1182 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 

1Public Law 111–203, 124 Stat. 1376 (2010), 

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

OTCDERIVATIVES/index.htm. Pursuant to section 

701 of the Dodd-Frank Act, Title VII may be cited 

as the ‘‘Wall Street Transparency and 

Accountability Act of 2010.’’ 

2 7 U.S.C. 1, et seq. 

3New Section 2(a)(13)(A) of the CEA defines realtime public reporting as reporting ‘‘data relating to 

a swap transaction, including price and volume, ‘as 

soon as technologically practicable’ after the time 

at which the swap transaction has been executed.’’ 

4CEA section 2(a)(13)(B) states that ‘‘[t]he 

purpose of this section is to authorize the 

Commission to make 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.’’ 

5The four categories are: (i) Swaps that are 

subject to the mandatory clearing requirement in 

CEA section 2(h)(1) [added by Section 723(a)(3) of 

the Dodd-Frank Act]; (ii) swaps that are not subject 

to the mandatory clearing requirement but are 

nonetheless cleared at a registered derivatives 

clearing organization (‘‘DCO’’); (iii) swaps that are 

not cleared at a registered DCO and which are 

reported to a registered swap data repository 

(‘‘SDR’’) or to the Commission pursuant to CEA 

section 2(h)(6); and (iv) swaps that are ‘‘determined 

to be required to be cleared’’ under CEA section 

2(h)(2) but are not cleared. 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 43 

RIN 3038–AD08 

Real-Time Public Reporting of Swap 

Transaction Data 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Final rule. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘CFTC’’ or 

‘‘Commission’’) is adopting regulations 

to implement certain statutory 

provisions enacted by the Dodd-Frank 

Wall Street Reform and Consumer 

Protection Act (‘‘Dodd-Frank Act’’). 

Specifically, in accordance with the 

Dodd-Frank Act, the Commission is 

adopting rules to implement a 

framework for the real-time public 

reporting of swap transaction and 

pricing data for all swap transactions. 

DATES: Effective date: March 9, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Thomas Leahy, Associate Director, 

Division of Market Oversight (‘‘DMO’’) 

at (202) 418–5278 or tleahy@cftc.gov; 

Jeffrey L. Steiner, Special Counsel, DMO 

at (202) 418–5482 or jsteiner@cftc.gov; 

Susan Nathan, Senior Special Counsel, 

DMO at (202) 418–5133 or 

snathan@cftc.gov; Jason Shafer, 

Attorney-Advisor, Office of General 

Counsel at (202) 418–5097 or 

jshafer@cftc.gov; or Laurie Gussow, 

Attorney-Advisor, DMO at (202) 418– 

7623 or lgussow@cftc.gov; Commodity 

Futures Trading Commission, Three 

Lafayette Center, 1155 21st Street NW., 

Washington, DC 20581. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

A. Overview 

B. Summary of the Proposed Part 43 

Regulations 

1. Proposed § 43.3—Method and Timing 

for Real-Time Public Reporting 

2. Proposed § 43.4—Swap Transaction and 

Pricing Data To Be Publicly 

Disseminated in Real-Time 

3. Proposed § 43.5—Block Trades and 

Large Notional Swaps for Particular 

Markets and Transactions 

4. Proposed Appendix A to Part 43 

C. Overview of Comments Received 

D. Proposed § 43.5—Block Trades and 

Large Notional Swaps 

II. Part 43 of the Commission’s Regulations— 

Final Rules 

A. Section 43.1—Purpose, Scope and Rules 

of Construction 

1. Scope—Generally 

2. Swaps Between Affiliates and Portfolio 

Compression Exercises 

3. Uncleared or Bespoke Swaps 

4. Foreign Exchange (‘‘FX’’) Asset Class 

5. Limitations and Special 

Accommodations 

6. Liquidity 

7. International Issues 

8. Final Rule Text of § 43.1 

B. Section 43.2—Definitions 

1. Harmonization 

2. Defined Terms 

3. Additional Issues Relating to Defined 

Terms 

C. Section 43.3—Method and Timing for 

Real-Time Public Reporting 

1. Responsibilities of Parties to a Swap 

(§ 43.3(a)) 

