members for 

uncleared swaps. If security-based swap 

counterparties who clear transactions 

prefer to have their transaction records 

consolidated in a single database, then 

a clearing agency-affiliated SDR would 

be able to offer these counterparties 

recordkeeping and cost saving benefits 

by also recording their uncleared 

transactions. By contrast, to the extent 

that an unaffiliated SDR is unable to 

compete with a clearing agency’s 

affiliated SDR for cleared transactions, it 

would not be able to offer a 

consolidated record of a counterparty’s 

trade activity. This then provides a 

unique advantage to clearing agencyaffiliated SDRs. 

Alternatively, a clearing member 

seeking to consolidate its transactions at 

an unaffiliated SDR might contract with 

the registered clearing agency, for a fee, 

to transmit data for clearing transactions 

to an SDR of the clearing member’s 

choice, either as a duplicate report or as 

a required report by Regulation SBSR. 

This would allow the registered clearing 

agency to satisfy its obligations while 

permitting the clearing member to 

maintain access to centralized data. 

However, in this case, the registered 

clearing agency could choose a fee 

schedule that encourages the clearing 

member to report its uncleared bilateral 

transactions to the affiliate SDR. Such a 

fee schedule might involve the clearing 

agency offering to terminate alpha 

transactions reported to its affiliate SDR 

for a lower price than alpha transactions 

at a third-party SDR. 

As discussed in Section VIII(C)(1)(a), 

supra, the Commission has estimated 

the annual and on-going costs 

associated with requiring registered 

clearing agencies to establish 

connections to registered SDRs. The 

Commission preliminarily believes that, 

for a given registered clearing agency, 

these costs may be lower for 

connections to affiliate SDRs than for 

connections to unaffiliated SDRs. 

Because the registered clearing agency 

might have been involved in developing 

its affiliated SDR’s systems, the clearing 

agency might, as a result, avoid costs 

related to translating or reformatting 

data due to incompatibilities between 

data reporting by the registered clearing 

agency and data intake by the SDR. 

2. Reporting of Clearing Transactions 

Involving Allocation 

This release explains the 

Commission’s preliminary view of the 

application of Regulation SBSR to 

allocations of bunched order executions 

that are submitted to clearing. The final 

placement of risk of a bunched order 

alpha is the series of clearing 

transactions—the ‘‘gamma series’’—that 

results from clearing the bunched order 

alpha and is economically relevant to 

risk monitoring and market 

surveillance. This proposed 

interpretation would not create any new 

duties under Regulation SBSR but rather 

would explain the application of 

Regulation SBSR to events that occur as 

part of the allocation process.266

Additionally, because the proposed 

interpretation explains how Regulation 

SBSR, as adopted and as proposed to be 

amended by this release, would apply to 

a platform-executed bunched order that 

will be submitted to clearing, and the 

security-based swaps that result from 

the allocation of any bunched order 

execution, if the resulting security-based 

swaps are cleared, the Commission 

preliminarily believes that the proposed 

interpretation is not likely to have 

consequences for efficiency, 

competition, or capital formation 

beyond those stemming from allocating 

transaction reporting obligations to 

platforms and registered clearing 

agencies discussed in Section VIII(D)(1), 

supra, and in Section VIII(D)(4), infra. 

The proposed interpretation discusses 

the manner in which the bunched order 

alpha and the security-based swaps 


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267See supra Section III(A) (providing additional 

examples of workflows for allocation of securitybased swaps that are cleared). 268See Regulation SBSR Adopting Release, 

Section VIII. 

resulting from its allocation would be 

reported to a registered SDR. This 

proposed interpretation is designed to 

accommodate the various workflows 

that market participants employ to 

execute and allocate bunched order 

alphas. For example, in a case where a 

registered clearing agency receives 

allocation instructions only subsequent 

to clearing, the registered clearing 

agency would decrement the size of the 

‘‘intermediate gamma’’ until it 

eventually reached zero and would 

novate all of the security-based swaps in 

a ‘‘gamma series.’’ 267 Under proposed 

Rule 901(a)(2)(i), the registered clearing 

agency would have the duty to report 

each new security-based swap that it 

creates as part of the gamma series. 

Pursuant to Rule 901(d)(10), as adopted, 

the registered clearing agency also 

would be responsible for including the 

transaction ID of the bunched order 

alpha in the transaction report of each 

new security-based swap in the gamma 

series that results from the termination 

of the bunched order alpha. The benefit 

of regulatory reporting of clearing 

transactions is that relevant authorities 

would be able to observe allocations at 

the level of client accounts, facilitating 

more granular monitoring of risk and 

market abuse.268

3. Alternative Approaches to Reporting 

Clearing Transactions 

As part of the economic analysis of 

these proposed rules and amendments, 

the Commission has considered the 

market power that providers of securitybased swap market infrastructure might 

be able to exercise in pricing the 

services that they offer counterparties to 

security-based swaps and/or shifting 

regulatory burdens onto their customers. 

The Commission recognizes that the 

treatment of clearing transactions in this 

proposal might influence the market 

power of certain providers of these 

services by imposing the reporting duty 

on registered clearing agencies. The 

Commission considered three 

alternative allocations of reporting 

obligations for clearing transactions, 

each of which implies different 

allocations of costs across market 

participants along with different effects 

on efficiency and competition, and, 

indirectly, capital formation. 

a. Apply the Re-Proposed Reporting 

Hierarchy 

The first alternative to the proposed 

approach is to apply the reporting 

hierarchy in Regulation SBSR, as reproposed. Under this approach, a 

registered clearing agency would 

occupy the lowest spot in the hierarchy, 

along with other persons who are 

neither registered security-based swap 

dealers nor registered major securitybased swap participants. Under this 

alternative, when one of the sides of the 

transaction included a security-based 

swap dealer or major security-based 

swap participant and the other side did 

not, the side including the securitybased swap dealer or major securitybased swap participant would have the 

duty to report any resulting clearing 

transactions, as well as the choice of 

which registered SDR to which to 

report. As described in more detail 

below, placing the duty to report with 

non-clearing agency reporting sides 

would likely leave them in a position to 

either request transaction information 

from registered clearing agencies to retransmit that information to registered 

SDRs, or request that the registered 

clearing agency report to a registered 

SDR on their behalf. To the extent that 

each transmission of data introduces 

some possibility for error or delay, the 

additional step of requesting data from 

a registered clearing agency could result 

in security-based swap data that are 

marginally less reliable than under our 

proposed approach. Alternatively, 

having the registered clearing agency 

report clearing transactions would 

require fewer processing steps and 

would result in the same outcome for 

data integrity as the proposed rules. 

Under this alternative, one of the 

sides of the initial alpha transaction 

would report the resulting clearing 

transactions according to the hierarchy 

originally proposed in the Regulation 

SBSR Proposing Release. For the beta, 

gamma, and any subsequent clearing 

transactions (resulting from netting and 

compression of multiple betas and 

gammas), the non-clearing agency 

counterparties could obtain the 

information needed for regulatory 

reporting from the registered clearing 

agency and transmit this information to 

the registered SDR of its choice. 

The Commission preliminarily 

believes that it is unlikely that nonclearing agency counterparties would be 

subject to significant additional costs 

associated with building infrastructure 

to support regulatory reporting for 

clearing transactions under this 

alternative. This is for two reasons. 

First, to the extent that market 

participants that submit security-based 

swaps to clearing also engage in 

uncleared transactions and fall high on 

the reporting hierarchy, they likely 

already have the required infrastructure 

in place to support regulatory reporting 

of alphas and uncleared transactions. 

The Commission anticipates that, as a 

result, there might be only marginal 

additional costs for reporting sides to 

report clearing transactions, if the 

Commission selected this alternative. 

Moreover, the Commission anticipates 

that, once infrastructure is built, the pertransaction cost of data transmission 

would not vary substantially between 

registered clearing agencies, who would 

be required to report pursuant to 

proposed Rule 901(a)(1)(i), and 

reporting sides, who would be required 

to report under this alternative. 

Second, counterparties (who are not 

themselves a registered clearing agency), 

particularly those who engage solely in 

cleared trades or who are not high on 

the Regulation SBSR reporting 

hierarchy, may enter into an agreement 

under which the registered clearing 

agency would submit the information to 

a registered SDR on their behalf. This 

service could be bundled as part of the 

other clearing services purchased, and 

would result in an outcome 

substantially similar to giving the 

registered clearing agency the duty to 

report. One difference, however, is that 

the customer of the registered clearing 

agency could, under this alternative, 

request that the information be 

submitted to a registered SDR 

unaffiliated with the registered clearing 

agency, a choice that would, under the 

proposed approach, be at the discretion 

of the registered clearing agency. 

Nevertheless, the Commission 

preliminarily believes that, to the extent 

that it is economically efficient for the 

registered clearing agency to report the 

details of cleared transactions on behalf 

of its counterparties, this alternative 

would likely result in ongoing costs of 

data transmission for market 

participants and infrastructure 

providers that are, in the aggregate, 

similar to the Commission’s approach in 

proposed Rule 901(a)(2)(i). 

If registered clearing agencies 

reporting to registered SDRs on behalf of 

counterparties is not available under 

this alternative, then some 

counterparties would be required to 

build infrastructure to support 

regulatory reporting for clearing 

transactions. Analysis of single-name 

CDS transactions in 2013 in which a 

clearing agency was a direct 

counterparty shows approximately 10 

market participants that are not likely to 

register as security-based swap dealers 

or major security-based swap 

participants, and therefore might be 

required to build infrastructure to 

support regulatory reporting for clearing 

transactions in order to maintain current 


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269To arrive at this estimate, Commission staff 

used single-name CDS transaction data for 2013 to 

produce a list of all direct counterparties to a 

clearing agency and removed those persons likely 

to register as security-based swap dealers or major 

security-based swap participants. The list of likely 

registrants was constructed using the methodology 

described in the Cross-Border Adopting Release. 

See Cross-Border Adopting Release, 79 FR 47296, 

note 150 (describing the methodology employed by 

the Commission to estimate the number of potential 

security-based swap dealers); id. at 47297, note 153 

(describing the methodology employed by the 

Commission to estimate the number of potential 

major security-based swap participants). 

270Unless it preferred a particular registered SDR 

for operational reasons discussed above, a nonclearing agency counterparty to a clearing 

transaction would likely contract with the clearing 

agency to report clearing transactions to the 

registered SDR that offers the lowest price, most 

likely the clearing agency affiliate. 

trading practices in the security-based 

swap market.269

Under this alternative, non-clearing 

agency counterparties would have the 

ability to choose which registered SDR 

receives their reports. Because nonclearing agency counterparties would 

have this choice, registered SDRs under 

the alternative approach might have 

additional incentive to provide high 

levels of service to attract this reporting 

business by, for example, providing 

such counterparties with convenient 

access to reports submitted to the 

registered SDR or by supporting the 

counterparties’ efforts at data validation 

and error correction. Additionally, 

ensuring that these counterparties have 

discretion over which registered SDR 

receives their data could allow them to 

consolidate their security-based swap 

transactions into a single SDR for 

record-keeping purposes, or for 

operational reasons, though only to the 

extent that they can identify a registered 

SDR that accepts reports for all relevant 

asset classes. 

In assessing this alternative, the 

Commission recognizes that registered 

clearing agencies have a comparative 

advantage in processing and preparing 

data for reporting cleared transactions to 

a registered SDR. Registered clearing 

agencies terminate alpha transactions, 

as well as create beta and gamma 

transactions and all subsequent netting 

transactions, and so already possess all 

of the relevant information to report 

these transaction events to a registered 

SDR. Moreover, the volume of 

transactions at registered clearing 

agencies means that they can amortize 

the fixed costs of establishing and 

maintaining connections to a registered 

SDR over a large quantity of reportable 

activity, potentially allowing them to 

report transactions at a lower average 

cost per transaction than many other 

market participants, particularly nonregistered persons. 

The Commission preliminarily 

believes that, given this comparative 

advantage, applying to clearing 

transactions the same reporting 

hierarchy that it has adopted for 

uncleared transactions would result in 

registered clearing agencies reporting 

the transaction data to registered SDRs 

as a service to the non-clearing agency 

counterparties to clearing transactions. 

In this respect, the outcome would be 

the same as with proposed Rule 

901(a)(2)(i), which would assign this 

duty to registered clearing agencies. The 

key difference is that the non-clearing 

agency counterparty would generate this 

responsibility through private contract 

and could terminate the agreement and 

assume the reporting responsibility, 

should it perceive the fee or service 

terms as unreasonable. The ability to 

terminate such an agreement could 

diminish the potential bargaining power 

that the registered clearing agency 

would otherwise have if the registered 

clearing agency were assigned the duty 

to report. However, because the nonclearing agency counterparty might still 

have to rely on assistance from the 

clearing agency to satisfy the reporting 

obligations—particularly for any 

subsequent clearing transactions 

resulting from netting and compression 

of multiple betas and gammas—the 

reduction in clearing agency bargaining 

power might not be substantial. A 

registered clearing agency that supplies 

this information and converts it into the 

formats prescribed by the 

counterparties’ chosen SDRs so that a 

non-clearing agency counterparty can 

fulfill their reporting requirement could 

still have significant bargaining power 

with respect to providing that 

information. 

The Commission preliminarily 

believes that the proposed rules are 

generally consistent with the outcome 

under this alternative in a number of 

key respects. Under both approaches to 

reporting—one in which the 

Commission assigns the reporting 

responsibility for clearing transactions 

to registered clearing agencies, and the 

other in which the market allocated the 

reporting responsibility in the same 

way—registered clearing agencies 

would report clearing transactions to 

their affiliated SDRs.270 Under an 

approach in which the Commission 

does not assign any reporting duties to 

registered clearing agencies, 

counterparties would likely be assessed 

an explicit fee by registered clearing 

agencies for submitting reports on the 

counterparties’ behalf. Under proposed 

Rule 901(a)(1)(i), the fees associated 

with these services would likely be part 

of the total fees associated with clearing 

security-based swaps. Under this 

alternative and under the proposed 

approach, efficiency gains stemming 

from consolidation of the reporting 

function within registered clearing 

agencies would be split between such 

clearing agencies and security-based 

swap counterparties. The difference 

between these two regulatory 

approaches turn on how these gains are 

split. 

The Commission preliminarily 

believes that this alternative would not 

necessarily restrict the ability of 

registered clearing agencies to exercise 

market power in ways that may allow 

them to capture the bulk of any 

efficiency gains. First, while a 

counterparty to a registered clearing 

agency could contract with the clearing 

agency to receive the information about 

netting and compression transactions 

that would enable re-transmission to a 

registered SDR, depending on the 

policies and procedures of the registered 

clearing agency, these data might not be 

in the format that is required for 

submission to the counterparty’s SDR of 

choice. As a result, counterparties to 

registered clearing agencies would bear 

the costs associated with restructuring 

the data that they receive from 

registered clearing agencies before 

submitting transaction reports to a 

registered SDR. Such costs could limit 

the feasibility of assuming the reporting 

responsibility rather than contracting to 

have the registered clearing agency to 

perform the duty. 

Second, in an environment where 

reporting obligations for clearing 

transactions rest with counterparties 

and there is limited competition among 

registered clearing agencies, registered 

clearing agencies might be able to 

charge high fees to counterparties who 

must rely on them to provide 

information necessary to make required 

reports to registered SDRs. A registered 

clearing agency could otherwise impair 

the ability of its counterparties to 

perform their own reporting if the 

clearing agency does not provide 

sufficient support or access to clearing 

transaction data. In particular, the 

clearing agency might have incentives to 

underinvest in the infrastructure 

necessary to provide clearing 

transaction data to its counterparties 

unless the Commission, by rule, 

established minimum standards for 

communication of clearing transactions 

data from registered clearing agencies to 

their counterparties. The result could be 

greater difficulties faced by 

counterparties in reporting data and an 

increased likelihood of incomplete, 


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271See Securities Exchange Act Release No. 34– 

68080 (October 22, 2013), 77 FR 66220, 66267 

(November 2, 2012) (‘‘Clearing Agency Standards 

Adopting Release’’) (discussing financial resources 

of clearing agencies). 

inaccurate, or untimely data being 

submitted to registered SDRs. 

Third, under this alternative the 

registered clearing agency that also is 

party to the transaction potentially has 

weaker incentives to provide highquality regulatory data to the 

counterparty with a duty to report, 

which could reduce the quality of 

regulatory data collected by registered 

SDRs. The person with the duty to 

report a transaction has strong 

incentives to ensure that the transaction 

details are transmitted in a wellstructured format with data fields 

clearly defined, and that contain data 

elements that are validated and free of 

errors because, pursuant to Regulation 

SBSR, this person is responsible for 

making accurate reports and, if 

necessary, making corrections to 

previously submitted data. Not only 

would the registered clearing agency 

have no duty under Regulation SBSR to 

provide information to its counterparty, 

but additionally, market forces might 

not provide sufficient motivation to the 

registered clearing agency to provide 

data to the counterparty in a manner 

that would minimize the counterparty’s 

reporting burden. If registered clearing 

agencies exercise their market power 

against counterparties, the 

counterparties might have limited 

ability to demand high-quality data 

reporting services from registered 

clearing agencies. The Commission 

notes, however, that it could, by 

imposing minimum standards on data 

services provided by registered clearing 

agencies and regulating the fees 

associated with data transmission by 

registered clearing agencies, mitigate 

some of the effects of market frictions 

under these alternatives. 

The Commission preliminarily 

believes, however, that despite a 

similarity in ultimate outcomes, and any 

benefits that might flow from enabling 

registered SDRs to compete for clearing 

transaction business, this alternative 

does not compare favorably to the 

proposed approach. 

b. Move Registered Clearing Agencies 

Within the Regulation SBSR Reporting 

Hierarchy 

A second, closely related alternative 

would involve placing registered 

clearing agencies within the Regulation 

SBSR reporting hierarchy below 

registered security-based swap dealers 

and registered major security-based 

swap participants but above 

counterparties that are not registered 

with the Commission. This alternative 

would assign the reporting obligation to 

a registered security-based swap dealer 

or registered major security-based swap 

participant when it is a counterparty to 

a registered clearing agency, while 

avoiding the need for non-registered 

persons to negotiate reporting 

obligations with registered clearing 

agencies. 

As with the previous alternative of 

maintaining the reporting hierarchy in 

Regulation SBSR, as adopted, this 

alternative potentially results in 

additional reporting steps and could 

marginally reduce the quality of 

regulatory data relative to the proposed 

approach. A key difference, however, is 

that this alternative would reduce the 

likelihood of reporting obligations 

falling on unregistered persons, who 

would likely have less market power in 

negotiations with registered clearing 

agencies over the terms of reporting to 

a registered SDR. Larger counterparties, 

i.e., those with greater transaction flow, 

are likely to be better able to negotiate 

the terms of reporting transactions on 

their behalf or access to the clearing 

data so that they can perform their own 

reporting. 

Above, the Commission noted three 

particular ways in which limited 

competition among registered clearing 

agencies could result in poorer 

outcomes for non-clearing agency 

counterparties. First, when these 

counterparties obtain clearing data from 

a registered clearing agency, they would 

likely incur any costs related to 

reformatting the data for submission to 

a registered SDR. Second, registered 

clearing agencies might charge these 

counterparties high fees for access to 

regulatory data that counterparties are 

required to submit to registered SDRs. 

Third, registered clearing agencies 

might have weak incentives to ensure 

that the data that they supply to 

reporting sides are of high quality, since 

the non-clearing agency counterparties 

would bear the costs of error correction. 

Limiting the extent to which 

registered clearing agencies can exercise 

the market power from limited 

competition over their counterparties 

may reduce some of the drawbacks to 

the first alternative. In particular, 

registered clearing agencies may be less 

likely to exercise market power in 

negotiations with larger market 

participants, particularly when these 

market participants are also clearing 

members. Clearing members play key 

roles in the governance and operation of 

registered clearing agencies, often 

contributing members to the board of 

directors. Moreover, clearing members 

contribute to risk management at 

registered clearing agencies by, for 

example, contributing to clearing funds 

that mutualize counterparty risk.271

Nevertheless, the Commission 

preliminarily believes that this 

alternative does not fully address 

frictions that arise from limited 

competition between registered clearing 

agencies, such as high clearing fees or 

low quality services. The Commission 

preliminarily believes that this 

alternative would be less efficient than 

requiring the registered clearing agency 

to report the transaction information 

directly to a registered SDR, because the 

registered clearing agency is the only 

person who has complete information 

about a clearing transaction 

immediately upon its creation. 

c. Require the Reporting Side for an 

Alpha To Also Report the Beta and 

Gamma Transactions 

The Commission also considered a 

third alternative that would make the 

reporting side for the alpha responsible 

for reporting both the beta and gamma. 

This alternative would require the 

reporting side for the alpha also to 

report information about a securitybased swap—the clearing transaction 

between the registered clearing agency 

and the non-reporting side of the 

alpha—to which it is not a counterparty. 