2. Public Dissemination of Swap 

Transaction and Pricing Data (§ 43.3(b)) 

3. Requirements for Registered Swap Data 

Repositories in Providing the Public 

Dissemination of Swap Transaction and 

Pricing Data (§ 43.3(c)) 

4. Requirements for Third-Party Service 

Providers (Proposed § 43.3(d)) 

5. Availability of Swap Transaction and 

Pricing Data to the Public (§ 43.3(d)) 

6. Errors and Omissions (§ 43.3(e)) 

7. Hours of Operation of Registered Swap 

Data Repositories (§ 43.3(f)) 

8. Acceptance of Data During Closing 

Hours (§ 43.3(g)) 

9. Timestamp Requirements (§ 43.3(h)) 

10. Fees Charged by SDRs (§ 43.3(i)) 

D. Section 43.4—Swap Transaction and 

Pricing Data to be Publicly Disseminated 

in Real-Time 

1. In General (§ 43.4(a)) 

2. Public Dissemination of Data Fields 

(§ 43.4(b)) 

3. Additional Swap Information (§ 43.4(c)) 

4. Amendments to Data Fields (Proposed 

§ 43.4(d)) 

5. Anonymity of the Parties to a Publicly 

Reportable Swap Transaction (§ 43.4(d)) 

6. Unique Product Identifier (§ 43.4(e)) 

7. Reporting of Notional or Principal 

Amounts to a Registered Swap 

Repository (§ 43.4(f)) 

8. Public Dissemination of Rounded 

Notional or Principal Amounts (§ 43.4(g)) 

9. Public Dissemination Caps on Notional 

or Principal Amounts (§ 43.4(h)) 

E. Section 43.5—Time Delays for Public 

Dissemination of Swap Transaction and 

Pricing Data 

F. Appendix A to Part 43 (‘‘Data Fields for 

Public Dissemination’’) 

III. Effectiveness/Implementation and Interim 

Period 

IV. Paperwork Reduction Act 

V. Cost-Benefit Considerations 

VI. Regulatory Flexibility Act 

VII. List of Commenters 

I. Background 

A. Overview 

On July 21, 2010, President Obama 

signed into law the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (the ‘‘Dodd-Frank Act’’) 1 Title VII of 

which amended the Commodity 

Exchange Act (‘‘CEA’’ or the ‘‘Act’’) 2 to 

establish a comprehensive new 

regulatory framework for swaps and 

security-based swaps. The legislation 

was intended to reduce risk, increase 

transparency and promote market 

integrity within the financial system by, 

among other things: (1) Providing for the 

registration and comprehensive 

regulation of swap dealers (‘‘SDs’’) and 

major swap participants (‘‘MSPs’’); (2) 

imposing clearing and trade execution 

requirements on standardized derivative 

products; (3) creating robust 

recordkeeping and real-time reporting 

regimes; and (4) enhancing the 

Commission’s rulemaking and 

enforcement authorities with respect to, 

among others, all registered entities and 

intermediaries subject to the 

Commission’s oversight. 

Section 727 of the Dodd-Frank Act 

added to the CEA new section 2(a)(13), 

which establishes standards and 

requirements related to real-time 

reporting and the public availability of 

swap transaction and pricing data. This 

section directs the Commission to 

promulgate rules providing for the 

public availability of such data in realtime,3 in such form and at such times 

as the Commission deems appropriate to 

enhance price discovery.4 CEA section 

2(a)(13)(C) establishes the four types of 

swaps for which transaction and pricing 

data must be reported to the public in 

real-time.5 Because these categories 

together comprise all swaps, the realtime reporting requirements apply to all 

swaps, including those swaps executed 

on or pursuant to the rules of a 

registered swap execution facility 

(‘‘SEF’’) or a designated contract market 

(‘‘DCM’’), and those swaps executed 

bilaterally between counterparties and 


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Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 1183 

6As explained more fully in the Commission’s 

Notice of Proposed Rulemaking, the legislative 

history of the Dodd-Frank Act suggests that the realtime reporting requirements of CEA section 2(a)(13) 

apply to all swaps. See Commission, Notice of 

Proposed Rulemaking: Real-Time Public Reporting 

of Swap Transaction Data, 75 FR 76140 (Dec. 7, 

2010) (‘‘Real-Time NPRM’’ or ‘‘Proposing Release’’). 

7 In addition, the Commission is required by CEA 

section 2(a)(13)(C)(iii) to prescribe real-time public 

reporting requirements for uncleared swaps, other 

than those uncleared swaps described in CEA 

section 2(a)(13)(C)(iv), ‘‘in a manner that does not 

disclose the business transactions and market 

positions of any person.’’ 

8See Real-Time NPRM supra note 6. Interested 

persons are directed to the Real-Time NPRM for a 

full discussion of each of the proposed part 43 

rules. 

9Section 763 of the Dodd-Frank Act authorizes 

the SEC to promulgate rules ‘‘to provide for the 

public availability of security-based swap 

transaction, volume, and pricing data * * *.’’ The 

SEC is adopting rules related to the real-time 

reporting of security-based swaps as required by 

Section 763 of the Dodd-Frank Act. 

10Section 712(a)(1) of the Dodd-Frank Act 

requires staff to consult with the SEC and other 

prudential regulators. 

11Comment letters received in response to the 

Proposing Release may be found on the 

Commission’s Web site at http://comments.cftc.gov/ 

PublicComments/CommentList.aspx?id=919. 

12As noted, the categories of swaps described in 

CEA section 2(a)(13)(C) account for all swaps, 

whether cleared or uncleared and regardless of 

whether executed on or pursuant to the rules of a 

SEF or DCM, or executed off-facility. 

13See CEA section 2(a)(13)(F). 

14See CEA section 2(a)(13)(D). 

not pursuant to the rules of a SEF or 

DCM (‘‘off-facility swaps’’).6

With regard to swaps that are subject 

to the mandatory clearing requirement 

(or excepted from such requirement) 

and those that are not required to be 

cleared by a registered DCO but are 

cleared, CEA section 2(a)(13)(E) directs 

the Commission to prescribe rules that 

(i) ensure that publicly disclosed 

information does not identify the 

participants; (ii) specify the criteria for 

determining what constitutes a large 

notional swap transaction (block trade) 

for particular markets and contracts; (iii) 

specify the appropriate time delay for 

reporting large notional swap 

transactions (block trades) to the public; 

and (iv) take into account whether 

public disclosure will materially reduce 

market liquidity. CEA section 2(a)(13)(E) 

does not require explicitly that the rules 

promulgated by the Commission contain 

similar provisions for the uncleared 

swaps described in CEA section 

2(a)(13)(C)(iii) and (iv). However, in 

exercising its authority under CEA 

section 2(a)(13)(B) to ‘‘make 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,’’ the Commission is 

authorized to prescribe rules similar to 

those provisions in CEA section 

2(a)(13)(E) for uncleared swaps 

described in CEA sections 

2(a)(13)(C)(iii) and (iv).7

B. Summary of the Proposed Part 43 

Regulations 

On December 7, 2010, the 

Commission published for comment 

proposed part 43 of its regulations to 

implement the real-time reporting 

mandate of the Dodd-Frank Act.8 At the 

foundation of these regulations was the 

Commission’s belief that real-time 

public dissemination of swap 

transaction and pricing data supports 

the fairness and efficiency of markets 

and increases transparency, which in 

turn improves price discovery and 

decreases risk (e.g., liquidity risk). The 

Commission’s Proposing Release thus 

introduced, in addition to definitions of 

terms and processes relevant to realtime public reporting, rules governing: 

(1) The entities or persons that shall be 

responsible for reporting swap 

transaction and pricing data; (2) the 

entities or persons that shall be 

responsible for publicly disseminating 

such data; (3) the data fields and 

guidance with respect to the appropriate 

format and manner for data to be 

reported to the public in real time; (4) 

the appropriate minimum size and time 

delay for block trades and large notional 

swaps; and (5) the proposed effective 

date and implementation schedule for 

the proposed rules. 