The Commission could require the nonreporting side of the alpha to transmit 

information about its clearing 

transaction to the reporting side of the 

alpha. In theory, this would allow the 

reporting side of the alpha to report both 

the beta and the gamma. The 

Commission believes, however, that this 

result could be difficult to achieve 

operationally and, in any event, could 

create confidentiality concerns, as an 

alpha counterparty may not wish to 

reveal information about its clearing 

transactions except to the registered 

clearing agency (and, if applicable, its 

clearing member). This alternative also 

would require reporting sides to 

negotiate with registered clearing 

agencies to obtain transaction data and 

to bear the costs of reformatting these 

data and correcting errors in these data, 

exposing them to the market power 

exercised by registered clearing 

agencies. Moreover, all other things 

being equal, having more steps in the 

reporting process—e.g., more data 

transfers between execution and 

reporting—introduces greater 

opportunity for data discrepancies and 

delays than having fewer steps. Also, 

because the reporting side of the alpha 

would report the beta and gamma, this 


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14784 Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 

272See Regulation SBSR Adopting Release, 

Section V(B)(2) at note 267 (‘‘Under Rule 900(g), a 

security-based swap that results from clearing is an 

independent security-based swap and not a life 

cycle event of a security-based swap that is 

submitted to clearing. Thus, Rule 901(e), which 

addresses the reporting of life cycle events, does not 

address what person has the duty to report the 

clearing transactions that arise when a securitybased swap is accepted for clearing’’). 

273Some commenters specifically pointed out 

this fact and argued that SB SEFs and exchanges 

should therefore incur the duty to report. See supra 

note 55. 

274See General Policy on Sequencing, 77 FR 

35640. 

275The Commission is aware that certain market 

structures could result in situations where a single 

security-based swap transaction results in a split 

trade where one portion is anonymously executed 

and another portion is not anonymously executed. 

This could complicate separation of anonymous 

and non-anonymous executions. 

alternative is premised on the view that 

the beta and gamma are life cycle events 

of the alpha. The Commission, however, 

considered and rejected this approach 

in the Regulation SBSR Adopting 

Release.272

In addition, this alternative could 

result in incomplete regulatory data 

because it could raise questions about 

who would report clearing transactions 

associated with the compression and 

netting of beta or gamma transactions. 

For example, suppose a non-dealer 

clears two standard contracts on the 

same reference entity using a single 

registered clearing agency, each contract 

having a different registered securitybased swap dealer as counterparty. 

Under this alternative to the proposed 

approach, each dealer would be 

responsible for reporting a gamma 

security-based swap between the nondealer and the registered clearing 

agency. However, this alternative does 

not specify which of four potential 

persons would be required to report the 

contract that results from netting of the 

two gamma security-based swaps 

between the non-dealer and the 

registered clearing agency. 

4. Reporting by Platforms 

With the ability to clear trades, it is 

possible for two counterparties to trade 

anonymously on an SB SEF or an 

exchange. In an anonymous trade, 

because neither counterparty would be 

aware of the name or registration status 

of the other, it might not be possible for 

either counterparty to use the reporting 

hierarchy in Rule 901(a)(1)(i), as 

adopted, to determine who must report 

this initial alpha transaction to a 

registered SDR.273 Therefore, because 

the platform would be the only entity at 

the time of execution, before the 

transaction is submitted for clearing, 

who is certain to know the identity of 

both transaction sides, the Commission 

proposes to assign to the platform the 

duty to report all alpha transactions 

executed on the platform that will be 

submitted to clearing. 

As discussed above in the context of 

reporting obligations for registered 

clearing agencies, the Commission 

preliminarily believes that the costs 

associated with required reporting 

pursuant to the proposed amendments 

could represent a barrier to entry for 

new, smaller trading platforms that 

might not have the ability to comply 

with the proposed reporting 

requirements or for whom the expected 

benefits of compliance might not justify 

the costs of compliance. To the extent 

that the proposed rules and 

amendments might deter new trading 

platforms from entering the securitybased swap market, this could 

negatively impact competition. 

Requiring the execution platform to 

report information associated with 

anonymous transactions, preserves 

counterparties’ anonymity and reduces 

the number of data transmission steps 

between execution and reporting to a 

registered SDR. The Commission, 

however, proposes having the platform 

report all alpha transactions that will be 

submitted to clearing, even those that 

are not anonymous. 

Under proposed Rule 901(a)(1), 

platforms would be required to report 

all transactions occurring on their 

facilities that are submitted to clearing. 

A platform that matches orders and 

executes transactions will possess all of 

the primary and secondary trade 

information necessary to be reported to 

a registered SDR, and proposed Rule 

901(a)(1) would make it unnecessary for 

counterparties to report these 

transactions. This approach is designed 

to result in a more efficient reporting 

process for platform-executed trades 

that are submitted to clearing. By 

reducing the number of steps between 

the generation of transaction data and 

reporting to a registered SDR, the 

Commission preliminarily believes that 

proposed Rule 901(a)(1) would 

minimize the possibility of data 

discrepancies and delays. 

At the same time, the Commission 

recognizes that, because anonymous 

transactions executed on platforms must 

be cleared, the platforms that support 

anonymous trading will more than 

likely select the registered clearing 

agency at which to clear a trade. 

Moreover, because only platforms know 

the identities of counterparties to 

anonymous transactions, they will be 

responsible for submitting these 

transactions for clearing. If the 

infrastructure necessary for submitting 

transactions for clearing is similar to 

that required to report transactions to 

clearing agency-affiliated SDRs, then 

these platforms may prefer to use 

clearing-agency affiliated SDRs for all of 

their transaction reports. This is 

particularly true if the fixed costs to 

platforms of submitting transactions for 

clearing and regulatory reporting are 

high because platforms could avoid 

interfacing separately with clearing 

agencies and unaffiliated SDRs. As a 

result, the proposed rules for platformexecuted trades subsequently submitted 

to clearing might disadvantage 

registered SDRs that are not affiliated 

with registered clearing agencies. 

While the level of security-based 

swap activity that currently takes place 

on platforms and is subsequently 

submitted for clearing is currently low, 

future rulemaking under Title VII could 

cause platform volumes to increase. The 

Commission has proposed, but not 

adopted, rules governing the registration 

and operation of SB SEFs and 

anticipates considering rules to 

determine which security-based swaps 

are subject to mandatory trade execution 

on national securities exchanges or 

registered or exempt SB SEFs.274

5. Alternative Approaches to Reporting 

Platform-Executed Transactions 

For platform-executed transactions 

that are submitted to clearing but are not 

anonymous, a reasonable alternative 

would be for the Commission to require 

these transactions to be reported to a 

registered SDR using the reporting 

hierarchy in Rule 901(a)(2)(ii), as 

adopted. Under such an alternative, a 

platform would have to determine 

which of the trades it executed were 

anonymous and which were not, 

performing due diligence to ensure that 

transaction reports it sends to its 

participants do not violate the 

anonymity of counterparties.275 The 

Commission preliminarily believes that 

it is likely that the platform would pass 

these costs to counterparties, or, 

alternatively, offer to report on behalf of 

the reporting side, for a fee. 

Counterparties who trade on a platform 

would have to determine who among 

them is responsible for reporting their 

trade and would incur the costs of 

reporting to a registered SDR. Moreover, 

such an alternative would exhibit many 

of the shortcomings of the alternative to 

proposed Rule 901(a)(1)(i) discussed in 

Section XI(C)(3), even though it would 

allow the reporting counterparty to 

choose the SDR that receives transaction 

information. 

A second alternative would be to 

assign the reporting duty for all 


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Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 14785 

276See Regulation SBSR Adopting Release, 

Section XXII(C)(1). The Commission’s estimates in 

that release of the number of reportable events 

included all legs of prime brokerage transactions. 

277See Regulation SBSR Adopting Release, 

Section XXII(D)(3). 

278See Philip Bond, Alex Edmans, and Itay 

Goldstein, ‘‘The Real Effects of Financial Markets,’’ 

Annual Review of Financial Economics, Vol. 4 

(October 2012) (reviewing the theoretical literature 

on the feedback between financial market price and 

the real economy). 

279See Sugato Chakravarty, Huseyin Gulen, and 

Stewart Mayhew, ‘‘Informed Trading in Stock and 

Option Markets,’’ Journal of Finance, Vol. 59, No. 

3 (2004) (estimating that the proportion of 

information about underlying stocks revealed first 

in option markets ranges from 10% to 20%); Gary 

Gorton, ‘‘Are Naked Credit Default Swaps Too 

Revealing?’’ (June 4, 2010), available at http://

faculty.som.yale.edu/garygorton/documents/

NakedCDSTooRevealingIDDJune2010.pdf (last 

visited October 2, 2014) (discussing how the 

introduction of CDS contracts may increase the 

information sensitivity of underlying bonds). 

280 Dual registration is likely to occur 

independent of the ability to charge for public 

dissemination of data in the security-based swap 

market. However, the ability to charge for public 

dissemination would add an additional incentive to 

do so. 

platform-executed transactions that are 

submitted to clearing to the registered 

clearing agency. While the registered 

clearing agency receiving information 

about a platform-executed alpha will 

likely have the information necessary 

for reporting—because the registered 

clearing agency will need much of the 

same information about the alpha 

transaction to clear it—the Commission 

preliminarily believes that it would be 

more appropriate to assign the reporting 

duty to the platform. This approach 

would imply a more direct flow of 

information from the point of execution 

on the platform to the registered SDR, 

thus minimizing opportunities for data 

discrepancies or delays. This approach 

would also reduce the need for 

registered clearing agencies to invest 

resources in systems to receive data 

elements from platforms beyond what is 

already required for clearing. 

6. Application of Regulation SBSR to 

Prime Brokerage Transactions 

This release proposes interpretive 

guidance for how Regulation SBSR 

should be applied to prime brokerage 

transactions. As this guidance would 

not create any new duties—but instead 

would merely explain how the series of 

related transactions under a prime 

brokerage arrangement would have to be 

reported and publicly disseminated 

under Regulation SBSR, as adopted— 

there would be no additional costs or 

benefits beyond those already 

considered in the Regulation SBSR 

Adopting Release.276

Prime brokerage transactions involve 

a reallocation of counterparty risk when 

the prime broker interposes itself 

between the counterparties to the 

original transaction (a customer of the 

prime broker and a third-party 

executing dealer). Regulatory reporting 

of this activity would allow relevant 

authorities to more accurately conduct 

market surveillance and monitor 

counterparty risk. As a result of public 

dissemination of all three related 

transactions, market observers would 

have access to information of the 

transaction between the two original 

counterparties and the subsequent two 

transactions with the prime broker, 

thereby allowing them to compare the 

prices and conditions of these 

transactions. This would allow users of 

publicly disseminated data to infer from 

these disseminated reports the fees that 

the prime broker charges for its credit 

intermediation service and separate 

these fees from the transaction price of 

the security-based swap. 

7. Proposed Prohibition on Fees for 

Public Dissemination 

The Commission is proposing new 

Rule 900(tt), which would define the 

term ‘‘widely accessible’’ as used in the 

definition of ‘‘publicly disseminate’’ in 

Rule 900(cc), as adopted, to mean 

‘‘widely available to users of the 

information on a non-fee basis.’’ This 

proposed definition would have the 

effect of prohibiting a registered SDR 

from charging fees for or imposing usage 

restrictions on the security-based swap 

transaction data that it is required to 

publicly disseminate under Regulation 

SBSR. 

Allowing access to transaction 

information without cost or restriction 

allows it to be quickly incorporated into 

security-based swap prices by market 

participants, leading to increased 

informational efficiency of these prices 

and prices in related financial markets. 

Free and unrestricted access to 

transaction prices and volumes 

facilitates a more level playing field for 

market participants, particularly those 

that otherwise have less access to 

security-based swap order flow 

information, potentially enhancing 

competition between market 

participants.277 Finally, unburdened 

access to security-based swap market 

data also could benefit non-securitybased swap financial market 

participants who may use data from the 

security-based swap market as input for 

their decision making, potentially 

improving the efficiency of capital 

allocation and indirectly improving the 

environment for capital formation.278

For instance, if a single-name CDS on a 

reference entity trades more often than 

the underlying bonds, single-name CDS 

transaction prices may help investors in 

evaluating whether the prices of the 

underlying bonds incorporate available 

information about the credit risk of the 

issuer.279

The proposed prohibition on a 

registered SDR charging fees for public 

dissemination of the regulatorily 

mandated security-based swap 

transaction data also is consistent with 

the CFTC’s current prohibition on 

CFTC-registered SDRs charging for 

public dissemination of regulatorily 

mandated swap transaction data. Such 

consistency lessens the incentives for 

SDRs registered with the CFTC to enter 

the security-based swap market and also 

register with the Commission and 

charge for public dissemination of 

security-based swap market data.280

Entering the security-based swap market 

would allow them to charge for public 

dissemination of security-based swap 

market data and use those revenues 

from this business to subsidize their 

operations in the swap market, in which 

they are not permitted to charge for 

public dissemination of swap market 

data. If an SEC-registered SDR charges 

fees for security-based swap data in 

order to subsidize its reporting activity 

in the CFTC regime, then security-based 

swap market participants reporting to 

this SDR could face higher costs than 

those it would face if the SDR 

participated only in the security-based 

swap market. 

The Commission notes two ways in 

which market forces may limit the 

extent of cross-subsidization by 

registered SDRs that also publicly 

disseminate swap data. First, if SDRs 

compete for customers of raw securitybased swap data, then SDRs operating in 

both regimes who choose to subsidize 

their activities in the swap market by 

charging higher fees for security-based 

swap data will likely find themselves at 

a disadvantage relative to SDRs that 

operate only in the security-based swap 

regime who can afford to offer lower 

fees since they, by definition, do not 

cross-subsidize because they do not 

participate in both markets. However, 

this result depends significantly on the 

assumption of a competitive market for 

security-based swap data, which is less 

likely to exist when the number of 

registered of SDRs is small. Second, it 

is possible that there are synergies 

available to SDRs that operate in both 

regimes. These synergies would lower 

the average cost of public dissemination 

by these SDRs and reduce the level of 

subsidies needed to cover these costs. 

As a result, these synergies could limit 


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14786 Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 

281See Sec. Indus. & Fin. Mkts. Ass’n v. CFTC, 

Civil Action No. 13–1916 (PLF), slip op. at 89 

(D.D.C., September 16, 2014) (noting that ‘‘the 

plaintiffs’ associations’ members’ declarants have 

made clear that the members (or their foreign 

affiliates) already have come into compliance with 

the [CFTC] Rules as they apply extraterritorially’’). 282See Rules 907(a)(3) and 907(a)(4), as adopted. 

the size of the subsidy that users of 

security-based swap data would pay to 

users of swap data. 

Additionally, the Commission 

preliminarily believes that requiring free 

and unrestricted access to publiclydisseminated data will reinforce the 

economic effects of Rule 903(b). Rule 

903(b), as adopted, provides that a 

registered SDR may disseminate 

information using UICs (such as product 

IDs or other codes—e.g., reference entity 

identifiers—embedded within the 

product IDs) or permit UICs to be used 

for reporting by its participants only if 

the information necessary to interpret 

such UICs is widely available on a nonfee basis. In the absence of a prohibition 

on fees for or restricted access to 

publicly-disseminated data, the 

Commission is concerned that a 

registered SDR that wished to charge (or 

allow others to charge) users for the 

information necessary to understand 

these UICs—but could not, because of 

Rule 903(b)—might seek to do so 

indirectly by recharacterizing the charge 

as being for public dissemination. The 

Commission preliminarily believes that 

this could reduce the economic benefits 

of Rule 903(b). 

The Commission acknowledges that 

receiving data from market participants; 

cleaning, processing, and storing these 

data; and making these data available to 

the Commission and the public are 

costly services for registered SDRs to 

provide. If charging fees for raw 

security-based swap data is prohibited, 

registered SDRs could employ a number 

of alternative measures to ensure they 

have sufficient resources to comply with 

the statutory and regulatory 

requirements imposed on registered 

SDRs. Some of these measures may have 

negative consequences for market 

participants, reducing the benefits of 

publicly-disseminated data. For 

example, registered SDRs could charge 

fees to recipients of value-added data 

and services. Registered SDRs that 

provide such data and services for a fee 

may have incentives to limit the 

usefulness of transaction information 

through free public feeds, particularly in 

form and manner in which it is made 

available, to push market participants 

towards the fee-based services. Such an 

outcome could hinder the transparency 

goals of the reporting regime because 

those market participants with resources 

sufficient to buy value added data and 

services would continue to have an 

informational advantage over those 

without. 

Registered SDRs also could pass the 

costs of publicly disseminating securitybased swap data through to the 

reporting parties who report transaction 

data to the registered SDR. Direct fees 

imposed on market participants would 

likely be in proportion to the number of 

transactions they execute, with more 

active market participants, who 

contribute more to the production of 

transaction information, paying a larger 

share of the costs of disseminating that 

information. These costs of SDR 

reporting would likely be passed 

through to non-dealers as a component 

of transactions costs. Non-securitybased swap market participants, by 

contrast, would not bear any of the 

costs. This could have the effect of 

security-based swap market participants 

subsidizing other users of the raw 

security-based swap data through free 

public feeds. 

8. Proposed Compliance Schedule for 

Regulation SBSR 

The compliance schedule proposed in 

this release is designed to provide 

affected persons, especially registered 

SDRs and persons with a duty to report 

security-based swap transactions to 

registered SDRs, with time to develop, 

test, and implement reporting and 

dissemination systems. The new 

proposed compliance schedule takes 

into consideration the fact that the 

CFTC’s regulatory reporting and public 

dissemination rules are now in effect. 

As a result, several SDRs have registered 

and are operating under the CFTC 

regime in the swap market, and swap 

market participants have developed 

substantial infrastructure to support 

swap transaction reporting.281 It is 

likely that much of the infrastructure 

implemented in the swap market can be 

repurposed for the security-based swap 

market, and if so, would enable more 

efficient implementation of the 

Commission’s regime for security-based 

swap reporting. 

In the newly proposed compliance 

schedule, the two compliance dates, 

with respect to security-based swaps in 

a particular asset class, are based on the 

date that the first registered SDR that 

can accept security-based swaps in that 

asset class commences operations. This 

approach is designed to prevent 

regulatory reporting and public 

dissemination of security-based swap 

transaction data from being delayed 

while additional SDRs register with the 

Commission and commence operations, 

while still offering time for SDRs and 

market participants to develop the 

necessary policies, procedures, and 

infrastructure to become operational. 

For example, while reporting to a 

registered SDR on a transaction-bytransaction basis would be required on 

the date six months after the first 

registered SDR in an asset class 

commences operations (i.e., proposed 

Compliance Date 1), public 

dissemination would not be required for 

an additional three months (i.e., on 

proposed Compliance Date 2). This 

three-month period is designed to allow 

registered SDRs to evaluate compliance 

with the SDRs’ requirements for 

transaction reports being submitted on a 

mandatory basis beginning on 

Compliance Date 1, and to allow 

persons having the duty to report— 

which, as a result of the amendments 

proposed herein, would include 

platforms, registered clearing agencies, 

and reporting sides—to make any 

necessary adjustments to the transaction 

records that they submit. Registered 

SDRs also would have time to test that 

the appropriate subset of information 

provided in the regulatory report will be 

publicly disseminated, with flags as 

required by the registered SDR’s policies 

and procedures.282

There are potential drawbacks to the 

proposed compliance schedule as well. 

First, new entrants into the SDR market 

might be at a competitive disadvantage 

since they would have to adhere to 

compliance dates that were set based on 

registration of the first SDR in that asset 

class that commences operations. This 

would be true particularly if persons 

with a duty to report face high 

switching costs between SDRs and 

could be locked in to the first registered 

SDR with which they engage. Second, 

the proposed compliance schedule 

hinges on a person registering and then 

commencing operations as an SDR. As 

a result, reporting to an SDR, and the 

associated public dissemination, might 

not occur for an extended period of 

time. 

The Commission preliminarily 

believes, however, that most persons 

that have the desire and ability to 

operate as SEC-registered SDRs are 

already operational in the swaps market 

as CFTC-registered SDRs, and each 

should have a strong incentive to submit 

applications to register with the 

Commission quickly. Thus, there is less 

likelihood of multiple applications 

arriving over an extended period of 

time, which could have been the case 

when the Commission originally 

proposed Rules 910 and 911 in the 

Regulation SBSR Proposing Release in 

2010, before the CFTC had finalized its 


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Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 14787 

283 44 U.S.C. 3501 et seq. 

284See Regulation SBSR Adopting Release, 

Section XXI. 