The Commission’s proposed part 43 

rules reflected consultation with staff of 

both the Securities and Exchange 

Commission (the ‘‘SEC’’) 9 and the 

Board of Governors of the Federal 

Reserve.10 The proposed rules also were 

informed by discussions during a joint 

public roundtable to discuss swap data, 

SDRs and real-time reporting conducted 

by CFTC and SEC staff on September 14, 

2010 (the ‘‘Roundtable’’); public 

comments received and posted on the 

Commission’s Internet Web site; 11 and 

meetings and discussions between 

CFTC staff and market participants. 

As proposed, part 43 applied to all 

swaps 12 as defined in CEA section 

1a(47) and as may be further defined by 

Commission regulations. The proposed 

rules applied real-time reporting 

requirements to registered entities 

(SEFs, DCMs and registered swap data 

repositories (‘‘SDRs’’)) and the swap 

counterparties—including registered or 

exempt SDs, registered or exempt MSPs 

and U.S.-based end-users. 

1. Proposed § 43.3—Method and Timing 

for Real-Time Public Reporting 

CEA section 2(a)(13) directed the 

Commission to prescribe rules 

specifying the method and timing for 

real time public reporting. Consistent 

with that mandate, the Commission 

proposed in § 43.3 to require: (1) The 

parties to a swap transaction (including 

agents of the parties) to report swap 

transaction and pricing data to the 

appropriate registered entity in a timely 

manner; 13 and (2) registered entities to 

publicly disseminate swap transaction 

and pricing data.14 To implement its 

authority to make swap transaction and 

pricing data available to the public in 

such form and at such times as it 

determines appropriate to enhance price 

discovery, the Commission proposed in 

§ 43.3 to establish the manner in which 

swap counterparties must report the 

swap transaction and pricing data to the 

appropriate registered entity, the 

manner in which registered entities 

must publicly disseminate the data in 

real time and the responsibilities of the 

reporting party to each swap. Proposed 

§ 43.3 also established requirements for 

acceptance and public dissemination of 

swap transaction and pricing data by 

SDRs and third-party service providers 

and specified standards for data 

recordkeeping and retention as well as 

availability and accessibility of real-time 

swap transaction and pricing data. In 

addition, proposed § 43.3 established 

the process by which errors or 

omissions in publicly disseminated 

swap transaction and pricing data 

would be cancelled and/or corrected, 

the hours of operation for SDRs and the 

procedures for scheduling closing 

hours. 

2. Proposed § 43.4—Swap Transaction 

and Pricing Data To Be Publicly 

Disseminated in Real-Time 

CEA section 2(a)(13)(B) directs the 

Commission to make 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. Proposed 

§ 43.4 required that swap transaction 

information be reported to a real-time 

disseminator and established the 

manner and format in which this data 

will be publicly disseminated. In that 

regard, appendix A to proposed part 43 

provides a list of data fields which an 

SDR must publicly disseminate 

regarding swap transactions, and pricing 

data, as well as guidance on an 

acceptable public reporting format and 

order for the listed data fields. 

CEA sections 2(a)(13)(C) and (E) 

reflect Congress’ intent that regulators 

‘‘ensure that the public reporting of 

swap transactions and pricing data does 

not disclose the names or identities of 


tkelley on DSK3SPTVN1PROD with RULES2
1184 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 

15 156 Cong. Rec. S5921 (daily ed. July 15, 2010) 

(Statement of Sen. Blanche Lincoln). 