285See Regulation SBSR Adopting Release, 

Section XXI(B). The Commission derived its 

estimate from the following: (355 hours (one-time 

hourly burden for establishing and OMS) + 172 

hours (one-time hourly burden for establishing 

security-based swap reporting mechanisms) + 180 

hours (one-time hourly burden for compliance and 

ongoing support) = 707 hours (one-time total hourly 

burden). See Regulation SBSR Proposing Release, 

75 FR 75248–50, notes 186, 194, and 201. (436 

hours (annual-ongoing hourly burden for internal 

order management) + 33.3 hours (revised annualongoing hourly burden for security-based swap 

reporting mechanisms) + 218 hours (annualongoing hourly burden for compliance and ongoing 

support) = 687.3 hours (one-time total hourly 

burden. See id. at 75248–50, notes 187 and 201 (707 

one-time hourly burden + 687 revised annualongoing hourly burden = 1,394 total first-year 

hourly burden). 

286See Regulation SBSR Adopting Release, 

Section XXI(B). The Commission derived its 

estimate from the following: (1,394 hours per 

reporting side × 300 reporting sides) = 418,200 

hours. 

287See Regulation SBSR Adopting Release, 

Section XXI(B). See Cross-Border Proposing 

Release, 78 FR 31112–15. 

288See Regulation SBSR Adopting Release, 

Section XXI(B). The Commission derived its 

estimate from the following: (687 hours per 

reporting side × 300 reporting sides) = 206,100 

hours. 

289See Regulation SBSR Adopting Release, 

Section XXI(B). The Commission derived its 

estimate from the following: ($201,000 per reporting 

side × 300 reporting sides) = $60,300,000. See 

Continued 

rules and SDRs were registered by the 

CFTC. The newly proposed compliance 

schedule could give added incentive to 

avoid delaying the submission of an 

application for registration, and to 

commence operation as an SECregistered SDR as quickly as possible. 

This result would help the Commission 

and other relevant authorities obtain 

more complete information about the 

security-based swap market for 

oversight purposes as quickly as 

possible, and also allow the public to 

obtain price, volume, and transaction 

information about all security-based 

swaps as quickly as possible. 

IX. Paperwork Reduction Act 

Certain provisions of these proposed 

amendments to Regulation SBSR 

contain ‘‘collection of information 

requirements’’ within the meaning of 

the Paperwork Reduction Act of 1995 

(‘‘PRA’’).283 As discussed in Section I, 

supra, these proposed amendments to 

Regulation SBSR would impact Rules 

900, 901, 905, 906, and 908. This release 

also proposes guidance for complying 

with certain aspects of Regulation SBSR 

and proposes new compliance dates for 

the rules in Regulation SBSR for which 

the Commission has not specified a 

compliance date. The titles of the 

collections for Regulation SBSR are: (1) 

Rule 901—Reporting Obligations—For 

Reporting Sides; (2) Rule 901— 

Reporting Obligations—For Registered 

SDRs; (3) Rule 902—Public 

Dissemination of Transaction Reports; 

(4) Rule 904—Operating Hours of 

Registered Security-Based Swap Data 

Repositories; (5) Rule 905—Correction 

of Errors in Security-Based Swap 

Information—For Reporting Sides; (6) 

Rule 905—Correction of Errors in 

Security-Based Swap Information— 

Non-Reporting Sides; (7) Rule 906(a)— 

Other Duties of All Participants—For 

Registered SDRs; (8) Rule 906(a)—Other 

Duties of All Participants—For NonReporting Sides; (9) Rule 906(b)—Other 

Duties of All Participants—For All 

Participants; (10) Rule 906(c)—Other 

Duties of All Participants—For Covered 

Participants; (11) Rule 907—Policies 

and Procedures of Registered SecurityBased Swap Data Repositories; and (12) 

Rule 908(c)—Substituted Compliance 

(OMB Control No. 3235–0718). The 

estimated collection of information 

burdens for Regulation SBSR are 

contained in the Regulation SBSR 

Adopting Release.284 The estimated 

changes to these burdens and costs that 

would result from the proposed rules 

and amendments are discussed below. 

Compliance with these collections of 

information requirements is mandatory. 

The Commission is submitting these 

collections of information to the Office 

of Management and Budget (‘‘OMB’’) for 

review in accordance with 44 U.S.C. 

3507(d) and 5 CFR 1320.11. An agency 

may not conduct or sponsor, and a 

person is not required to respond to, a 

collection of information unless the 

agency displays a currently valid 

control number. 

A. Definitions—Rule 900 

Rule 900 sets forth definitions of 

various terms used in Regulation SBSR. 

In this release, the Commission is 

proposing to amend the definition of 

‘‘participant’’ in Rule 900(u) and to 

create a new defined term ‘‘widely 

accessible’’—in proposed Rule 900(tt)— 

that is used in the definition of 

‘‘publicly disseminate’’ in Rule 900(cc), 

as adopted. The proposed definition of 

‘‘widely accessible’’ would have to 

effect of prohibiting a registered SDR 

from charging fees for or imposing usage 

restrictions on the security-based swap 

transaction data that it is required to 

publicly disseminate under Regulation 

SBSR. 

Although the Commission discusses 

certain costs associated with these 

proposed definitions in this Section, the 

Commission does not believe that these 

changes themselves would result in a 

‘‘collection of information’’ within the 

meaning of the PRA. 

B. Reporting Obligations—Rule 901 

1. Rule 901—As Adopted 

Rule 901, as adopted, specifies, with 

respect to each reportable event 

pertaining to covered transactions, who 

is required to report, what data must be 

reported, when it must be reported, 

where it must be reported, and how it 

must be reported. Rule 901(a), as 

adopted, establishes a ‘‘reporting 

hierarchy’’ that specifies the side that 

has the duty to report a security-based 

swap that is a covered transaction. 

Pursuant to Rule 901(b), as adopted, if 

there is no registered SDR that will 

accept the report required by Rule 

901(a), the person required to make the 

report must report the transaction to the 

Commission. Rule 901(c) sets forth the 

primary trade information and Rule 

901(d) sets forth the secondary trade 

information that must be reported. Rule 

901(e) requires the reporting of life cycle 

events and adjustments due to life cycle 

events, which pursuant to Rule 901(j) 

must be reported within 24 hours of the 

time of occurrence, to the entity to 

which the original transaction was 

reported. Rule 901(f) requires a 

registered SDR to timestamp, to the 

second, any information submitted to it 

pursuant to Rule 901, and Rule 901(g) 

requires a registered SDR to assign a 

transaction ID to each security-based 

swap, or establish or endorse a 

methodology for transaction IDs to be 

assigned by third parties. Rule 901(h) 

requires reporting sides to electronically 

transmit the information required by 

Rule 901 in a format required by the 

registered SDR. Rule 901(i) requires 

reporting of pre-enactment securitybased swaps and transitional securitybased swaps to the extent that 

information about such transactions is 

available. 

For Reporting Sides. The Commission 

estimated that Rule 901, as adopted, 

will impose an estimated total first-year 

burden of approximately 1,394 hours 285

per reporting side for a total first-year 

burden of 418,200 hours for all 

reporting sides.286 The Commission 

estimated that Rule 901, as adopted, 

will impose ongoing annualized 

aggregate burdens of approximately 687 

hours 287 per reporting side for a total 

aggregate annualized cost of 206,100 

hours for all reporting sides.288 The 

Commission further estimated that Rule 

901, as adopted, will impose initial and 

ongoing annualized dollar cost burdens 

of $201,000 per reporting side, for total 

aggregate initial and ongoing annualized 

dollar cost burdens of $60,300,000.289


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Cross-Border Proposing Release, 78 FR 31113–15. 

The Commission originally estimated this burden 

based on discussions with various market 

participants. See Regulation SBSR Proposing 

Release, 75 FR 75247–50. 

290See Regulation SBSR Adopting Release, 

Section XXI(B). See Regulation SBSR Proposing 

Release, 75 FR 75250. This figure is based on the 

following: [(1,200) + (1,520)] = 2,720 burden hours, 

which corresponds to 272 burden hours per 

registered SDR. 

291See Regulation SBSR Adopting Release, 

Section XXI(B). 

292See Regulation SBSR Adopting Release, 

Section XXI(B)(3). 

293See id. 

294See id. 

295See Regulation SBSR Adopting Release, 

Section XXI(B)(4). 

For Registered SDRs. The Commission 

estimated that the first-year aggregate 

annualized burden on registered SDRs 

associated with Rules 901(f) and 901(g) 

will be 2,820 burden hours, which 

corresponds to 282 burden hours per 

registered SDR.290 The Commission also 

estimated that the ongoing aggregate 

annualized burden associated with 

Rules 901(f) and 901(g) will be 1,520 

burden hours, which corresponds to 152 

burden hours per registered SDR.291

2. Rule 901—Proposed Amendments 

The proposed amendments to Rule 

901 would establish certain 

requirements relating to the reporting of 

security-based swap transactions to a 

registered SDR. Rule 901 of Regulation 

SBSR, as adopted, contained ‘‘collection 

of information requirements’’ within the 

meaning of the PRA, and the proposed 

amendments to Rule 901 contain 

additional ‘‘collection of information 

requirements’’ within the meaning of 

the PRA, which are discussed below. 

The title of this collection is ‘‘Rule 

901—Reporting Obligations for 

Platforms and Clearing Agencies.’’ 

a. Summary of Collection of Information 

The Commission is proposing 

reporting obligations for those securitybased swaps that are clearing 

transactions or that are executed on a 

platform and will be submitted to 

clearing. In order to facilitate such 

reporting, the Commission is proposing 

Rules 901(a)(1), 901(a)(2)(i), and 

901(a)(3). Pursuant to new subparagraph 

(1) of Rule 901(a), if a security-based 

swap is executed on a platform and will 

be submitted to clearing, the platform 

on which the transaction was executed 

shall have the duty to report the 

transaction to a registered SDR. The 

Commission also is proposing a new 

subparagraph (2)(i) of Rule 901(a) that 

would assign the reporting duty for a 

clearing transaction to the registered 

clearing agency that is a counterparty to 

the security-based swap. 

The Commission also is proposing to 

add a new subparagraph (3) to Rule 

901(a) that would require any person 

that has a duty to report a security-based 

swap that is submitted to clearing— 

which would be a platform or a 

reporting side—to provide the registered 

clearing agency with the transaction ID 

of the alpha and the identity of the 

registered SDR to which the alpha will 

be reported or has been reported. 

b. Proposed Use of Information 

The security-based swap transaction 

information that would be required by 

the proposed amendments to Rule 901 

would be used by registered SDRs, 

market participants, the Commission, 

and other relevant authorities. The 

information reported by platforms and 

registered clearing agencies pursuant to 

Rule 901 would be used by registered 

SDRs to publicly disseminate reports of 

security-based swap transactions, as 

well as to offer a resource for the 

Commission and other relevant 

authorities to obtain detailed 

information about the security-based 

swap market. Market participants also 

would use the information about these 

transactions that is publicly 

disseminated, among other things, to 

assess the current market for securitybased swaps and any underlying 

securities and to assist in the valuation 

of their own positions. The Commission 

and other relevant authorities would use 

information about security-based swap 

transactions reported to and held by 

registered SDRs to monitor and assess 

systemic risks, as well as to examine for 

and consider whether to take 

enforcement action against potentially 

abusive trading behavior, as 

appropriate. 

c. Respondents 

In the Regulation SBSR Adopting 

Release, the Commission estimated 300 

reporting side respondents and that, 

among the 300 reporting sides, 

approximately 50 are likely to be 

required to register with the 

Commission as security-based swap 

dealers and approximately five are 

likely to register as major security-based 

swap participants.292 The Commission 

noted that these 55 reporting sides 

likely will account for the vast majority 

of recent security-based swap 

transactions and reports and that there 

are only a limited number of securitybased swap transactions that do not 

include at least one of these larger 

counterparties on either side.293 Finally, 

the Commission estimated that the 

number of registered SDRs would not 

exceed ten.294

Proposed Rules 901(a)(1) and 

901(a)(2)(i) would assign reporting 

duties for security-based swap 

transactions, in certain enumerated 

cases set forth in these rules, to 

platforms and registered clearing 

agencies, respectively. The Commission 

preliminarily believes that these 

proposed amendments to Rule 901(a) 

would result in 14 additional 

respondents incurring the duty to report 

under Regulation SBSR. Specifically, 

the Commission believes that there 

would be ten platforms (exchanges and 

SB SEFs) and four registered clearing 

agencies that would incur such duties. 

Proposed Rule 901(a)(3) would require a 

person—either the platform upon which 

the security-based swap was executed or 

the reporting side for those securitybased swaps other than clearing 

transactions—to report, for those 

security-bases swaps submitted to a 

registered clearing agency, the 

transaction ID of the submitted securitybased swap and the identity of the 

registered SDR to which the transaction 

will be or has been reported. The 

Commission preliminarily believes that 

proposed Rule 901(a)(3) would place 

reporting obligations on 300 reporting 

sides and 10 platforms. 

d. Total Initial and Annual Reporting 

and Recordkeeping Burdens 

i. Platforms and Registered Clearing 

Agencies 

Pursuant to Rule 901, all securitybased swap transactions must be 

reported to a registered SDR or to the 

Commission. Together, paragraphs (a), 

(b), (c), (d), (e), (h), and (j) of Rule 901 

set forth the parameters that reporting 

entities must follow to report securitybased swap transactions. Because 

platforms and registered clearing 

agencies now would have the duty to 

report, initial and ongoing burdens 

would be placed on these entities. The 

Commission preliminarily believes that 

these burdens will be a function of, 

among other things, the number of 

reportable events and the data elements 

required to be reported for each such 

event. 

In the Regulation SBSR Adopting 

Release, the Commission estimated that 

respondents would face three categories 

of burdens to comply with Rule 901.295

The Commission preliminarily believes 

that platforms and registered clearing 

agencies would face the same categories 

of burdens as those identified in the 

Regulation SBSR Adopting Release for 

other types of respondents. First, each 

platform and registered clearing agency 


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296 In the Regulation SBSR Adopting Release, the 

Commission discussed the development, by 

reporting sides, of an internal order and trade 

management system. The Commission believes that 

the costs of developing a transaction processing 

system are comparable to the costs discussed 

therein. Although the actual reporting infrastructure 

needed by platforms and registered clearing 

agencies could have some attributes that differ from 

the attributes of an internal order and trade 

management system, the Commission nonetheless 

preliminarily believes that the cost of implementing 

a transaction processing system, and establishing an 

appropriate compliance program and support for 

the operation of the system, will be similar to the 

costs for reporting sides discussed in the Regulation 

SBSR Adopting Release. 

297 In the Regulation SBSR Adopting Release, the 

Commission reiterated its belief that reporting 

specific security-based swap transactions to a 

registered SDR—separate from the establishing of 

infrastructure and compliance systems that support 

reporting—would impose an annual aggregate cost 

of approximately $5,400,000. See Regulation SBSR 

Adopting Release, Section XXI(B)(4). 

298The Commission derived its estimate from the 

following: (355 hours (one-time hourly burden for 

establishing and OMS) + 172 hours (one-time 

hourly burden for establishing security-based swap 

reporting mechanisms) + 180 hours (one-time 

hourly burden for compliance and ongoing support) 

= 707 hours (one-time total hourly burden). See 

Regulation SBSR Proposing Release, 75 FR 75248– 

50, notes 186, 194, and 201. (436 hours (annualongoing hourly burden for order management) + 

218 hours (annual-ongoing hourly burden for 

compliance and ongoing support) = 654 hours (onetime total hourly burden. See id. at 75248–50, notes 

187 and 201 (707 one-time hourly burden + 654 

revised annual-ongoing hourly burden = 1,361 total 

first-year hourly burden). 

299See Regulation SBSR Adopting Release, 

Section XXI(B)(4). 

300The Commission derived its estimate from the 

following: (1,361 hours per reporting entity × 14 

platforms and registered clearing agencies) = 19,054 

hours. 

301See supra note 298. 

302The Commission derived its estimate from the 

following: (654 hours per reporting entity × 14 

platforms and registered clearing agencies) = 9,156 

hours. 

303This figure is based on the sum of perreporting entity estimates for connectivity to SDRs 

for data reporting, as follows: [($100,000 hardwareand software-related expenses, including necessary 

back-up and redundancy, per SDR connection) × (2 

SDR connections per reporting entity)] + [($250/

gigabyte of storage capacity) × (4 gigabytes of 

storage capacity)] = $201,000. See Regulation SBSR 

Proposing Release, 75 FR 75248–49, notes 188 and 

193. 

304The Commission derived its estimate from the 

following: ($201,000 per reporting side × 14 

reporting sides) = $2,814,000. See also Cross-Border 

Proposing Release, 78 FR 31112–15. 

305See Regulation SBSR Adopting Release, 

Section XXI(B)(4)(b). 

306See id. 

307The Commission is proposing to amend Rule 

901(a)(2) to require a registered clearing agency to 

be the reporting side for clearing transactions to 

which it is a counterparty. The Commission is 

further proposing to amend Rule 901(e)(1) to 

provide that a ‘‘registered clearing agency shall 

report whether or not it has accepted a securitybased swap for clearing.’’ Proposed Rule 

901(a)(2)(i), discussed above, would require 

registered clearing agencies to report security-based 

swap transaction information for clearing 

transactions. These reportable events have been 

included in the Commission’s estimates of the 

number of reportable events for the purposes of 

Rule 901. In arriving at the of 1 million reporting 

events, the Commission has included the following: 

(1) The termination of the original or ‘‘alpha’’ 

security-based swap; (2) the creation of beta and 

gamma security-based swaps; (3) the termination of 

beta, gamma, and any previous open positions 

during each netting cycle; and (4) any other 

transactions that are entered into by the registered 

clearing agency. 

308See supra note 235. 

309The Commission preliminarily believes that 

platforms will be responsible only for the reporting 

of any initial security-based swaps that are executed 

on their facilities. Since only platform-executed 

security-based swaps that will be submitted to a 

registered clearing agency for clearing are subject to 

this proposal, platforms would not be responsible 

for any life cycle event reporting under Rule 901(e). 

The Commission estimates that platforms would be 

responsible for reporting only approximately one 

third of the 360,000 security-based swaps (or 

120,000 security-based swaps) and registered 

clearing agencies (as a result of the creation of new 

security-based swaps during the clearing process) 

would be responsible for the reporting of the 

remaining two-thirds of security-based swaps (or 

250,000 security-based swaps). 

310See Regulation SBSR Adopting Release, 

Section XXI(B)(4). In the Regulation SBSR 

Proposing Release, the Commission estimated that 

Continued 

would likely have to develop the ability 

to capture the relevant transaction 

information.296 Second, each platform 

and registered clearing agency would 

have to implement a reporting 

mechanism. Third, each platform and 

registered clearing agency would have 

to establish an appropriate compliance 

program and support for the operation 

of any system related to the capture and 

reporting of transaction information. 

The Commission preliminarily believes 

that platforms and registered clearing 

agencies would need to develop 

capabilities similar to those highlighted 

in the Regulation SBSR Adopting 

Release in order to be able to capture 

and report security-based swap 

transactions. The Commission also 

preliminarily believes that, once a 

platform or registered clearing agency’s 

reporting infrastructure and compliance 

systems are in place, the burden of 

reporting each individual reportable 

event will be small when compared to 

the burdens of establishing the reporting 

infrastructure and compliance 

systems.297 The Commission 

preliminarily believes that all of the 

reportable events, for which platforms 

and registered clearing agencies would 

be responsible for reporting, will be 

reported through electronic means. 

The Commission estimates that the 

total burden placed upon reporting 

sides as a result of Rule 901 would be 

approximately 1,361 hours 298 per 

reporting side during the first year.299

The Commission preliminarily believes 

that this per-entity cost would be the 

same for platforms and registered 

clearing agencies, resulting in a total 

first-year burden of 19,054 hours for all 

platforms and registered clearing 

agencies under the proposed 

amendments to Rule 901.300 The 

Commission estimates that the proposed 

amendments to Rule 901 would impose 

ongoing annualized aggregate burdens 

of approximately 654 hours 301 per 

reporting entity for a total aggregate 

annualized cost of 9,156 hours for all 

platforms and registered clearing 

agencies.302 The Commission further 

preliminarily estimates that the 

proposed amendments to Rule 901 

would impose initial and ongoing 

annualized dollar cost burdens of 

$201,000 per reporting entity,303 for 

total aggregate initial and ongoing 

annualized dollar cost burdens of 

$2,814,000.304

In the Regulation SBSR Adopting 

Release, the Commission revised its 

previous estimates of the number of 

reportable events associated with 

security-based swap transactions to 

approximately 3 million reportable 

events per year under Rule 901, an 

estimate that the Commission continues 

to believe is valid for the purposes of 

the Regulation SBSR Proposed 

Amendments.305 The Commission 

estimated in the Regulation SBSR 

Adopting Release that Rule 901(a), as 

adopted in that release, will result in 

approximately 2 million reportable 

events related to covered 

transactions.306

The Commission preliminarily 

estimates that 1 million of the 3 million 

total reportable events would be 

reported as a result of the proposed 

amendments to Rule 901.307 The 

Commission believes that these 1 

million reportable events would include 

the initial reporting of the securitybased swap by platforms and clearing 

agencies as well as the reporting of any 

life cycle events. The Commission 

preliminarily estimates that of the 1 

million reportable events, 

approximately 370,000 would involve 

the reporting of new security-based 

swap transactions, and approximately 

630,000 would involve the reporting of 

life cycle events under Rule 901(e).308

As a result, the Commission 

preliminarily estimates that platforms 

will be responsible for the reporting of 

approximately 120,000 security-based 

swaps.309 The Commission 

preliminarily estimates that the 

proposed amendments to Rule 901(a) 

would result in platforms having a total 

burden of 600 hours attributable to the 

reporting of security-based swaps by 

platform to registered SDRs under Rules 

901(c) and 901(d) over the course of a 

year.310 The Commission preliminarily 


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it would take approximately 0.005 hours for each 

security-based swap transaction to be reported. See 

75 FR 75249, note 195. The Commission calculates 

the following: ((120,000 × 0.005)/(10 platforms)) = 

60 burden hours per platform or 600 total burden 

hours attributable to the reporting of security-based 

swaps. 