16The term ‘‘swap market’’ was defined in 

proposed § 43.2(z) as ‘‘any registered swap 

execution facility or registered designated contract 

market that makes swaps available for trading.’’ As 

discussed below, the Commission is not adopting 

the term ‘‘swap market’’ and is, for clarity, changing 

such references to ‘‘registered swap execution 

facility or designated contract market.’’ 

17The Commission described a hypothetical 

example in which the underlying asset to an offfacility swap that has a specific delivery point at 

Lake Charles, Louisiana—a contract commonly 

known to be traded by only two companies. 

Disclosing the underlying asset to the public would 

effectively disclose that one of those two companies 

was entering into the trade. See Real-Time NPRM 

supra note 6, at 76150. Proposed § 43.4(e)(2) would 

enable the reporting party to use a broader 

geographic region in place of the specific delivery 

point. 

18The Commission issued proposed part 23 

which was published in the Federal Register on 

November 23, 2010. 75 FR 71397. Proposed part 23 

provided, inter alia, the business conduct standards 

for SDs and MSPs. Proposed § 23 establishes 

reporting, recordkeeping, and daily trading records 

requirements for SDs and MSPs. Specifically, 

§ 23.201(d) provides that SDs and MSPs would be 

required to maintain records of information 

required to be reported on a real-time basis and 

records of information relating to large notional 

swaps in accordance with proposed part 43 and 

CEA section (2)(a)(13). When a less specific data 

field is reported in order to protect anonymity of 

participants to such swap, then the record must 

contain the rationale for reporting a less specific 

data field. The comment period for proposed part 

23 closed on June 3, 2011; however the rule has not 

yet been adopted. 

19Swap-specific events would include novations, 

swap unwinds, partial novations and partial swap 

unwinds. 

20See 75 FR 76159 at note 67. 

21CEA section 2(a)(13)(E)(iii). As noted above, the 

Commission is only required to prescribe rules 

relating to CEA section 2(a)(13)(E) for swaps subject 

to the mandatory clearing requirement (including 

those excepted from such requirement pursuant to 

CEA section 2(h)(7)) and swaps that are not subject 

to the mandatory clearing requirement but are 

cleared, as described in CEA sections 2(a)(13)(C)(i) 

and (ii). 

the parties to the transactions.’’ 15 In 

response, the Commission proposed in 

§ 43.4(e)(1) to prohibit the public 

dissemination of swap transaction and 

pricing information which identifies or 

otherwise facilitates the identification of 

a party to a swap. This section further 

provided that an SDR may not report 

such data in a manner that discloses or 

otherwise facilitates the identification of 

a party to a swap. The Commission 

recognized that the latter prohibition 

may result in a loss of clarity with 

respect to the precise characteristics of 

swaps in certain circumstances, and 

required in proposed § 43.4(e)(2) that a 

reporting party or a swap market 16

provide the real-time disseminator with 

a specific description of the underlying 

asset and tenor of a swap that is general 

enough to provide anonymity but 

specific enough to permit a meaningful 

understanding of the swap. For certain 

off-facility swaps—particularly ‘‘other 

commodity’’ swaps that have 

underlying assets with specific delivery 

or pricing points—market participants 

may be able to infer the identity of a 

party or swap counterparties based on 

the description of an underlying asset. 

Accordingly, proposed § 43.4(e)(2) was 

intended to permit reporting parties of 

off-facility swaps to publicly 

disseminate a description of an 

underlying asset or tenor in a way that 

does not disclose a party to a swap but 

nonetheless provides a meaningful 

understanding of the swap for purposes 

of enhancing price discovery.17

In proposing § 43.4(e), the 

Commission recognized that SEFs and 

DCMs may differ and that new types of 

swaps may emerge. For that reason, the 

Commission did not propose specific 

guidelines for describing an underlying 

asset for the purposes of this rule. 