311See Regulation SBSR Adopting Release, 

Section XXI(B)(4). In the Regulation SBSR 

Proposing Release, the Commission estimated that 

it would take approximately 0.005 hours for each 

security-based swap transaction to be reported. See 

75 FR 75249, note 195. The Commission calculates 

the following: ((250,000 × 0.005)/(4 registered 

clearing agencies)) = 312.5 burden hours per 

registered clearing agency or 1,250 total burden 

hours attributable to the reporting of security-based 

swaps. 

312See Regulation SBSR Adopting Release, 

Section XXI(B)(4). In the Regulation SBSR 

Proposing Release, the Commission estimated that 

it would take approximately 0.005 hours for each 

security-based swap transaction to be reported. See 

75 FR 75249, note 195. The Commission calculates 

the following: ((630,000 × 0.005)/(4 registered 

clearing agencies)) = 787.5 burden hours per 

registered clearing agency or 3,150 total burden 

hours attributable to the reporting of life cycle 

events under Rule 901(e). 

313As is discussed immediately above, the 

Commission preliminarily believes that registered 

clearing agencies would incur a burden of 1,250 

hours attributable to the reporting of security-based 

swaps pursuant to proposed Rule 901(a)(2)(i) along 

with a burden of 3,150 hours attributable to the 

reporting of life cycle events under Rule 901(e). As 

discussed in note 309, supra, platforms would not 

be responsible for the reporting of any life cycle 

events of any platform-executed security-based 

swap that will be submitted to clearing. 

314The required infrastructure for platforms and 

related burdens and costs are discussed in Section 

IX(B)(2)(d)(i), supra. For reporting sides, the 

required infrastructure and related burdens and 

costs are already accounted for in the Regulation 

SBSR Adopting Release, Section XXI(B)(4). The 

additional burdens discussed in this paragraph 

related to the ability to capture the additional 

specific data elements, as would be required by 

proposed Rule 901(a)(3), would be incremental 

burdens that are in addition to the previously 

established infrastructure burdens and costs. 

315The Commission preliminarily estimates that 

the additional burdens would be: [(Sr. Programmer 

(5 hours) + Sr. Systems Analyst (5 hours)) = 10 

burden hours (development of the ability to capture 

transaction information); (Sr. Programmer (3 hours) 

+ Sr. Systems Analyst (3 hours)) = 6 burden hours 

(implementation of reporting mechanism)]. The 

total one-time burden associated with the 

amendments to 901(a) would be 16 burden hours 

per platform and reporting side for a total one-time 

burden of 4960 hours (16 × 310 (300 reporting sides 

+ 10 platforms)). 

316The Commission preliminarily estimates that 

the additional burdens would be: [(Sr. Programmer 

(5 hours) + Sr. Systems Analyst (5 hours)) = 10 

burden hours (maintenance of transaction capture 

system); (Sr. Programmer (1 hour) + Sr. Systems 

Analyst (1 hour)) = 2 burden hours (maintenance 

of reporting mechanism)]. The total ongoing burden 

associated with the proposed amendments to Rule 

901(a) would be 12 burden hours per platform and 

reporting side for a total ongoing burden of 3,720 

hours (12 × 310 (300 reporting sides + 10 

platforms)). 

estimates that the proposed 

amendments to Rule 901(a) would result 

in registered clearing agencies having a 

total burden of 1,250 hours attributable 

to the reporting of security-based swaps 

to registered SDRs over the course of a 

year.311 The Commission preliminarily 

estimates that the proposed 

amendments to Rule 901(a) would result 

in registered clearing agencies having a 

total burden of 3,150 hours attributable 

to the reporting of life cycle events to 

registered SDRs under Rule 901(e) over 

the course of a year.312 The Commission 

preliminarily believes that the proposed 

amendments would result in a total 

reporting burden for registered clearing 

agencies under Rules 901(c) and (d) 

along with the reporting of life cycle 

events under Rule 901(e) of 4,400 

burden hours.313 The Commission 

believes that all reportable events that 

would be reported by platforms and 

registered clearing agencies pursuant to 

these proposed amendments would be 

reported through electronic means. 

The Commission recognizes that some 

entities that would qualify as platforms 

or registered clearing agencies may have 

already spent time and resources 

building the infrastructure that will 

support their eventual reporting of 

security-based swaps. The Commission 

notes that, as a result, the burdens and 

costs estimated herein could be greater 

than those actually incurred by affected 

parties as a result of compliance with 

the proposed amendments to Rule 

901(a). Nonetheless, the Commission 

believes that its estimates represent a 

reasonable upper bound of the actual 

burdens and costs required to comply 

with the paperwork burdens associated 

with the proposed amendments to Rule 

901(a). 

ii. Platforms and Reporting Sides 

Proposed Rule 901(a)(3) would 

require a person, either the platform 

upon which the security-based swap 

was executed or the reporting side for 

those security-based swaps other than 

clearing transactions, to report, for those 

security-bases swaps submitted to a 

registered clearing agency, the 

transaction ID of the submitted securitybased swap and the identity of the 

registered SDR to which the transaction 

will be or has been reported. 

Rule 901(a)(3) would require certain 

information (transaction ID and the 

identity of the registered SDR) to be 

reported to a registered clearing agency 

only if such security-based swap has 

been submitted to a registered clearing 

agency for clearing. As a result, 

platforms and reporting sides required 

to report transaction IDs and the 

identity of a registered SDR will already 

have put into place any infrastructure 

needed to report these security-based 

swaps to a registered clearing agency.314

However, the Commission does believe 

that including these items would result 

in additional development and 

maintenance burdens. Specifically, the 

Commission preliminarily believes that 

the additional one-time burden related 

to the development of the ability to 

capture the additional specific data 

elements required by proposed Rule 

901(a)(3) would be 10 burden hours and 

the additional one-time burden related 

to the implementation of a reporting 

mechanism would be 6 burden hours, 

per platform and reporting side.315 The 

Commission preliminarily believes that 

the additional ongoing burden related to 

the ability to capture the additional 

specific data elements required by 

proposed Rule 901(a)(3) would be 10 

burden hours and the additional 

ongoing burden related to the 

maintenance of the reporting 

mechanism would be 2 burden hours, 

per platform and reporting side.316

iii. Bunched Order Executions and 

Allocations 

As explained in Section VIII of the 

Regulation SBSR Adopting Release and 

Section III, supra, bunched order 

executions and allocations must be 

reported to a registered SDR pursuant to 

Rule 901(a). The Regulation SBSR 

Adopting Release explains how 

Regulation SBSR applies to executed 

bunched orders that are reported 

pursuant to the reporting hierarchy in 

Rule 901(a)(2)(ii), as adopted. That 

release also explains how Regulation 

SBSR applies to the security-based 

swaps that result from allocation of an 

executed bunched order, if the resulting 

security-based swaps are uncleared. In 

Section III, supra, the Commission 

explained how Regulation SBSR, as 

adopted and as proposed to be amended 

by this release, would apply to a 

platform-executed bunched order that 

will be submitted to clearing, and the 

security-based swaps that result from 

the allocation of any bunched order 

execution, if the resulting security-based 

swaps are cleared. The Commission 

included in its estimates of the number 

of reportable events in the Regulation 

SBSR Adopting Release security-based 

swaps that result from the allocation of 

bunched order executions that would be 

submitted to clearing, if the resulting 

security-based swaps are cleared. Thus, 

there is no burden associated with 

bunched order executions and 

allocations that has not already been 

taken into account. 

iv. Prime Brokerage Transactions 

The Commission preliminarily 

believes that in a prime brokerage 

transaction the customer/executing 

dealer transaction is a security-based 


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317As is discussed in Section VIII(D)(6), supra, 

the Commission does not believe that the 

interpretive guidance would create any new duties. 

As a result, the Commission does not believe that 

there would be any burdens or any additional costs 

or benefits beyond those already considered in the 

Regulation SBSR Adopting Release. The 

Commission’s estimates of the number of reportable 

events included all legs of prime brokerage 

transactions. See supra note 276. 

318See SDR Adopting Release, Section VI(E)(4). 

319See Regulation SBSR Adopting Release, 

Section XXI(B). 

320See id. 

321See id. 

322See id. 

323See id. 

324The Commission derived its estimate from the 

following: (1,361 hours per platform × 10 platforms) 

= 13,610 hours. 

325See Cross-Border Proposing Release, 78 FR 

31112–15. 

326The Commission derived its estimate from the 

following: (654 hours per platform × 10 platforms) 

= 6,540 hours. 

327This figure is based on the sum of per-entity 

estimates for connectivity to SDRs for data 

reporting, as follows: [($100,000 hardware- and 

software-related expenses, including necessary 

back-up and redundancy, per SDR connection) × (2 

SDR connections per platform)] + [($250/gigabyte of 

storage capacity) × (4 gigabytes of storage capacity)] 

= $201,000. 

328The Commission derived its estimate from the 

following: ($201,000 per platform × 10 platforms) = 

$2,010,000. See also Cross-Border Proposing 

Release, 78 FR 31112–15. 

329The Commission derived its estimate from the 

following: ((1,361 hours + 60 hours + 28) per 

platform × 10 platforms) = 14,490 hours. 

swap that must be reported pursuant to 

Rule 901(a)(2)(ii), as adopted. The 

Commission further preliminarily 

believes that the prime broker/customer 

and prime broker/executing dealer 

transactions also are security-based 

swaps that must be reported pursuant to 

Rule 901(a)(2)(ii). In this release, the 

Commission clarifies that prime 

brokerage transactions were included in 

the estimates of security-based swap 

transactions that are required to be 

reported, and as a result, do not 

represent any new burdens.317

e. Recordkeeping Requirements 

Apart from the duty to report certain 

transaction information to a registered 

SDR, the Commission does not believe 

that Rule 901 would result in any 

recordkeeping requirement for platform 

and reporting sides. As is stated in the 

SDR Adopting Release, Rule 13n–5(b)(4) 

under the Exchange Act requires an SDR 

to maintain the transaction data and 

related identifying information that it 

collects for not less than five years after 

the applicable security-based swap 

expires, and historical positions for not 

less than five years.318 Accordingly, 

security-based swap transaction reports 

received by a registered SDR pursuant to 

Rule 901 would be required to be 

retained by the registered SDR for not 

less than five years after the applicable 

security-based swap expires. The 

Commission does not believe that 

reporting of security-based swap 

transactions by platforms or registered 

clearing agencies—or the inclusion of 

two additional data elements—would 

have any impact on the PRA burdens of 

registered SDRs as detailed in the SDR 

Adopting Release. 

f. Collection of Information Is 

Mandatory 

Each collection of information 

discussed above is mandatory. 

g. Confidentiality of Responses to 

Collection of Information 

A registered SDR, pursuant to 

Sections 13(n)(5) of the Exchange Act 

and Rules 13n–4(b)(8) and 13n–9 

thereunder, is required to maintain the 

privacy of the security-based swap 

information it receives. For the majority 

of security-based swap transactions, the 

information collected pursuant to Rule 

901(c) by a registered SDR will be 

publicly disseminated. However, certain 

security-based swaps are not subject to 

Rule 902’s public dissemination 

requirement; therefore, information 

about these transactions will not be 

publicly available. In addition, for all 

security-based swaps, the information 

collected pursuant to Rule 901(d) is for 

regulatory purposes only and will not be 

widely available to the public. To the 

extent that the Commission receives 

confidential information pursuant to 

this collection of information, such 

information would be kept confidential, 

subject to the provisions of applicable 

law. 

3. Rule 901—Aggregate Total PRA 

Burdens and Costs 

Based on the foregoing, the 

Commission estimates the following 

aggregate total PRA burdens and costs, 

by category of entity, resulting from 

Rule 901, as adopted and as proposed to 

be amended herein. 

a. For Platforms 

As discussed above, the Regulation 

SBSR Adopting Release, the 

Commission estimated burdens and 

costs for reporting sides under Rule 901. 

The Commission estimated that Rule 

901, as adopted, will impose an 

estimated total first-year burden of 

approximately 1,394 hours 319 per 

reporting side for a total first-year 

burden of 418,200 hours for all 

reporting sides.320 The Commission 

estimated that Rule 901, as adopted, 

will impose ongoing annualized 

aggregate burdens of approximately 687 

hours 321 per reporting side for a total 

aggregate annualized cost of 206,100 

hours for all reporting sides.322 The 

Commission further estimated that Rule 

901, as adopted, will impose initial and 

ongoing annualized dollar cost burdens 

of $201,000 per reporting side, for total 

aggregate initial and ongoing annualized 

dollar cost burdens of $60,300,000.323

The Commission preliminarily 

believes that platforms would have a 

first-year burden of 1,361 hours per 

platform, for a total first-year burden of 

13,610 hours under proposed Rule 

901(a)(1).324 The Commission also 

preliminarily estimates that proposed 

Rule 901(a)(1) would impose ongoing 

annualized aggregate burdens of 

approximately 654 hours 325 per 

platform for a total aggregate annualized 

burden of 6,540 hours for all 

platforms.326 The Commission further 

preliminarily estimates that the 

proposed Rule 901(a)(1) would impose 

initial and ongoing annualized dollar 

cost burdens of $201,000 per 

platform,327 for total aggregate initial 

and ongoing annualized dollar cost 

burdens of $2,010,000.328

The Commission preliminarily 

estimates that the proposed 

amendments to Rule 901(a) would result 

in platforms having a total burden of 

600 hours attributable to the reporting of 

security-based swaps to registered SDRs 

over the course of a year, or 60 hours 

per platform. 

The Commission preliminarily 

believes that the additional one-time 

burden related to the development of 

the ability to capture the relevant 

transaction information, required by 

proposed Rule 901(a)(3), would be 10 

burden hours and the additional onetime burden related to the 

implementation of a reporting 

mechanism would be 6 burden hours, 

per platform. The Commission 

preliminarily believes that the 

additional ongoing burden related to the 

development of the ability to capture 

the relevant transaction information 

would be 10 burden hours and the 

additional ongoing burden related to the 

maintenance of the reporting 

mechanism would be 2 burden hours, 

per platform. As a result, the 

Commission estimates that the total 

first-year burden would be 28 hours and 

the ongoing annual burden would be 12 

hours. 

As a result of these proposed 

requirements, the Commission 

preliminarily estimates that platforms 

would have a total first-year burden of 

14,490 hours, or 1,449 hours per 

platform.329 In addition, the 


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330The Commission derived its estimate from the 

following: ((654 hours + 60 hours + 12 hours) per 

platform × 10 platforms) = 7,260 hours. 

331The Commission derived its estimate from the 

following: (1,361 hours per registered clearing 

agency × 4 registered clearing agencies) = 5,444 

hours. 

332See supra note 302. 

333The Commission derived its estimate from the 

following: (654 hours per reporting entity × 4 

registered clearing agencies) = 2,616 hours. 

334This figure is based on the sum of perreporting entity estimates for connectivity to SDRs 

for data reporting, as follows: [($100,000 hardwareand software-related expenses, including necessary 

back-up and redundancy, per SDR connection) × (2 

SDR connections per reporting entity)] + [($250/

gigabyte of storage capacity) × (4 gigabytes of 

storage capacity)] = $201,000. 

335The Commission derived its estimate from the 

following: ($201,000 per reporting side × 4 

registered clearing agencies) = $804,000. See also 

Cross-Border Proposing Release, 78 FR 31112–15. 

336The Commission derived its estimate from the 

following: ((1,361 hours + 312.5 hours + 787.5 

hours) per registered clearing agency × 4 registered 

clearing agencies) = 9,844 hours. 

337The Commission derived its estimate from the 

following: ((654 hours + 312.5 hours + 787.5 hours) 

per registered clearing agency × 4 registered 

clearing agencies) = 7,016 hours. 

338See supra note 334. 

339The Commission derived its estimate from the 

following: (1,394 hours per reporting side × 300 

reporting sides) = 418,200 hours. 

340See Cross-Border Proposing Release, 78 FR 

31112–15. 

341The Commission derived its estimate from the 

following: (687 hours per reporting side × 300 

reporting sides) = 206,100 hours. 

342This figure is based on the sum of perreporting side estimates for connectivity to SDRs for 

data reporting, as follows: [($100,000 hardware- and 

software-related expenses, including necessary 

back-up and redundancy, per SDR connection) × (2 

SDR connections per reporting side)] + [($250/

gigabyte of storage capacity) × (4 gigabytes of 

storage capacity)] = $201,000. 

343The Commission derived its estimate from the 

following: ($201,000 per reporting side × 300 

reporting sides) = $60,300,000. See also CrossBorder Proposing Release, 78 FR 31112–15. 

344The Commission derived its estimate from the 

following: ((1,394 hours + 33.33 hours + 28) per 

reporting sides × 300 reporting sides) = 436,599 

hours. 

Commission preliminarily estimates 

that platforms would have an ongoing 

annual burden of 7,260 hours, or 726 

hours per platform.330 The Commission 

also preliminarily estimates that each 

platform would have connectivity costs 

of $201,000 in the first year and each 

year thereafter. 

b. For Registered Clearing Agencies 

The Commission preliminarily 

believes that registered clearing agencies 

would have a first-year burden of 1,361 

hours per registered clearing agency, for 

a total first-year burden of 5,444 hours 

under Rule 901 (before including the 

burdens related to the reporting of 

individual security-based swap 

transactions).331 The Commission also 

preliminarily estimates that Rule 901 

would impose ongoing annualized 

aggregate burdens of approximately 654 

hours 332 per registered clearing agency 

for a total aggregate annualized burden 

of 2,616 hours for all registered clearing 

agencies.333 The Commission further 

preliminarily estimates that the 

proposed Rule 901(a)(2)(i) would 

impose initial and ongoing annualized 

dollar cost burdens of $201,000 per 

registered clearing agency,334 for total 

aggregate initial and ongoing annualized 

dollar cost burdens of $804,000.335

The Commission preliminarily 

estimates that the proposed Rule 

901(a)(2)(i) would result in registered 

clearing agencies having a total burden 

of 1,250 hours attributable to the initial 

reporting of security-based swaps to 

registered SDRs over the course of a 

year, or 312.5 hours per registered 

clearing agency. The Commission 

preliminarily estimates that the 

proposed amendments to Rule 901(a) 

would result in registered clearing 

agencies having a total burden of 3,150 

hours attributable to the reporting of life 

cycle events by registered clearing 

agencies to registered SDRs under Rule 

901(e) over the course of a year, or 787.5 

hours per registered clearing agency. 

The Commission preliminarily believes 

that the proposed amendments would 

result in a total annual burden on 

registered clearing agencies to report 

security-based swaps and life cycle 

events of 4,400 burden hours, or 1,100 

hours per registered clearing agency. 

The Commission preliminarily 

estimates that, as a result of these 

proposed requirements, registered 

clearing agencies would have a total 

first-year burden of 9,844 hours, or 

2,461 hours per registered clearing 

agency.336 In addition, the Commission 

preliminarily estimates that registered 

clearing agencies would have an 

ongoing annual burden of 7,328 hours, 

or 1,754 hours per registered clearing 

agency.337 The Commission also 

preliminarily estimates that each 

registered clearing agency would have 

connectivity costs of $201,000 in the 

first year and each year thereafter.338

c. For Reporting Sides 

The Commission preliminarily 

believes that, as a result of proposed 

Rule 901(a)(3), reporting sides would 

have a first-year burden of 1,394 hours 

per reporting side, for a total first-year 

burden of 418,200 hours.339 The 

Commission also preliminarily 

estimates that proposed Rule 901(a)(3) 

would impose ongoing annualized 

aggregate burdens of approximately 687 

hours 340 per reporting side, for a total 

aggregate annualized burden of 206,100 

hours for all reporting sides.341 The 

Commission further preliminarily 

estimates that the proposed Rule 

901(a)(3) would impose initial and 

ongoing annualized dollar cost burdens 

of $201,000 per registered clearing 

agency,342 for total aggregate initial and 

ongoing annualized dollar cost burdens 

of $60,300,000.343

As discussed above, the Commission 

estimated that Rule 901(a), as previously 

adopted, will result in reporting sides 

having a total burden of 2,500 hours 

attributable to the reporting of securitybased swaps to registered SDRs under 

Rules 901(c) and 901(d) over the course 

of a year, or 8.33 hours per reporting 

side. The Commission further estimated 

that Rule 901(a), as previously adopted, 

would result in reporting sides having a 

total burden of 7,500 hours attributable 

to the reporting of life cycle events to 

registered SDRs under Rule 901(e) over 

the course of a year, or 25 hours per 

reporting side. As a result, the 

Commission stated its belief that the 

total burden associated with the 

reporting of security-based swaps under 

Rules 901(c) and 901(d), along with the 

reporting of life cycle events under Rule 

901(e), would be 10,000 hours, or 33.33 

hours per reporting side. 

The Commission preliminarily 

believes that the additional one-time 

burden related to the development of 

the ability to capture the relevant 

transaction information, required by 

proposed Rule 901(a)(3), would be 10 

burden hours and the additional onetime burden related to the 

implementation of a reporting 

mechanism would be 6 burden hours, 

per reporting side. The Commission 

preliminarily believes that the 

additional ongoing burden related to the 

development of the ability to capture 

the relevant transaction information 

would be 10 burden hours and the 

additional ongoing burden related to the 

maintenance of the reporting 

mechanism would be 2 burden hours, 

per reporting side. As a result, the 

Commission estimates that the total 

first-year burden would be 28 hours and 

the ongoing annual burden would be 12 

hours. 

As a result of these proposed 

requirements, the Commission 

preliminarily estimates that reporting 

sides would have a total first-year 

burden of 436,599 hours, or 1,455.33 

hours per reporting side.344 In addition, 

the Commission preliminarily estimates 

that reporting sides would have an 

ongoing annual burden of 219,699 

hours, or 732.33 hours per reporting 


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345The Commission derived its estimate from the 

following: ((687 hours + 33.33 hours + 12 hours) per 

reporting side × 300 reporting sides) = 219,699 

hours. 

346See Regulation SBSR Adopting Release, 

Section XXI(F). 

347See id. 

348See id. 

349See id. 

350See id. 

351See id. 

352See id. 

353See id. 

side.345 The Commission also 

preliminarily estimates that each 

reporting side would have connectivity 

costs of $201,000 in the first year and 

each year thereafter. 

C. Correction of Errors in Security-Based 

Swap Information—Rule 905 

1. Rule 905—As Adopted 

Rule 905, as adopted, establishes 

procedures for correcting errors in 

reported and disseminated securitybased swap information. Under Rule 

905(a)(1), where a side that was not the 

reporting side for a security-based swap 

transaction discovers an error in the 

information reported with respect to 

such security-based swap, the 

counterparty must promptly notify the 

reporting side of the error. Under Rule 

905(a)(2), as adopted, where a reporting 

side for a security-based swap 

transaction discovers an error in the 

information reported with respect to a 

security-based swap, or receives 

notification from its counterparty of an 

error, the reporting side must promptly 

submit to the entity to which the 

security-based swap was originally 

reported an amended report pertaining 

to the original transaction. The amended 

report must be submitted to the 

registered SDR in a manner consistent 

with the policies and procedures of the 

registered SDR required pursuant to 

Rule 907(a)(3). 

Rule 905(b), as adopted, sets forth the 

duties of a registered SDR relating to 

corrections. If the registered SDR either 

discovers an error in a transaction on its 

system or receives notice of an error 

from a reporting side, Rule 905(b)(1) 

requires the registered SDR to verify the 

accuracy of the terms of the securitybased swap and, following such 

verification, promptly correct the 

erroneous information contained in its 

system. Rule 905(b)(2) further requires 

that, if such erroneous information 

relates to a security-based swap that the 

registered SDR previously disseminated 

and falls into any of the categories of 

information enumerated in Rule 901(c), 

the registered SDR must publicly 

disseminate a corrected transaction 

report of the security-based swap 

promptly following verification of the 

trade by the counterparties to the 

security-based swap, with an indication 

that the report relates to a previously 

disseminated transaction. 

In the Regulation SBSR Adopting 

Release, the Commission stated its belief 

that, with respect to reporting sides, 

Rule 905(a) will impose an initial, onetime burden associated with designing 

and building the reporting side’s 

reporting system to be capable of 

submitting amended security-based 

swap transactions to a registered SDR. 

In the Regulation SBSR Adopting 

Release, for reporting sides, the 

Commission estimated that Rule 905(a) 

will impose an initial (first-year) 

aggregate burden of 15,015 hours, which 

is 50.0 burden hours per reporting 

side,346 and an ongoing aggregate 

annualized burden of 7,035 hours, 

which is 23.5 burden hours per 

reporting side.347

With respect to the actual submission 

of amended transaction reports required 

under Rule 905(a)(2), the Commission 

stated its belief that this will not result 

in a material burden because this will be 

done electronically though the reporting 

system that the reporting side must 

develop and maintain to comply with 

Rule 901. The overall burdens 

associated with such a reporting system 

are addressed in the Commission’s 

analysis of Rule 901. 

With regard to non-reporting-side 

participants, the Commission stated its 

belief that Rule 905(a) will impose an 

initial and ongoing burden associated 

with promptly notifying the relevant 

reporting entity after discovery of an 

error as required under Rule 905(a)(1). 

In the Regulation SBSR Adopting 

Release, the Commission estimated that 

the annual burden will be 998,640 

hours, which corresponds to 208.05 

burden hours per non-reporting-side 

participant.348 This figure was based on 

the Commission’s estimate of (1) 4,800 

non-reporting-side participants; and (2) 

1 transaction per day per non-reportingside participant.349 The burdens of Rule 

905 on reporting sides and nonreporting-side participants will be 

reduced to the extent that complete and 

accurate information is reported to 

registered SDRs in the first instance 

pursuant to Rule 901. 

Rule 905(b) requires a registered SDR 

to develop protocols regarding the 

reporting and correction of erroneous 

information. In the Regulation SBSR 

Adopting Release, however, the 

Commission stated its belief that this 

duty would represent only a minor 

extension of other duties for which the 

Commission is estimating burdens, and 

consequently, will not impose 

substantial additional burdens on a 

registered SDR. The Commission noted 

that a registered SDR will be required to 

have the ability to collect and maintain 

security-based swap transaction reports 

and update relevant records under the 

rules adopted in the SDR Adopting 

Release. Likewise, the Commission 

noted that a registered SDR must have 

the capacity to disseminate additional, 

corrected security-based swap 

transaction reports under Rule 902. The 

Commission concluded that the burdens 

associated with Rule 905—including 

systems development, support, and 

maintenance—are addressed in the 

Commission’s analysis of those other 

rules and, thus, the Commission stated 

its belief that Rule 905(b) will impose 

only an incremental additional burden 

on registered SDRs. In the Regulation 

SBSR Adopting Release, the 

Commission estimated that developing 

and publicly providing the necessary 

procedures will impose on each 

registered SDR an initial one-time 

burden on each registered SDR of 

approximately 730 burden hours.350 The 

Commission further estimated that to 

review and update such procedures on 

an ongoing basis will impose an annual 

burden on each SDR of approximately 

1,460 burden hours.351

Accordingly, in the Regulation SBSR 

Adopting Release, the Commission 

estimated that the initial (first-year) 

aggregate annualized burden on 

registered SDRs under Rule 905 will be 

21,900 burden hours, which 

corresponds to 2,190 burden hours for 

each registered SDR.352 The 

Commission further estimated that the 

ongoing aggregate annualized burden on 

registered SDRs under Rule 905 will be 

14,600 burden hours, which 

corresponds to 1,460 burden hours for 

each registered SDR.353

2. Rule 905—Proposed Amendments 

Rule 905, as adopted, establishes a 

mechanism for reporting corrections of 

previously submitted security-based 

swap transaction information and 

assigns certain duties to the 

counterparties to a transaction and to 

the registered SDR that holds the 

transaction. In light of the Commission’s 

proposed amendment to Rule 901(a) to 

require a platform to report a securitybased swap that is executed on the 

platform and that will be submitted to 

clearing, the Commission is proposing 

to make conforming changes to Rule 

905(a) to require the person having the 

duty to report the initial transaction to 

correct previously reported erroneous 


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354See id. 

355See id. 

356See id. 

357See Regulation SBSR Proposing Release, 75 FR 

75254–55. This figure is calculated as follows: 

[(((172 burden hours for one-time development of 

reporting system) × (0.05)) + ((33 burden hours 

annual maintenance of reporting system) × (0.05)) 

+ ((180 burden hours one-time compliance program 

development) × (0.1)) + ((218 burden hours annual 

support of compliance program) × (0.1))) × (10 

platforms)] = 500.5 burden hours, which is 50 

burden hours per reporting side. See also 

Regulation SBSR Adopting Release, Section XXI(F). 

358See Regulation SBSR Proposing Release, 75 FR 

75254–55. This figure is calculated as follows: [(((33 

burden hours annual maintenance of reporting 

system) × (0.05)) + ((218 burden hours annual 

support of compliance program) × (0.1))) × (10 

platforms)] = 234.5 burden hours, which is 23.5 

burden hours per platform. 

information if it discovers an error. 

Thus, under the proposed amendments 

to Rule 905(a), the person having the 

duty to report a security-based swap, 

whether a counterparty or a platform, 

would be required to correct previously 

reported erroneous information with 

respect to that security-based swap if it 

discovers an error. 

Certain provisions of Rule 905 of 

Regulation SBSR contain ‘‘collection of 

information requirements’’ within the 

meaning of the PRA. The title of this 

collection is ‘‘Rule 905—Correction of 

Errors in Security-Based Swap 

Information.’’ 

a. Summary of Collection of Information 

Rule 905 establishes duties for 

security-based swap counterparties and 

registered SDRs to correct errors in 

information that previously has been 

reported. 

Duty to correct. Under the proposed 

amendment to Rule 905(a)(1), where a 

person that was not the reporting side 

for a security-based swap transaction 

discovers an error in the information 

reported with respect to such securitybased swap, that person must promptly 

notify the person having the duty to 

report the security-based swap of the 

error. Under the proposed amendment 

to Rule 905(a)(2), where a person having 

the duty to report a security-based swap 

transaction discovers an error in the 

information reported with respect to a 

security-based swap, or receives 

notification from a counterparty of an 

error, such person must promptly 

submit to the entity to which the 

security-based swap was originally 

reported an amended report pertaining 

to the original transaction. The amended 

report must be submitted to the 

registered SDR in a manner consistent 

with the policies and procedures of the 

registered SDR required pursuant to 

Rule 907(a)(3), as adopted. As a result 

the proposed amendments to Rule 905, 

a platform would have the duty to 

report if it discovers an error. 

b. Proposed Use of Information 

The security-based swap transaction 

information required to be reported 

under the proposed amendments to 

Rule 905 would be used by registered 

SDRs, its participants, the Commission, 

and other relevant authorities. 

Participants will be able to use such 

information to evaluate and manage 

their own risk positions and satisfy their 

duties to report corrected information to 

a registered SDR. A registered SDR will 

need the required information to correct 

security-based swap transaction records, 

in order to maintain an accurate record 

of a participant’s positions as well as to 

disseminate corrected information. The 

Commission and other relevant 

authorities will need the corrected 

information to have an accurate 

understanding of the market for 

surveillance and oversight purposes. 

c. Respondents 

Rule 905, as proposed to be amended, 

would apply to platforms. As noted 

above, the Commission estimates that 

there will be approximately 10 

platforms that incur a duty to report 

security-based swap transactions 

pursuant to Rule 901. 

d. Total Initial and Annual Reporting 

and Recordkeeping Burdens 

In the Regulation SBSR Adopting 

Release, the Commission estimated that 

Rule 905(a), as adopted, will impose an 

initial, one-time burden associated with 

designing and building the reporting 

side’s reporting system to be capable of 

submitting amended security-based 

swap transactions to a registered 

SDR.354 The Commission stated its 

belief that designing and building 

appropriate reporting system 

functionality to comply with Rule 

905(a)(2), as adopted, will be a 

component of, and represent an 

incremental ‘‘add-on’’ to, the cost to 

build a reporting system and develop a 

compliance function as required under 

Rule 901, as adopted.355 Specifically, 

the Commission estimated that, based 

on discussions with industry 

participants, the incremental burden 

would be equal to 5% of the one-time 

and annual burdens associated with 

designing and building a reporting 

system that is in compliance with Rule 

901, plus 10% of the corresponding onetime and annual burdens associated 

with developing the reporting side’s 

overall compliance program required 

under Rule 901.356

The Commission preliminarily 

believes that the above methodology is 

applicable to error reporting by 

platforms under the proposed 

amendments to Rule 905(a). Thus, for 

platforms, the Commission estimates 

that the proposed amendments to Rule 

905(a) would impose an initial (firstyear) aggregate burden of 500.5 hours, 

which is 50.0 burden hours per 

platform,357 and an ongoing aggregate 

annualized burden of 234.5 hours, 

which is 23.5 burden hours per 

platform.358

e. Recordkeeping Requirements 

Security-based swap transaction 

reports received pursuant to Rule 905 

are subject to Rule 13n–5(b)(4) under 

the Exchange Act. This rule requires an 

SDR to maintain the transaction data 

and related identifying information for 

not less than five years after the 

applicable security-based swap expires 

and historical positions for not less than 

five years. 

With respect to corrected information 

that is disseminated by a registered SDR 

in compliance with Rule 905(b)(2), Rule 

13n–7(b) under the Exchange Act 

requires an SDR to keep and preserve at 

least one copy of all documents, 

including all policies and procedures 

required by the Exchange Act and the 

rules or regulations thereunder, for a 

period of not less than five years, the 

first two years in a place that is 

immediately available. This requirement 

encompasses amended security-based 

swap transaction reports disseminated 

by the registered SDR. The amendments 

to Rule 905(a) clarify the duties of 

counterparties and other persons to 

report corrected information to a 

registered SDR. The requirement that a 

registered SDR disseminate corrected 

information would not change. The 

Commission preliminarily believes that 

the number of corrections reported to 

the registered SDR would not be 

impacted by the proposed amendments. 

As a result, the Commission 

preliminarily believes that the burdens 

under Rule 905(b)(2) would not be 

impacted by the proposed amendments 

to Rule 905(a). 

f. Collection of Information Is 

Mandatory 

Each collection of information 

discussed above is mandatory. 

g. Confidentiality of Responses to 

Collection of Information 

Information collected pursuant to the 

proposed amendments to Rule 905 

would be widely available to the extent 

that it corrects information previously 

reported pursuant to Rule 901(c) and 

incorporated into security-based swap 


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359This figure is calculated as follows: [(((172 

burden hours for one-time development of reporting 

system) × (0.05)) + ((33 burden hours annual 

maintenance of reporting system) × (0.05)) + ((180 

burden hours one-time compliance program 

development) × (0.1)) + ((218 burden hours annual 

support of compliance program) × (0.1))) × (10 

platforms)] = 500.5 burden hours, which is 50 

burden hours per reporting side. 

360This figure is calculated as follows: [(((33 

burden hours annual maintenance of reporting 

system) × (0.05)) + ((218 burden hours annual 

support of compliance program) × (0.1))) × (10 

platforms)] = 234.5 burden hours, which is 23.5 

burden hours per platform. 

361This figure is calculated as follows: [(((172 

burden hours for one-time development of reporting 

system) × (0.05)) + ((33 burden hours annual 

maintenance of reporting system) × (0.05)) + ((180 

burden hours one-time compliance program 

development) × (0.1)) + ((218 burden hours annual 

support of compliance program) × (0.1))) × (300 

reporting sides)] = 15,015 burden hours, which is 

50 burden hours per reporting side. The burden 

hours for annual maintenance of the reporting 

system has been updated to reflect new information 

on the number of reportable events. 

362This figure is calculated as follows: [(((33 

burden hours annual maintenance of reporting 

system) × (0.05)) + ((218 burden hours annual 

support of compliance program) × (0.1))) × (300 

reporting sides)] = 7,035 burden hours, which is 

23.5 burden hours per reporting side. The burden 

hours for annual maintenance of the reporting 

system has been updated to reflect new information 

on the number of reportable events. 

363This figure is based on the following: [(1.14 

error notifications per non-reporting-side 

participant per day) × (365 days/year) × 

(Compliance Clerk at 0.5 hours/report) × (4,800 

non-reporting-side participants)] = 998,640 burden 

hours, which corresponds to 208.05 burden hours 

per non-reporting-side participant. 

364This figure is based on the following: [(730 

burden hours to develop protocols) + (1,460 burden 

hours annual support)) × (10 registered SDRs)] = 

21,900 burden hours, which corresponds to 2,190 

burden hours per registered SDR. 

365This figure is based on the following: [(1,460 

burden hours annual support) × (10 registered 

SDRs)] = 14,600 burden hours, which corresponds 

to 1,460 burden hours per registered SDR. 

366See Regulation SBSR Adopting Release, 

Section XXI(G). 

367See id. 

368See id. 

transaction reports that are publicly 

disseminated by a registered SDR 

pursuant to Rule 902. Most of the 

information required under Rule 902 

will be widely available to the public to 

the extent it is incorporated into 

security-based swap transaction reports 

that are publicly disseminated by a 

registered SDR pursuant to Rule 902. 

However, Rule 902(c) prohibits public 

dissemination of certain kinds of 

transactions and certain kinds of 

transaction information. An SDR, 

pursuant to Sections 13(n)(5) of the 

Exchange Act and Rules 13n–4(b)(8) and 

Rule 13n–9 thereunder, is required to 

maintain the privacy of this securitybased swap information. To the extent 

that the Commission receives 

confidential information pursuant to 

this collection of information, such 

information will be kept confidential, 

subject to the provisions of applicable 

law. 

3. Rule 905—Aggregate Total PRA 

Burdens and Costs 

The Commission estimates the 

following aggregate total PRA burdens 

and costs, by category of entity, 

resulting from the proposed 

amendments to Rule 905. 

a. For Platforms 

For platforms, the Commission 

estimates that the proposed 

amendments to Rule 905(a) would 

impose an initial (first-year) aggregate 

burden of 500.5 hours, which is 50.0 

burden hours per platform,359 and an 

ongoing aggregate annualized burden of 

234.5 hours, which is 23.5 burden hours 

per platform.360

For reporting sides, the Commission 

estimates that Rule 905(a), as adopted, 

will impose an initial (first-year) 

aggregate burden of 15,015 hours, which 

is 50.0 burden hours per reporting 

side,361 and an ongoing aggregate 

annualized burden of 7,035 hours, 

which is 23.5 burden hours per 

reporting side.362

b. For Non-Reporting Sides 

For non-reporting sides, the 

Commission estimates that the annual 

burden will be 998,640 hours, which 

corresponds to 208.05 burden hours per 

non-reporting-side participant.363

c. For Registered SDRs 

For registered SDRs, the Commission 

estimates that the initial (first-year) 

aggregate annualized burden on 

registered SDRs under Rule 905, as 

adopted and as proposed to be amended 

herein, would be 21,900 burden hours, 

which corresponds to 2,190 burden 

hours for each registered SDR.364 The 

Commission further estimates that the 

ongoing aggregate annualized burden on 

registered SDRs under Rule 905, as 

adopted and as proposed to be amended 

herein, would be 14,600 burden hours, 

which corresponds to 1,460 burden 

hours for each registered SDR.365

D. Other Duties of Participants—Rule 

906 

1. Rule 906—As Adopted 

Rule 906(a), as adopted, sets forth a 

procedure designed to ensure that a 

registered SDR obtains relevant UICs for 

both sides of a security-based swap, not 

just of the reporting side. Rule 906(a) 

requires a registered SDR to identify any 

security-based swap reported to it for 

which the registered SDR does not have 

a counterparty ID and (if applicable) 

broker ID, trading desk ID, and trader ID 

of each counterparty. Rule 906(a) further 

requires the registered SDR, once a day, 

to send a report to each participant 

identifying, for each security-based 

swap to which that participant is a 

counterparty, the security-based swap(s) 

for which the registered SDR lacks 

counterparty ID and (if applicable) 

broker ID, trading desk ID, and trader 

ID. A participant that receives such a 

report must provide the missing ID 

information to the registered SDR 

within 24 hours. 

Rule 906(b) requires each participant 

of a registered SDR to provide the 

registered SDR with information 

sufficient to identify the participant’s 

ultimate parent(s) and any affiliate(s) of 

the participant that are also participants 

of the registered SDR. 

Rule 906(c) requires each participant 

that is a registered security-based swap 

dealer or registered major security-based 

swap participant to establish, maintain, 

and enforce written policies and 

procedures that are reasonably designed 

to ensure compliance with any securitybased swap transaction reporting 

obligations in a manner consistent with 

Regulation SBSR. In addition, Rule 

906(c) requires each such participant to 

review and update its policies and 

procedures at least annually. 

For Registered SDRs. Rule 906(a) 

requires a registered SDR, once a day, to 

send a report to each of its participants 

identifying, for each security-based 

swap to which that participant is a 

counterparty, any security-based 

swap(s) for which the registered SDR 

lacks counterparty ID and (if applicable) 

broker ID, trading desk ID, and trader 

ID. In the Regulation SBSR Adopting 

Release, the Commission estimated that 

there will be a one-time, initial burden 

of 112 burden hours for a registered SDR 

to create a report template and develop 

the necessary systems and processes to 

produce a daily report required by Rule 

906(a).366 Further, the Commission 

estimated that there will be an ongoing 

annualized burden of 308 burden hours 

for a registered SDR to generate and 

issue the daily reports, and to enter into 

its systems the ID information supplied 

by participants in response to the daily 

reports.367

Accordingly, in the Regulation SBSR 

Adopting Release, the Commission 

estimated that the initial aggregate 

annualized burden for registered SDRs 

under Rule 906(a) will be 4,200 burden 

hours for all SDR respondents, which 

corresponds to 420 burden hours per 

registered SDR.368 The Commission 

estimated that the ongoing aggregate 

annualized burden for registered SDRs 


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369See id. 

370See id. 

371See id. 

372See id. The Commission estimates that, during 

the first year, each participant will submit an initial 

report and one update report and, in subsequent 

years, will submit two update reports. 

373See id. 

374See id. 

375See id. 

376See id. 

377See id. 

378See id. 

379See id. 

380See id. 

under Rule 906(a) will be 3,080 burden 

hours, which corresponds to 308 burden 

hours per registered SDR.369

For Participants. Rule 906(a) requires 

any participant of a registered SDR that 

receives a report from that registered 

SDR to provide the missing UICs to the 

registered SDR within 24 hours. Because 

all SDR participants will likely be the 

non-reporting side for at least some 

transactions to which they are 

counterparties, in the Regulation SBSR 

Adopting Release, the Commission 

stated its belief that all participants will 

be impacted by Rule 906(a). In the 

Regulation SBSR Adopting Release, the 

Commission estimated that the initial 

and ongoing annualized burden under 

Rule 906(a) for all participants will be 

199,728 burden hours, which 

corresponds to 41.6 burden hours per 

participant.370 This figure is based on 

the Commission’s estimates of (1) 4,800 

participants; and (2) approximately 1.14 

transactions per day per participant.371

Rule 906(b) requires every participant 

to provide the registered SDR an initial 

parent/affiliate report and subsequent 

reports, as needed. In the Regulation 

SBSR Adopting Release, the 

Commission estimated that there will be 

4,800 participants, that each participant 

will connect to two registered SDRs on 

average, and that each participant will 

submit two reports each year.372

Accordingly, the Commission estimated 

that the initial and ongoing aggregate 

annualized burden associated with Rule 

906(b) will be 9,600 burden hours, 

which corresponds to 2 burden hours 

per participant.373 The aggregate burden 

represents an upper estimate for all 

participants; the actual burden will 

likely decrease because certain larger 

participants are likely to have multiple 

affiliates, and one member of the group 

could report ultimate parent and 

affiliate information on behalf of all of 

its affiliates at the same time. 

Rule 906(c) requires each participant 

that is a registered security-based swap 

dealer or registered major security-based 

swap participant (each, a ‘‘covered 

participant’’) to establish, maintain, and 

enforce written policies and procedures 

that are reasonably designed to ensure 

compliance with applicable securitybased swap transaction reporting 

obligations. Rule 906(c) also requires the 

review and updating of such policies 

and procedures at least annually. In the 

Regulation SBSR Adopting Release, the 

Commission estimated that the onetime, initial burden for each covered 

participant to adopt written policies and 

procedures as required under Rule 

906(c) will be approximately 216 

burden hours.374 As discussed in the 

Regulation SBSR Adopting Release,375

this figure is based on the estimated 

number of hours to develop a set of 

written policies and procedures, 

program systems, implement internal 

controls and oversight, train relevant 

employees, and perform necessary 

testing. In addition, in the Regulation 

SBSR Adopting Release, the 

Commission estimated the burden of 

maintaining such policies and 

procedures, including a full review at 

least annually, as required by Rule 

906(c), will be approximately 120 

burden hours for each covered 

participant.376 This figure includes an 

estimate of hours related to reviewing 

existing policies and procedures, 

making necessary updates, conducting 

ongoing training, maintaining internal 

controls systems, and performing 

necessary testing. Accordingly, the 

Commission estimated that the initial 

aggregate annualized burden associated 

with Rule 906(c) will be 18,480 burden 

hours, which corresponds to 336 burden 

hours per covered participant.377 In the 

Regulation SBSR Adopting Release, the 

Commission estimated that the ongoing 

aggregate annualized burden associated 

with Rule 906(c) will be 6,600 burden 

hours, which corresponds to 120 burden 

hours per covered participant.378

Therefore, in the Regulation SBSR 

Adopting Release, the Commission 

estimated that the total initial aggregate 

annualized burden associated with Rule 

906 will be 230,370 burden hours,379

and the total ongoing aggregate 

annualized burden will be 217,370 

burden hours for all participants.380

2. Rule 906—Proposed Amendments 

a. Rule 906(b)—Proposed Amendments 

The Commission is proposing to 

revise Rule 906(b) to indicate that 

reporting obligations under Rule 906(b) 

would not attach to participants that are 

platforms or registered clearing 

agencies. Under the proposed 

amendments to Rule 901(a) and 901(e), 

platforms and registered clearing 

agencies would have the duty to report 

certain security-based swaps and 

therefore would become participants of 

registered SDRs. Rule 906(b), as 

adopted, requires each participant of a 

registered SDR to provide the registered 

SDR information sufficient to identify 

its ultimate parent(s) and any affiliate(s) 

of the participant that also are 

participants of the registered SDR, using 

ultimate parent IDs and participant IDs. 

The Commission does not believe that 

this change, which would relieve 

platforms and registered clearing 

agencies of the requirement to provide 

ultimate parent IDs and participant IDs, 

would affect the existing burdens being 

placed on platforms and registered 

clearing agencies. 

b. Rule 906(c)—Proposed Amendments 

i. Summary of Collection of Information 

The proposed amendments to Rule 

906(c) would require each participant 

that is a registered clearing agency or 

platform to establish, maintain, and 

enforce written policies and procedures 

that are reasonably designed to ensure 

compliance with applicable securitybased swap transaction reporting 

obligations. Each such participant also 

would be required to review and update 

its policies and procedures at least 

annually. 

ii. Proposed Use of Information 

The policies and procedures required 

under the proposed amendments to 

Rule 906(c) would be used by 

participants to aid in their compliance 

with Regulation SBSR, and also used by 

the Commission as part of its ongoing 

efforts to monitor and enforce 

compliance with the federal securities 

laws, including Regulation SBSR, 

through, among other things, 

examinations and inspections. 

iii. Respondents 

The proposed amendments to Rule 

906(c) would result in the rule applying 

to registered clearing agencies and 

platforms. The Commission estimates 

that there will be 4 registered clearing 

agencies and 10 platforms. 

iv. Total Initial and Annual Reporting 

and Recordkeeping Burdens 

For Registered Clearing Agencies and 

Platforms. The proposed amendment to 

Rule 906(c) would require each 

registered clearing agency or platform to 

establish, maintain, and enforce written 

policies and procedures that are 

reasonably designed to ensure 

compliance with applicable securitybased swap transaction reporting 

obligations. The proposed amendment 

to Rule 906(c) also would require each 

registered clearing agency and platform 

to review and update such policies and 


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381See Regulation SBSR Proposing Release, 75 FR 

75257. This figure is based on the following: [(Sr. 

Programmer at 40 hours) + (Compliance Manager at 

40 hours) + (Compliance Attorney at 40 hours) + 

(Compliance Clerk at 40 hours) + (Sr. Systems 

Analyst at 32 hours) + (Director of Compliance at 

24 hours)] = 216 burden hours per registered 

clearing agency or platform. 

382See Regulation SBSR Proposing Release, 75 FR 

75257. 

383See id. This figure is based on the following: 

[(Sr. Programmer at 8 hours) + (Compliance 

Manager at 24 hours) + (Compliance Attorney at 24 

hours) + (Compliance Clerk at 24 hours) + (Sr. 

Systems Analyst at 16 hours) + (Director of 

Compliance at 24 hours)] = 120 burden hours per 

registered clearing agency or platform. 

384This figure is based on the following: [(216 + 

120 burden hours) × (14 registered clearing agencies 

and platforms)] = 4,704 burden hours. 

385This figure is based on the following: [(120 

burden hours) × (14 registered clearing agencies and 

platforms)] = 1,680 burden hours. 

386See Clearing Agency Standards Adopting 

Release. 

387See Securities Exchange Act Release No. 

63825 (February 2, 2011), 76 FR 10948 (February 

29, 2011) (‘‘SB SEF Proposing Release’’). 

388This figure is based on the following: [(Sr. 

Programmer at 40 hours) + (Compliance Manager at 

40 hours) + (Compliance Attorney at 40 hours) + 

(Compliance Clerk at 40 hours) + (Sr. Systems 

Analyst at 32 hours) + (Director of Compliance at 

24 hours)] = 216 burden hours per registered 

clearing agency or platform. 

389This figure is based on the following: [(Sr. 

Programmer at 8 hours) + (Compliance Manager at 

24 hours) + (Compliance Attorney at 24 hours) + 

(Compliance Clerk at 24 hours) + (Sr. Systems 

Analyst at 16 hours) + (Director of Compliance at 

24 hours)] = 120 burden hours per registered 

clearing agency or platform. 

390This figure is based on the following: [(216 + 

120 burden hours) × (14 registered clearing agencies 

and platforms)] = 4,704 burden hours. 

391This figure is based on the following: [(120 

burden hours) × (14 registered clearing agencies and 

platforms)] = 1,680 burden hours. 

392See Regulation SBSR Adopting Release, 

Section XXI(G). This burden was calculated using 

the same methodology as was used in the 

Regulation SBSR Proposing Release, updated to 

account for new estimates of the number of missing 

information reports resulting from updates in the 

number of reportable events. See Regulation SBSR 

Proposing Release, 75 FR 75256–57. This figure is 

based on the following: [(1.14 missing information 

reports per participant per day) × (365 days/year) 

× (Compliance Clerk at 0.1 hours/report) × (4,800 

participants) = 199,728 burden hours, which 

corresponds to 47.5 burden hours per participant. 

393This figure is based on the following: 

[((2,000,000 estimated annual security-based swap 

transactions)/4,800 participants))/(365 days/year)] = 

1.14, or approximately 1 transaction per day. 

procedures at least annually. The 

Commission estimates that the one-time, 

initial burden for each registered 

clearing agency or platform to adopt 

written policies and procedures as 

required under the proposed 

amendments to Rule 906(c) would be 

similar to the Rule 906(c) burdens 

discussed in the Regulation SBSR 

Adopting Release for covered 

participants, and would be 

approximately 216 burden hours per 

registered clearing agency or 

platform.381 As discussed in the 

Regulation SBSR Proposing Release,382

this figure is based on the estimated 

number of hours to develop a set of 

written policies and procedures, 

program systems, implement internal 

controls and oversight, train relevant 

employees, and perform necessary 

testing. In addition, the Commission 

estimates the burden of maintaining 

such policies and procedures, including 

a full review at least annually will be 

approximately 120 burden hours for 

each registered clearing agency or 

platform.383 This figure includes an 

estimate of hours related to reviewing 

existing policies and procedures, 

making necessary updates, conducting 

ongoing training, maintaining internal 

controls systems, and performing 

necessary testing. Accordingly, the 

Commission estimates that the initial 

aggregate annualized burden associated 

with the proposed amendments to Rule 

906(c) would be 4,704 burden hours, 

which corresponds to 336 burden hours 

per registered clearing agency or 

platform.384 The Commission estimates 

that the ongoing aggregate annualized 

burden associated with the proposed 

amendments to Rule 906(c) will be 

1,680 burden hours, which corresponds 

to 120 burden hours per registered 

clearing agency or platform.385

v. Recordkeeping Requirements 

The Commission has adopted 

recordkeeping rules for registered 

clearing agencies 386 and proposed 

recordkeeping rules for platforms.387

vi. Collection of Information Is 

Mandatory 

Each collection of information 

discussed above is mandatory. 

vii. Confidentiality of Responses to 

Collection of Information 

The collection of information required 

by the proposed amendments to Rule 

906 would not be widely available. To 

the extent that the Commission receives 

confidential information pursuant this 

collection of information, such 

information will be kept confidential, 

subject to applicable law. 

3. Rule 906—Aggregate Total PRA 

Burdens and Costs 

Based on the foregoing, the 

Commission estimates the following 

aggregate total PRA burdens and costs, 

by category of entity, resulting from 

Rule 906, as adopted and as proposed to 

be amended herein. 

a. For Platforms and Registered Clearing 

Agencies 

The Commission estimates that the 

one-time, initial burden for each 

registered clearing agency or platform to 

adopt written policies and procedures 

as required under Rule 906(c), as 

adopted and as proposed to be amended 

herein, would be similar to the Rule 

906(c) burdens discussed in the 

Regulation SBSR Adopting Release for 

covered participants, and would be 

approximately 216 burden hours per 

registered clearing agency or 

platform.388 This figure is based on the 

estimated number of hours to develop a 

set of written policies and procedures, 

program systems, implement internal 

controls and oversight, train relevant 

employees, and perform necessary 

testing. In addition, the Commission 

estimates the burden of maintaining 

such policies and procedures, including 

a full review at least annually, as 

required by Rule 906(c), would be 

approximately 120 burden hours for 

each registered clearing agency or 

platform.389 This figure includes an 

estimate of hours related to reviewing 

existing policies and procedures, 

making necessary updates, conducting 

ongoing training, maintaining internal 

controls systems, and performing 

necessary testing. Accordingly, the 

Commission estimates that the initial 

aggregate annualized burden associated 

with Rule 906(c), as adopted and as 

proposed to be amended herein, would 

be 4,704 burden hours, which 

corresponds to 336 burden hours per 

registered clearing agency or 

platform.390 The Commission estimates 

that the ongoing aggregate annualized 

burden associated with Rule 906(c), as 

adopted and as proposed to be amended 

herein, would be 1,680 burden hours, 

which corresponds to 120 burden hours 

per registered clearing agency or 

platform.391

b. For Registered SDRs 

The proposed amendments to 

Regulation SBSR discussed in this 

release would not modify any 

requirements in Rule 906(a), as adopted. 

Therefore, the Commission is not 

modifying its analysis of the burden that 

Rule 906(a), as adopted, will impose on 

registered SDRs. 

c. For Participants 

The Commission estimates that the 

initial and ongoing annualized burden 

under Rule 906(a) for all participants 

will be 199,728 burden hours, which 

corresponds to 41.6 burden hours per 

participant.392 This figure is based on 

the Commission’s estimates of (1) 4,800 

participants; and (2) approximately 1.14 

transactions per day per participant.393


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394See Regulation SBSR Adopting Release, 

Section XXI(G). See also Regulation SBSR 

Proposing Release, 75 FR 75257. This figure is 

based on the following: [(Compliance Clerk at 0.5 

hours per report) × (2 reports/year/SDR connection) 

× (2 SDR connections/participant) × (4,800 

participants)] = 9,600 burden hours, which 

corresponds to 2 burden hours per participant. 

395See Regulation SBSR Adopting Release, 

Section XXI(G). See also Regulation SBSR 

Proposing Release, 75 FR 75257. This figure is 

based on the following: [(Sr. Programmer at 40 

hours) + (Compliance Manager at 40 hours) + 

(Compliance Attorney at 40 hours) + (Compliance 

Clerk at 40 hours) + (Sr. Systems Analyst at 32 

hours) + (Director of Compliance at 24 hours)] = 216 

burden hours per covered participant. 

396See Regulation SBSR Adopting Release, 

Section XXI(G). See also Regulation SBSR 

Proposing Release, 75 FR 75257. This figure is 

based on the following: [(Sr. Programmer at 8 hours) 

+ (Compliance Manager at 24 hours) + (Compliance 

Attorney at 24 hours) + (Compliance Clerk at 24 

hours) + (Sr. Systems Analyst at 16 hours) + 

(Director of Compliance at 24 hours)] = 120 burden 

hours per covered participant. 

397See Regulation SBSR Adopting Release, 

Section XXI(G). This figure is based on the 

following: [(216 + 120 burden hours) × (55 covered 

participants)] = 18,480 burden hours. 

398See Regulation SBSR Adopting Release, 

Section XXI(G). This figure is based on the 

following: [(120 burden hours) × (55 covered 

participants)] = 6,600 burden hours. 

399See Regulation SBSR Adopting Release, 

Section XXI(G). This figure is based on the 

following: [(4,200 burden hours for registered SDRs 

under Rule 906(a)) + (199,728 burden hours for 

participants under Rule 906(a)) + (9,600 burden 

hours for participants under Rule 906(b)) + (18,480 

burden hours for covered participants under Rule 

906(c))] = 232,008 burden hours. 

400See Regulation SBSR Adopting Release, 

Section XXI(G). This figure is based on the 

following: [(3,080 burden hours for registered SDRs 

under the proposed amendment to Rule 906(a)) + 

(199,728 burden hours for participants under the 

proposed amendment to Rule 906(a)) + (9,600 

burden hours for participants under the proposed 

amendment to Rule 906(b)) + (6,600 burden hours 

for covered participants under the proposed 

amendment to Rule 906(c))] = 219,008 burden 

hours. 

401See Regulation SBSR Adopting Release, 

Section XXI(H). These burdens are the result of 

Rule 907 only and do not account for any burdens 

that result from the SDR Rules. Such burdens are 

addressed in a separate release. See SDR Adopting 

Release, Section VIII(D). 

402See supra note 382. 

403See Regulation SBSR Adopting Release, 

Section XXI(H). This figure also includes time 

necessary to design and program systems and 

implement policies and procedures to assign certain 

UICs, as required by Rule 907(a)(5). 

404See Regulation SBSR Adopting Release, 

Section XXI(H). 

405This figure is based on the following: [((15,000 

burden hours per registered SDR) + (30,000 burden 

hours per registered SDR)) × (10 registered SDRs)] 

= 450,000 initial annualized aggregate burden hours 

during the first year. 

406See Regulation SBSR Adopting Release, 

Section XXI(H). 

The Commission estimates that the 

initial and ongoing aggregate annualized 

burden associated with Rule 906(b), as 

adopted and as proposed to be amended 

herein, would be 9,600 burden hours, 

which corresponds to 2 burden hours 

per participant.394

The Commission estimates that the 

one-time, initial burden for each 

covered participant to adopt written 

policies and procedures as required 

under Rule 906(c), as adopted and as 

proposed to be amended herein, would 

be approximately 216 burden hours.395

This figure is based on the estimated 

number of hours to develop a set of 

written policies and procedures, 

program systems, implement internal 

controls and oversight, train relevant 

employees, and perform necessary 

testing. In addition, the Commission 

estimates the burden of maintaining 

such policies and procedures, including 

a full review at least annually, as 

required by Rule 906(c), as adopted and 

as proposed to be amended herein, 

would be approximately 120 burden 

hours for each covered participant.396

This figure includes an estimate of 

hours related to reviewing existing 

policies and procedures, making 

necessary updates, conducting ongoing 

training, maintaining internal controls 

systems, and performing necessary 

testing. Accordingly, the Commission 

estimates that the initial aggregate 

annualized burden associated with Rule 

906(c), as adopted and as proposed to be 

amended herein, would be 18,480 

burden hours, which corresponds to 336 

burden hours per covered 

participant.397 The Commission 

estimates that the ongoing aggregate 

annualized burden associated with Rule 

906(c), as adopted and as proposed to be 

amended herein, would be 6,600 burden 

hours, which corresponds to 120 burden 

hours per covered participant.398

Therefore, the Commission estimates 

that the total initial aggregate 

annualized burden associated with Rule 

906, as adopted and as proposed to be 

amended herein, would be 232,008 

burden hours,399 and the total ongoing 

aggregate annualized burden would be 

219,008 burden hours for all 

participants.400

E. Policies and Procedures of Registered 

SDRs—Rule 907 

1.Rule 907—As Adopted 

Rule 907(a), as adopted, requires a 

registered SDR to establish and maintain 

written policies and procedures that 

detail how it will receive and publicly 

disseminate security-based swap 

transaction information. Rule 907(a)(4) 

requires policies and procedures for 

assigning ‘‘special circumstances’’ flags 

to the necessary transaction reports. 

Rule 907(c), as adopted, requires a 

registered SDR to make its policies and 

procedures available on its Web site. 

Rule 907(d), as adopted, requires a 

registered SDR to review, and update as 

necessary, the policies and procedures 

that it is required to have by Regulation 

SBSR at least annually. Rule 907(e), as 

adopted, requires a registered SDR to 

have the capacity to provide to the 

Commission, upon request, information 

or reports related to the timeliness, 

accuracy, and completeness of data 

reported to it pursuant to Regulation 

SBSR and the registered SDR’s policies 

and procedures established thereunder. 

In the Regulation SBSR Adopting 

Release, the Commission estimated that 

the one-time, initial burden for a 

registered SDR to adopt written policies 

and procedures as required under Rule 

907 will be approximately 15,000 

hours.401 In the Regulation SBSR 

Adopting Release, the Commission 

stated that, drawing on the 

Commission’s experience with other 

rules that require entities to establish 

and maintain policies and 

procedures,402 this figure is based on 

the estimated number of hours to 

develop a set of written policies and 

procedures, program systems, 

implement internal controls and 

oversight, train relevant employees, and 

perform necessary testing.403 In 

addition, in the Regulation SBSR 

Adopting Release, the Commission 

estimated the annual burden of 

maintaining such policies and 

procedures, including a full review at 

least annually, making available its 

policies and procedures on the 

registered SDR’s Web site, and 

information or reports on noncompliance, as required under Rule 

907(e), will be approximately 30,000 

hours for each registered SDR.404 As 

discussed in the Regulation SBSR 

Proposing Release, this figure includes 

an estimate of hours related to 

reviewing existing policies and 

procedures, making necessary updates, 

conducting ongoing training, 

maintaining relevant systems and 

internal controls systems, performing 

necessary testing, monitoring 

participants, and compiling data. 

In the Regulation SBSR Adopting 

Release, the Commission estimated that 

the initial annualized burden associated 

with Rule 907 will be approximately 

45,000 hours per registered SDR, which 

corresponds to an initial annualized 

aggregate burden of approximately 

450,000 hours.405 The Commission 

further estimated that the ongoing 

annualized burden associated with Rule 

907 will be approximately 30,000 hours 

per registered SDR,406 which 

corresponds to an ongoing annualized 


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407See id. 

408This figure is based on the following: [((15,000 

burden hours per registered SDR) + (30,000 burden 

hours per registered SDR)) × (10 registered SDRs)] 

= 450,000 initial annualized aggregate burden hours 

during the first year. 

409See Regulation SBSR Proposing Release, 75 FR 

75259. This figure is based on the following: [(Sr. 

Programmer at 3,333 hours) + (Compliance Manager 

at 6,667 hours) + (Compliance Attorney at 10,000 

hours) + (Compliance Clerk at 5,000 hours) + (Sr. 

System Analyst at 3,333 hours) + (Director of 

Compliance at 1,667 hours)] = 30,000 burden hours 

per registered SDR. 

410See Regulation SBSR Proposing Release, 75 FR 

75259. This figure is based on the following: 

[(30,000 burden hours per registered SDR) × (10 

registered SDRs)] = 300,000 ongoing, annualized 

aggregate burden hours. 

411The Commission staff estimates that the 

paperwork burden associated with making a 

substituted compliance request pursuant to Rule 

908(c)(2)(ii) will be approximately 80 of in-house 

counsel time, plus $80,000 for the services of 

outside professionals (based on 200 hours of 

outside counsel time × $400). See Cross-Border 

Proposing Release, 78 FR 31110. 

aggregate burden of approximately 

300,000 hours.407

2. Rule 907—Proposed Amendments 

The Commission is proposing to 

revise Rule 907(a)(6) to indicate that a 

registered SDR’s policies and 

procedures need not contain provisions 

for obtaining ultimate parent IDs and 

participant IDs from participants that 

are platforms or registered clearing 

agencies. Under the proposed 

amendments to Rule 901(a) and 901(e), 

platforms and registered clearing 

agencies would have the duty to report 

certain security-based swaps and 

become participants of registered SDRs 

to which they report. Rule 907(a)(6), as 

adopted, requires a registered SDR to 

establish and maintain written policies 

and procedures ‘‘[f]or periodically 

obtaining from each participant 

information that identifies the 

participant’s ultimate parent(s) and any 

participant(s) with which the 

participant is affiliated, using ultimate 

parent IDs and participant IDs.’’ The 

Commission preliminarily believes that 

requiring a platform or registered 

clearing agency to report parent and 

affiliate information to a registered SDR 

would not serve any regulatory purpose 

and, therefore, has proposed to amend 

Rule 907(a)(6) to indicate that the 

obligations under Rule 907(a)(6) do not 

attach to participants that are platforms 

or a registered clearing agencies. This 

proposed amendment would not result 

in any burdens being placed on 

platforms and registered clearing 

agencies. 

3. Rule 907—Aggregate Total PRA 

Burdens and Costs 

Based on the foregoing, the 

Commission estimates that the one-time, 

initial burden for a registered SDR to 

adopt written policies and procedures 

as required under Rule 907 will be 

approximately 15,000 hours. In 

addition, the Commission estimated the 

annual burden of maintaining such 

policies and procedures, including a full 

review at least annually, making 

available its policies and procedures on 

the registered SDR’s Web site, and 

information or reports on noncompliance, as required under Rule 

907(e), will be approximately 30,000 

hours for each registered SDR. The 

Commission therefor estimates that the 

initial annualized burden associated 

with Rule 907 will be approximately 

45,000 hours per registered SDR, which 

corresponds to an initial annualized 

aggregate burden of approximately 

450,000 hours.408 The Commission 

further estimated that the ongoing 

annualized burden associated with Rule 

907 will be approximately 30,000 hours 

per registered SDR,409 which 

corresponds to an ongoing annualized 

aggregate burden of approximately 

300,000 hours.410

F. Cross-Border Matters—Rule 908 

1. Rule 908—As Adopted 

Rule 908(a), as adopted, defines when 

a security-based swap transaction is 

subject to regulatory reporting and/or 

public dissemination. Specifically, Rule 

908(a)(1)(i), as adopted, provides that a 

security-based swap shall be subject to 

regulatory reporting and public 

dissemination if ‘‘[t]here is a direct or 

indirect counterparty that is a U.S. 

person on either or both sides of the 

transaction.’’ Rule 908(a)(1)(ii), as 

adopted, provides that a security-based 

swap shall be subject to regulatory 

reporting and public dissemination if 

‘‘[t]he security-based swap is submitted 

to a clearing agency having its principal 

place of business in the United States.’’ 

Rule 908(a)(2), as adopted, provides that 

a security-based swap not included 

within the above provisions would be 

subject to regulatory reporting but not 

public dissemination ‘‘if there is a direct 

or indirect counterparty on either or 

both sides of the transaction that is a 

registered security-based swap dealer or 

a registered major security-based swap 

participant.’’ 

Regulation 908(b), as adopted, defines 

when a person might incur obligations 

under Regulation SBSR. Rule 908(b) 

provides that, notwithstanding any 

other provision of Regulation SBSR, a 

person shall not incur any obligation 

under Regulation SBSR unless it is a 

U.S. person, a registered security-based 

swap dealer, or a registered major 

security-based swap participant. 

The Commission stated its belief in 

the Regulation SBSR Adopting Release 

that Rules 908(a) and 908(b) do not 

impose any collection of information 

requirements. To the extent that a 

security-based swap transaction or 

person is subject to Rule 908(a) or 

908(b), respectively, the collection of 

information burdens are calculated as 

part of the underlying rule (e.g., Rule 

901, which imposes the basic duty to 

report security-based swap transaction 

information). 

Rule 908(c), as adopted, sets forth the 

requirements surrounding requests for 

substituted compliance. Rule 908(c)(1) 

sets forth the general rule that 

compliance with Title VII’s regulatory 

reporting and public dissemination 

requirements may be satisfied by 

compliance with the rules of a foreign 

jurisdiction that is the subject of a 

Commission order described in Rule 

908(c)(2), provided that at least one of 

the direct counterparties is either a nonU.S. person or a foreign branch. 

Rule 908(c)(2)(ii), as adopted, applies 

to any person that requests a substituted 

compliance determination with respect 

to regulatory reporting and public 

dissemination of security-based swaps. 

In connection with each request, the 

requesting party must provide the 

Commission with any supporting 

documentation that the entity believes 

is necessary for the Commission to make 

a determination, including information 

demonstrating that the requirements 

applied in the foreign jurisdiction are 

comparable to the Commission’s and 

describing the methods used by relevant 

foreign financial regulatory authorities 

to monitor compliance with those 

requirements. In the Regulation SBSR 

Adopting Release, the Commission 

estimated that the total paperwork 

burden associated with submitting a 

request for a substituted compliance 

determination with respect to regulatory 

reporting and public dissemination will 

be approximately 1,120 hours, plus 

$1,120,000 for 14 requests.411 The 

Commission noted that this estimate 

includes all collection burdens 

associated with the request, including 

burdens associated with analyzing 

whether the regulatory requirements of 

the foreign jurisdiction impose a 

comparable, comprehensive system for 

the regulatory reporting and public 

dissemination of all security-based 

swaps. Furthermore, the Commission 

observed that this estimate assumes that 

each request will be prepared de novo, 

without any benefit of prior work on 

related subjects. The Commission noted, 


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412 If and when the Commission grants a request 

for substituted compliance, subsequent applications 

might be able to leverage work done on the initial 

application. However, the Commission is unable to 

estimate the amount by which the cost could 

decrease without knowing the extent to which 

different jurisdictions have similar regulatory 

structures. 

413The Commission staff estimates that the 

paperwork burden associated with making a 

substituted compliance request pursuant to Rule 

242.908(c)(2)(ii) will be up to approximately 800 

hours (80 hours of in-house counsel time × 10 

respondents), plus $800,000 for the services of 

outside professionals (based on 200 hours of 

outside counsel time × $400 × 10 respondents). See 

Cross-Border Proposing Release, 78 FR 31110. 

414The Commission staff estimates that the 

paperwork burden associated with making a 

substituted compliance request pursuant to Rule 

908(c)(2)(ii) would be up to approximately 160 

hours (80 hours of in-house counsel time × two 

respondents) + plus $160,000 for the services of 

outside professionals (based on 200 hours of 

outside counsel time × $400 × two respondents). 

See Cross-Border Proposing Release, 78 FR 31110. 

415The Commission staff estimates that the 

paperwork burden associated with making a 

substituted compliance request pursuant to Rule 

908(c)(2)(ii) will be approximately 80 of in-house 

counsel time, plus $80,000 for the services of 

outside professionals (based on 200 hours of 

outside counsel time × $400). See id. at 31110 

416The Commission staff estimates that the 

paperwork burden associated with making a 

substituted compliance request pursuant to Rule 

908(c)(2)(ii) will be up to approximately 800 hours 

(80 hours of in-house counsel time × 10 

respondents), plus $800,000 for the services of 

outside professionals (based on 200 hours of 

outside counsel time × $400 × 10 respondents). See 

Cross-Border Proposing Release, 78 FR 31110. 

417The Commission staff estimates that the 

paperwork burden associated with making a 

substituted compliance request pursuant to Rule 

908(c)(2)(ii) would be up to approximately 160 

hours (80 hours of in-house counsel time × 2 

respondents) + plus $160,000 for the services of 

outside professionals (based on 200 hours of 

outside counsel time × $400 × 2 respondents). See 

Cross-Border Proposing Release, 78 FR 31110. 

418Public Law 104–121, Title II, 110 Stat. 857 

(1996) (codified in various sections of 5 U.S.C. and 

15 U.S.C. and as a note to 5 U.S.C. 601). 

however, that as such requests are 

developed with respect to certain 

jurisdictions, the cost of preparing such 

requests with respect to other foreign 

jurisdictions could decrease.412

In the Regulation SBSR Adopting 

Release, the Commission estimated, 

assuming ten requests in the first year, 

that the aggregated burden for the first 

year will be 800 hours, plus $800,000 

for the services of outside 

professionals.413 The Commission 

estimated that it would receive 2 

requests for substituted compliance 

determinations pursuant to Rule 

908(c)(2)(ii) in each subsequent year. 

Assuming the same approximate time 

and costs, the Commission stated that 

the aggregate burden for each year 

following the first year will be up to 160 

hours of company time and $160,000 for 

the services of outside professionals.414

2. Rule 908—Proposed Amendments 

The Commission is proposing to 

amend Rule 908(b) to make it consistent 

with 901(a)(1) which would provide 

that platforms and registered clearing 

agencies would have the duty to report 

in certain circumstances. The 

Commission proposes to amend Rule 

908(b) to provide: ‘‘Notwithstanding any 

other provision of [Regulation SBSR], a 

person shall not incur any obligation 

under [Regulation SBSR] unless it is: (1) 

A U.S. person; (2) A registered securitybased swap dealer or registered major 

security-based swap participant; (3) A 

platform; or (4) A registered clearing 

agency.’’ The Commission preliminarily 

believes that, since the proposed 

amendment to Rule 908(b) simply 

makes it clear that platforms and 

registered clearing agencies may have 

obligations under Regulation SBSR, 

there are no burdens associated with the 

amendment to Rule 908(b). In addition, 

to the extent that a platform or 

registered clearing agency does have 

obligations under Regulation SBSR, 

those burdens are discussed under the 

applicable rule. 

3. Rule 908—Aggregate Total Burdens 

and Costs 

Based on the foregoing, the 

Commission estimates the following 

aggregate total PRA burdens and costs, 

by category of entity, resulting from 

Rule 908, as adopted and as proposed to 

be amended herein. 

The Commission has estimated that 

the total paperwork burden associated 

with submitting a request for a 

substituted compliance determination 

with respect to regulatory reporting and 

public dissemination will be 

approximately 1,120 hours, plus 

$1,120,000 for 14 requests.415 The 

Commission further estimated that the 

aggregated burden for the first year will 

be 800 hours, plus $800,000 for the 

services of outside professionals.416 The 

Commission estimated that it would 

receive 2 requests for substituted 

compliance determinations pursuant to 

Rule 908(c)(2)(ii) in each subsequent 

year. Assuming the same approximate 

time and costs, the Commission stated 

that the aggregate burden for each year 

following the first year will be up to 160 

hours of company time and $160,000 for 

the services of outside professionals.417

G. Request for Comments 

Pursuant to 44 U.S.C. 3505(c)(2)(B), 

the Commission solicits comment to: 

1. Evaluate whether the proposed 

collection of information is necessary 

for the proper performance of our 

functions, including whether the 

information shall have practical utility; 

2. Evaluate the accuracy of our 

estimate of the burden of the proposed 

collection of information; 

3. Determine whether there are ways 

to enhance the quality, utility, and 

clarity of the information to be 

collected; and 

4. Evaluate whether there are ways to 

minimize the burden of collection of 

information on those who are to 

respond, including through the use of 

automated collection techniques or 

other forms of information technology. 

Persons submitting comments on the 

collection of information requirements 

should direct them to the Office of 

Management and Budget, Attention: 

Desk Officer for the Securities and 

Exchange Commission, Office of 

Information and Regulatory Affairs, 

Washington, DC 20503, and should also 

send a copy of their comments to Brent 

J. Fields, Secretary, Securities and 

Exchange Commission, 100 F Street NE., 

Washington, DC 20549–1090, with 

reference to File Number S7–03–15. 

Requests for materials submitted to 

OMB by the Commission with regard to 

this collection of information should be 

in writing, with reference to File 

Number S7–03–15 and be submitted to 

the Securities and Exchange 

Commission, Office of FOIA/PA 

Operations, 100 F Street NE., 

Washington, DC 20549–2736. As OMB 

is required to make a decision 

concerning the collections of 

information between 30 and 60 days 

after publication, a comment to OMB is 

best assured of having its full effect if 

OMB receives it within 30 days of 

publication. 

X. Consideration of Impact on the 

Economy 

For purposes of the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (‘‘SBREFA) 418 the Commission 

must advise the OMB whether the 

proposed regulation constitutes a 

‘‘major’’ rule. Under SBREFA, a rule is 

considered ‘‘major’’ where, if adopted, it 

results or is likely to result in: (1) An 

annual effect on the economy of $100 

million or more; (2) a major increase in 

costs or prices for consumers or 

individual industries; or (3) significant 

adverse effect on competition, 

investment or innovation. 

The Commission requests comment 

on the potential impact of the proposed 

rules and amendments on the economy 

on an annual basis. Commenters are 

requested to provide empirical data and 

other factual support for their views to 

the extent possible. 


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419 5 U.S.C. 603(a). 

420 5 U.S.C. 605(b). 

421See 17 CFR 240.0–10(a). 

422 17 CFR 240.17a–5(d). 

423See 17 CFR 240.0–10(c). 

424For example, as revealed in a current survey 

conducted by Office of the Comptroller of the 

Currency, 99.9% of CDS positions by U.S. 

commercial banks are held by those with assets 

over $80 billion. See Office of the Comptroller of 

the Currency, ‘‘Quarterly Report on Bank Trading 

and Derivatives Activities First Quarter 2014’’ 

(2014). 

XI. Regulatory Flexibility Act 

Certification 

Section 3(a) of the Regulatory 

Flexibility Act of 1980 (‘‘RFA’’) 419

requires the Commission to undertake 

an initial regulatory flexibility analysis 

of the proposed rules on ‘‘small 

entities.’’ Section 605(b) of the RFA 420

provides that this requirement shall not 

apply to any proposed rule or proposed 

rule amendment which, if adopted, 

would not have a significant economic 

impact on a substantial number of small 

entities. Pursuant to 5 U.S.C. 605(b), the 

Commission hereby certifies that the 

proposed rules and rule amendments to 

Regulation SBSR would not, if adopted, 

have a significant economic impact on 

a substantial number of small entities. 

In developing these proposed 

amendments to Regulation SBSR, the 

Commission has considered their 

potential impact on small entities. For 

purposes of Commission rulemaking in 

connection with the RFA, a small entity 

includes: (1) When used with reference 

to an ‘‘issuer’’ or a ‘‘person,’’ other than 

an investment company, an ‘‘issuer’’ or 

‘‘person’’ that, on the last day of its most 

recent fiscal year, had total assets of $5 

million or less; 421 or (2) a broker-dealer 

with total capital (net worth plus 

subordinated liabilities) of less than 

$500,000 on the date in the prior fiscal 

year as of which its audited financial 

statements were prepared pursuant to 

Rule 17a–5(d) under the Exchange 

Act,422 or, if not required to file such 

statements, a broker-dealer with total 

capital (net worth plus subordinated 

liabilities) of less than $500,000 on the 

last day of the preceding fiscal year (or 

in the time that it has been in business, 

if shorter); and is not affiliated with any 

person (other than a natural person) that 

is not a small business or small 

organization.423

The Commission believes, based on 

input from security-based swap market 

participants and its own information, 

that the majority of security-based swap 

transactions have at least one 

counterparty that is either a securitybased swap dealer or major securitybased swap participant, and that these 

entities—whether registered brokerdealers or not—would exceed the 

thresholds defining ‘‘small entities’’ set 

out above. Accordingly, neither of these 

types of entities would likely qualify as 

small entities for purposes of the RFA. 

Moreover, even in cases where one of 

the counterparties to a security-based 

swap is not covered by these 

definitions, the Commission believes 

that any such entities would not be 

‘‘small entities’’ as defined in 

Commission Rule 0–10. Feedback from 

industry participants and the 

Commission’s own information about 

the security-based swap market indicate 

that only persons or entities with assets 

significantly in excess of $5 million 

participate in the security-based swap 

market.424 Given the magnitude of this 

figure, and the fact that it so far exceeds 

$5 million, the Commission continues 

to believe that the vast majority of, if not 

all, security-based swap transactions are 

between large entities for purposes of 

the RFA. 

In addition, the Commission believes 

that persons that are likely to register as 

SDRs would not be small entities. Based 

on input from security-based swap 

market participants and its own 

information, the Commission continues 

to believe that most if not all registered 

SDRs would be part of large business 

entities, and that all registered SDRs 

would have assets exceeding $5 million 

and total capital exceeding $500,000. 

Therefore, the Commission continues to 

believe that no registered SDRs would 

be small entities. 

The proposed rules and rule 

amendments would apply to all 

platforms on which security-based 

swaps are executed and registered 

clearing agencies that clear securitybased swaps. Based on the 

Commission’s existing information 

about the security-based swap market 

and the entities likely to be platforms 

and registered clearing agencies, the 

Commission preliminarily believes that 

these entities would not be small 

entities. The Commission preliminarily 

believes that most, if not all, of the 

platforms and registered clearing 

agencies would be large business 

entities or subsidiaries of large business 

entities, and that all platforms would 

have assets in excess of $5 million and 

annual receipts in excess of $7,000,000. 

Therefore, the Commission 

preliminarily believes that no platforms 

or registered clearing agencies would be 

small entities. 

The Commission encourages written 

comments regarding this certification. 

The Commission solicits comment as to 

whether the proposed rules and 

amendments to Regulation SBSR could 

have an effect on small entities that has 

not been considered. The Commission 

requests that commenters describe the 

nature of any impact on small entities 

and provide empirical data to support 

the extent of such impact. 

XII. Statutory Basis and Text of 

Proposed Rules 

Pursuant to the Exchange Act, 15 

U.S.C. 78a et seq., and particularly 

Sections 3C(e), 11A(b), 13(m)(1), 13A(a), 

23(a)(1), 30(c), and 36(a), 15 U.S.C. 78c– 

3(e), 78k–1(b), 78m(m)(1), 78m–1(a), 

78w(a)(1), 78dd(c), and 78mm(a) 

thereof, the Commission is proposing to 

amend Rules 900, 901, 905, 906, 907, 

and 908 of Regulation SBSR under the 

Exchange Act, 17 CFR 242.900, 242.901, 

242.905, 242.906, 242.907, and 242.908. 

List of Subjects in 17 CFR Part 242 

Brokers, Reporting and recordkeeping 

requirements, Securities. 

Text of Amendments 

In accordance with the foregoing, and 

as amended elsewhere in this issue of 

the Federal Register, the Commission 

proposes to further amend 17 CFR part 

242 as follows: 

PART 242—REGULATIONS M, SHO, 

ATS, AC, NMS, AND SBSR AND 

CUSTOMER MARGIN REQUIREMENTS 

FOR SECURITY FUTURES 

■ 1. The authority citation for part 242 

continues to read as follows: 

Authority: 15 U.S.C. 77g, 77q(a), 77s(a), 

78b, 78c, 78g(c)(2), 78i(a), 78j, 78k–l(c), 78l, 

78m, 78n, 78o(b), 78o(c), 78o(g), 78q(a), 

78q(b), 78q(h), 78w(a), 78dd–1, 78mm, 80a– 

23, 80a–29, and 80a–37, unless otherwise 

noted. 

■ 2. In § 242.900, revise paragraph (u) 

and add paragraph (tt) to read as 

follows: 

Regulation SBSR—Regulatory 

Reporting and Public Dissemination of 

Security-Based Swap Information 

§ 242.900 Definitions. 

* * * * * 

(u) Participant, with respect to a 

registered security-based swap data 

repository, means: 

(1) A counterparty, that meets the 

criteria of § 242.908(b), of a securitybased swap that is reported to that 

registered security-based swap data 

repository to satisfy an obligation under 

§ 242.901(a); 

(2) A platform that reports a securitybased swap to that registered securitybased swap data repository to satisfy an 

obligation under § 242.901(a); or 

(3) A registered clearing agency that is 

required to report to that registered 


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security-based swap data repository 

whether or not it has accepted a 

security-based swap for clearing 

pursuant to § 242.901(e)(1)(ii). 

* * * * * 

(tt) Widely accessible, as used in 

paragraph (cc) of this section, means 

widely available to users of the 

information on a non-fee basis. 

■ 3. In § 242.901 add paragraphs (a)(1), 

(a)(2)(i), (a)(3), and (e)(1)(ii) and revise 

paragraphs (e)(2) and (h) to read as 

follows: 

§ 242.901 Reporting obligations. 

(a) * * * 

(1) Platform-executed security-based 

swaps that will be submitted to clearing. 

If a security-based swap is executed on 

a platform and will be submitted to 

clearing, the platform on which the 

transaction was executed shall report to 

a registered security-based swap data 

repository the information required by 

§§ 242.901(c), 901(d)(1), 901(d)(9), and 

901(d)(10). 

(2) * * * 

(i) Clearing transactions. For a 

clearing transaction, the reporting side 

is the registered clearing agency that is 

a counterparty to the transaction. 

* * * * * 

(3) Notification to registered clearing 

agency. A person who, under 

§ 242.901(a)(1) or § 242.901(a)(2)(ii), has 

a duty to report a security-based swap 

that has been submitted to clearing at a 

registered clearing agency shall 

promptly provide that registered 

clearing agency with the transaction ID 

of the submitted security-based swap 

and the identity of the registered 

security-based swap data repository to 

which the transaction will be reported 

or has been reported. 

* * * * * 

(e) * * * 

(1) * * * 

(ii) Acceptance for clearing. A 

registered clearing agency shall report 

whether or not it has accepted a 

security-based swap for clearing. 

(2) All reports of life cycle events and 

adjustments due to life cycle events 

shall, within the timeframe specified in 

paragraph (j) of this section, be reported 

to the entity to which the original 

security-based swap transaction will be 

reported or has been reported and shall 

include the transaction ID of the original 

transaction. 

* * * * * 

(h) Format of reported information. A 

person having a duty to report shall 

electronically transmit the information 

required under this section in a format 

required by the registered security-based 

swap data repository to which it reports. 

* * * * * 

■ 4. In § 242.905, revise paragraph (a) to 

read as follows: 

§ 242.905 Correction of errors in securitybased swap information. 

(a) Duty to correct. Any counterparty 

or other person having a duty to report 

a security-based swap that discovers an 

error in information previously reported 

pursuant to §§ 242.900 through 242.909 

shall correct such error in accordance 

with the following procedures: 

(1) If a person that was not the 

reporting side for a security-based swap 

transaction discovers an error in the 

information reported with respect to 

such security-based swap, that person 

shall promptly notify the person having 

the duty to report the security-based 

swap of the error; and 

(2) If the person having the duty to 

report a security-based swap transaction 

discovers an error in the information 

reported with respect to a security-based 

swap, or receives notification from a 

counterparty of an error, such person 

shall promptly submit to the entity to 

which the security-based swap was 

originally reported an amended report 

pertaining to the original transaction 

report. If the person having the duty to 

report reported the initial transaction to 

a registered security-based swap data 

repository, such person shall submit an 

amended report to the registered 

security-based swap data repository in a 

manner consistent with the policies and 

procedures contemplated by 

§ 242.907(a)(3). 

* * * * * 

■ 5. In § 242.906, revise paragraphs (b) 

and (c) to read as follows: 

§ 242.906 Other duties of participants. 

* * * * * 

(b) Duty to provide ultimate parent 

and affiliate information. Each 

participant of a registered security-based 

swap data repository that is not a 

platform or a registered clearing agency 

shall provide to the registered securitybased swap data repository information 

sufficient to identify its ultimate 

parent(s) and any affiliate(s) of the 

participant that also are participants of 

the registered security-based swap data 

repository, using ultimate parent IDs 

and counterparty IDs. Any such 

participant shall promptly notify the 

registered security-based swap data 

repository of any changes to that 

information. 

(c) Policies and procedures of 

security-based swap dealers, major 

security-based swap participants, 

registered clearing agencies, and 

platforms. Each participant of a 

registered security-based swap data 

repository that is a security-based swap 

dealer, major security-based swap 

participant, registered clearing agency, 

or platform shall establish, maintain, 

and enforce written policies and 

procedures that are reasonably designed 

to ensure that it complies with any 

obligations to report information to a 

registered security-based swap data 

repository in a manner consistent with 

§§ 242.900 through 242.909. Each such 

participant shall review and update its 

policies and procedures at least 

annually. 

■ 6. In § 242.907, revise paragraph (a)(6) 

to read as follows: 

§ 242.907 Policies and procedures of 

registered security-based swap data 

repositories. 

(a) * * * 

(6) For periodically obtaining from 

each participant other than a platform or 

a registered clearing agency information 

that identifies the participant’s ultimate 

parent(s) and any participant(s) with 

which the participant is affiliated, using 

ultimate parent IDs and counterparty 

IDs. 

* * * * * 

■ 7. In § 242.908, revise paragraphs 

(b)(1) and (2) and add paragraphs (b)(3) 

and (4) to read as follows: 

§ 242.908 Cross-border matters. 

* * * * * 

(b) * * * 

(1) A U.S. person; 

(2) A registered security-based swap 

dealer or registered major security-based 

swap participant; 

(3) A platform; or 

(4) A registered clearing agency. 

* * * * * 

By the Commission. 

Dated: February 11, 2015. 

Brent J. Fields, 

Secretary. 

Note: The following appendix will not 

appear in the Code of Federal Regulations: 

Appendix 

Reopening of Comment Periods for Certain 

Rulemaking Releases and Policy Statement 

Applicable to Security-Based Swaps 

Proposed Pursuant to the Securities 

Exchange Act of 1934 and the Dodd-Frank 

Wall Street Reform and Consumer 

Protection Action 

[Release No. 34–69491; File No. S7–34–10] 

http://www.sec.gov/comments/s7-34-10/

s73410.shtml 

• Email message from Christopher Young, 

Director, U.S. Public Policy, ISDA, to Thomas 

Eady, SEC, dated March 27, 2014 (‘‘ISDA 

III’’). 


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Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 14803 

• Email message from Marisol Collazo, 

Chief Executive Officer, DTCC Data 

Repository US LLC, to Thomas Eady and 

Michael J. Gaw, SEC, dated March 24, 2014 

(with attached letters submitted to the CFTC 

regarding CME Rule 1001) (‘‘DTCC VIII’’). 

• Letter from Kim Taylor, President, 

Clearing, CME Group, and Kara L. Dutta, 

General Counsel, ICE Trade Vault (‘‘ICE’’), 

LLC, to Elizabeth M. Murphy, Secretary, 

Commission, dated November 19, 2013 

(‘‘CME/ICE Letter’’). 

• Letter from Kara L. Dutta, General 

Counsel, ICE Trade Vault, LLC, to Elizabeth 

M. Murphy, Secretary, Commission, dated 

September 23, 2013 (‘‘ICE Letter’’). 

• Letter from Larry E. Thompson, General 

Counsel, Depository Trust & Clearing 

Corporation (‘‘DTCC’’), to Elizabeth M. 

Murphy, Secretary, SEC, dated August 21, 

2013 (‘‘DTCC VI’’). 

• Letter from Jeff Gooch, Head of 

Processing, Markit, Chair and CEO, 

MarkitSERV, to Elizabeth M. Murphy, 

Secretary, Commission, dated August 21, 

2013 (‘‘MarkitSERV IV’’). 

• Letter from Kathleen Cronin, Senior 

Managing Director, General Counsel, CME 

Group Inc., to Elizabeth M. Murphy, 

Secretary, Commission, dated August 21, 

2013 (‘‘CME II’’). 

Comments on Proposed Rule: Regulation 

SBSR—Reporting and Dissemination of 

Security-Based Swap Information 

[Release No. 34–63346; File No. S7–34–10] 

http://www.sec.gov/comments/s7-34-10/

s73410.shtml 

• Letter from Larry E. Thompson, General 

Counsel, the Depository Trust & Clearing 

Corporation (‘‘DTCC’’), to the Honorable 

Mary L. Schapiro, Chairman, Commission, 

and the Honorable Gary Gensler, Chairman, 

CFTC, dated June 3, 2011 (‘‘DTCC IV’’). 

• Letter from John R. Gidman, Association 

of Institutional Investors, to David A. 

Stawick, Secretary, CFTC, and Elizabeth M. 

Murphy, Secretary, Commission, dated June 

2, 2011 (‘‘Institutional Investors Letter’’). 

[Note: This comment letter is in fact dated 

‘‘June 2, 2010,’’ but the Commission deems 

the true date to be June 2, 2011. The 

comment letter references proposed 

Regulation SBSR, which the Commission 

issued in November 2010, and thus the 

comment could not have been submitted in 

June 2010.] 

• Letter from Richard M. Whiting, 

Executive Director and General Counsel, 

FSR, to David A. Stawick, Secretary, CFTC, 

and Elizabeth M. Murphy, Secretary, 

Commission, dated May 12, 2011 

(‘‘Roundtable Letter’’). 

• MFA Recommended Timeline for 

Adoption and Implementation of Final Rules 

Pursuant to Title VII of the Dodd-Frank Act 

(‘‘MFA Recommended Timeline’’), attached 

to letter from Richard H. Baker, President and 

Chief Executive Officer, MFA, to the 

Honorable Mary L. Schapiro, Chairman, 

Commission, dated March 24, 2011. 

• Letter from Edward J. Rosen, Cleary 

Gottlieb Steen & Hamilton LLP, on behalf of 

Bank of America Merrill Lynch, BNP Paribas, 

Citi, Credit Agricole Corporate and 

Investment Bank, Credit Suisse Securities 

(USA), Deutsche Bank AG, Morgan Stanley, 

Nomura Securities International, Inc., PNC 

Bank, Socie ́te ́ General, UBS Securities LLC, 

and Wells Fargo & Company, to Elizabeth M. 

Murphy, Secretary, Commission, and David 

A. Stawick, Secretary, CFTC, dated February 

14, 2011 (‘‘Cleary I’’). 

• Letter from Andrew Downes, Managing 

Director, UBS Investment Bank, and James B. 

Fuqua, Managing Director, UBS Securities 

LLC, to Elizabeth M. Murphy, Secretary, 

Commission, dated February 7, 2011 (‘‘UBS 

Letter’’). 

• Letter from Richard G. Ketchum, 

Chairman and Chief Executive Officer, 

Financial Industry Regulatory Authority 

(‘‘FINRA’’), to Elizabeth M. Murphy, 

Secretary, Commission, dated January 27, 

2011 (‘‘FINRA Letter’’). 

• Letter from Dennis M. Kelleher, 

President and Chief Executive Officer, 

Stephen W. Hall, Securities Specialist, and 

Wallace C. Turbeville, Derivatives Specialist, 

Better Markets, Inc. (‘‘Better Markets’’), to 

Elizabeth M. Murphy, Secretary, 

Commission, dated January 24, 2011 (‘‘Better 

Markets II’’). 

• Letter from Kevin Gould, President, 

Markit North America, Inc., to Elizabeth M. 

Murphy, Secretary, Commission, dated 

January 24, 2011 (‘‘Markit I’’). 

• Letter from Jeff Gooch, Chief Executive 

Officer, MarkitSERV LLC, to Elizabeth M. 

Murphy, Secretary, Commission, dated 

January 24, 2011 (‘‘MarkitSERV I’’). 

• Letter from Larry E. Thompson, General 

Counsel, DTCC, dated January 18, 2011 

(‘‘DTCC II’’). 

• Letter from Karrie McMillan, General 

Counsel, ICI, to Elizabeth M. Murphy, 

Secretary, Commission, dated January 18, 

2011 (‘‘ICI I’’). 

• Letter from Robert Pickel, Executive Vice 

Chairman, ISDA, and Kenneth E. Bentsen, Jr., 

Executive Vice President, Public Policy and 

Advocacy, SIFMA, to Elizabeth M. Murphy, 

Secretary, Commission, dated January 18, 

2011 (‘‘ISDA/SIFMA I’’), and accompanying 

study, ‘‘Block trade reporting for over-thecounter derivatives markets’’ (‘‘ISDA/SIFMA 

Block Trade Study’’). 

• Letter from Stuart J. Kaswell, Executive 

Vice President, Managing Director, and 

General Counsel, Managed Funds 

Association, to Elizabeth M. Murphy, 

Secretary, Commission, dated January 18, 

2011 (‘‘MFA I’’). 

• Letter from Lee H. Olesky, Chief 

Executive Officer, and Douglas L. Friedman, 

General Counsel, Tradeweb Markets LLC, to 

Elizabeth M. Murphy, Secretary, 

Commission, dated January 18, 2011 

(‘‘Tradeweb Letter’’). 

• Letter from Gus Sauter, Managing 

Director and Chief Investment Officer, and 

John Hollyer, Principal and Head of Risk 

Management and Strategy Analysis, 

Vanguard, to Elizabeth M. Murphy, 

Secretary, Commission, dated January 18, 

2011 (‘‘Vanguard Letter’’). 

• Letter from Julian Harding, Chairman, 

WMBAA, to Elizabeth M. Murphy, Secretary, 

Commission, dated January 18, 2011 

(‘‘WMBAA II’’). 

• Letter from R. Glenn Hubbard, Co-Chair, 

John L. Thornton, Co-Chair, and Hal S. Scott, 

Director, Committee on Capital Markets 

Regulation, David A. Stawick, Secretary, 

CFTC, and Elizabeth M. Murphy, Secretary, 

Commission, dated January 18, 2011 (‘‘CCMR 

I’’). 

• Letter from Spencer Bachus, Ranking 

Member, Committee on Financial Services, 

and Frank Lucas, Ranking Member, 

Committee on Agriculture, U.S. House of 

Representatives, to The Honorable Timothy 

Geithner, Secretary, Department of Treasury, 

the Honorable Gary Gensler, Chairman, 

CFTC, the Honorable Mary Schapiro, 

Chairman, Commission, and the Honorable 

Ben Bernanke, Chairman, Federal Reserve, 

dated December 16, 2010 (‘‘Bachus/Lucas 

Letter’’). 

• Letter from Chris Barnard, dated 

December 3, 2010 (‘‘Barnard I’’). 

Re-Opening of Comment Periods for Certain 

Rulemaking Releases and Policy Statement 

Applicable to Security-Based Swaps 

Proposed Pursuant to the Securities 

Comments on Statement of General Policy 

on the Sequencing of the Compliance Dates 

for Final Rules Applicable to Security-Based 

Swaps Adopted Pursuant to the Securities 

Exchange Act of 1934 and the Dodd-Frank 

Wall Street Reform and Consumer 

Protection Act 

[Release No. 34–67177; File No. S7–05–12] 

• Letter from Kenneth E. Bentsen, Jr., 

Executive Vice President, Public Policy and 

Advocacy, SIFMA, to Elizabeth M. Murphy, 

Secretary, Commission, dated August 13, 

2012 (‘‘SIFMA II’’). 

Comments on Cross-Border Security-Based 

Swap Activities; Re-Proposal of Regulation 

SBSR and Certain Rules and Forms Relating 

to the Registration of Security-Based Swap 

Dealers and Major Security-Based Swap 

Participants 

(Release No. 34–69490; File No. S7–02–13) 

http://www.sec.gov/comments/s7-02-13/

s70213.shtml 

• Letter from Karel Engelen, Senior 

Director, Head of Data, Reporting & FpML, 

ISDA, to Elizabeth M. Murphy, Secretary, 

Commission, dated November 14, 2014 

(‘‘ISDA IV’’). 

Real-Time Reporting: Title VII Provisions of 

the Dodd-Frank Wall Street Reform and 

Consumer Protection Act 

http://www.sec.gov/comments/df-title-vii/

real-time-reporting/real-time-reporting.shtml 

• Letter from Gerald Donini, Barclays 

Capital, Inc., to David A Stawick, Secretary, 

CFTC, and Elizabeth M. Murphy, Secretary, 

SEC, dated February 3, 2011 (‘‘Barclays I’’). 

• Letter from James Hill, Managing 

Director, Morgan Stanley, to David A 

Stawick, Secretary, CFTC, and Elizabeth M. 

Murphy, Secretary, SEC, dated November 1, 

2010 (‘‘Morgan Stanley Letter’’). 

Comments on Reporting of Security-Based 

Swap Transaction Data 

[Release No. 34–63094; File No. S7–28–10] 

http://www.sec.gov/comments/s7-28-10/

s72810.shtml 

• Letter from Larry E. Thompson, General 

Counsel, DTCC, to Elizabeth M. Murphy, 


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14804 Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Proposed Rules 

Secretary, Commission, dated December 20, 

2010 (‘‘DTCC I’’). 

• Letter from Robert Pickel, Executive Vice 

Chairman, ISDA, to Elizabeth Murphy, 

Secretary, Commission, dated December 10, 

2010 (‘‘ISDA I’’). 

Comments on Proposed Rule: Security-Based 

Swap Data Repository Registration, Duties, 

and Core Principles 

[Release No. 34–63347; File No. S7–35–10] 

http://www.sec.gov/comments/s7-35-10/

s73510.shtml 

• Letter from Larry E. Thompson, General 

Counsel, DTCC, to Elizabeth M. Murphy, 

Secretary, Commission, dated January 24, 

2011 (‘‘DTCC III’’). 

Comments on Joint Public Roundtable on 

International Issues Relating to the 

Implementation of Title VII of the DoddFrank Wall Street Reform and Consumer 

Protection Act 

[Release No. 34–64939; File No. 4–636] 

http://www.sec.gov/comments/4-636/4- 

636.shtml 

• Letter from Jeff Gooch, Chief Executive 

Officer, MarkitSERV, to David A. Stawick, 

Secretary, CFTC, and Elizabeth M. Murphy, 

Secretary, Commission, dated September 19, 

2011 (‘‘MarkitSERV III’’). 

Roundtable Transcripts 

• Joint CFTC–SEC Staff Roundtable on 

Implementation, May 2, 2011. Available at: 

http://www.cftc.gov/ucm/groups/public/@

newsroom/documents/file/csjac_

transcript050211.pdf (‘‘Implementation 

Roundtable, Day 1’’). 

• Joint CFTC–SEC Staff Roundtable on 

Implementation, May 3, 2011. Available at: 

http://www.cftc.gov/ucm/groups/public/@

newsroom/documents/file/csjac_

transcript050311.pdf (‘‘Implementation 

Roundtable, Day 2’’). 

[FR Doc. 2015–03125 Filed 3–18–15; 8:45 am] 

BILLING CODE P 


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