Because the specificity of the 

description would vary based on 

particular markets and contracts, the 

proposed rules were intended to 

provide reporting parties with 

discretion in reporting swap transaction 

and pricing data. Proposed § 43.4(e)(2) 

and proposed part 23 of the 

Commission’s regulations 18 would 

require SDs and MSPs who do not 

specifically describe an underlying asset 

and/or tenor because such disclosure 

would facilitate the identification of a 

counterparty, to document why the 

specific information was not publicly 

disseminated. 

The Commission anticipated that 

unique product identifiers may develop 

for various swap products in various 

markets. Proposed § 43.4(f) provided 

that if a unique product identifier is 

developed that sufficiently describes the 

information in one or more of the data 

fields for public dissemination, 

consistent with appendix A to proposed 

part 43, the unique product identifier 

may be used in lieu of such data fields. 

Absent a unique product identifier, the 

publicly disseminated swap transaction 

and pricing data must contain all of the 

appropriate product identification fields 

in appendix A to proposed part 43. 

As proposed, § 43.4(g) required public 

dissemination of any swap-specific 

event 19 that occurs during the life of a 

swap and affects the price of the swap 

(a ‘‘price forming continuation event’’). 

Proposed §§ 43.4(h) and (i) would 

govern public reporting of the notional 

or principal amount for all swaps. As 

proposed, these rules would require (i) 

a reporting party to transmit to a SEF or 

DCM the actual notional or principal 

size of any swap (including large 

notional swaps) or any block trade; and 

(ii) a SEF or DCM to transmit to a realtime disseminator the actual notional or 

principal size for all swaps executed on 

or pursuant to its rules. Section 43.4(j) 

proposed a rounding convention for 

notional or principal size and provided 

that the rounding should be applied at 

the point of public dissemination. 

3. Proposed § 43.5—Block Trades and 

Large Notional Swaps for Particular 

Markets and Transactions 

CEA sections 2(a)(13)(E)(ii) and (iii) 

require the Commission to prescribe 

rules ‘‘to specify the criteria for 

determining what constitutes a large 

notional swap transaction (block trade) 

for particular markets and contracts’’ 

and ‘‘to specify the appropriate time 

delay for reporting large notional swap 

transactions (block trades) to the 

public,’’ with respect to swaps subject to 

the clearing mandate (including swaps 

that are excepted from the clearing 

mandate pursuant to CEA section 

2(h)(7)) and those swaps that are not 

subject to the clearing mandate but are 

cleared. Similar provisions are not 

explicitly required for uncleared swaps, 

however, the Commission is authorized 

pursuant to its authority under CEA 

section 2(a)(13)(B) to prescribe similar 

rules for uncleared swaps described in 

CEA sections 2(a)(13)(C)(iii) and (iv). 

Proposed § 43.5 established: (1) The 

procedures for determining the 

appropriate minimum sizes for block 

trades and large notional swaps; and (2) 

the appropriate time delays for the 

reporting of block trades and large 

notional swaps. In describing the 

proposed block trade rules, the 

Commission noted that it would 

continue to analyze and study the 

effects of increased transparency on 

post-trade liquidity in the context of 

block trades and large notional swaps.20

The Commission anticipated that new 

data would continue to inform this 

discussion and could cause subsequent 

revision of the Proposing Release. 

As noted, CEA section 2(a)(13)(A) 

requires that all parties to swap 

transactions, including parties to block 

trades and large notional swaps, report 

data relating to swap transactions ‘‘as 

soon as technologically practicable after 

the time at which the swap transaction 

has been executed.’’ The Dodd-Frank 

Act also requires that the Commission 

promulgate rules ‘‘to specify the 

appropriate time delay for reporting 

large notional swaps transactions (block 

trades) to the public.’’ 21 In writing such 

rules, the Commission is charged to 

‘‘take into account whether public 

disclosure will materially reduce market 


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Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 1185 

22CEA section 2(a)(13)(E)(iv). As noted above, the 

Commission is only required to prescribe rules 

relating to CEA section 2(a)(13)(E) for swaps subject 

to the mandatory clearing requirement (including 

those excepted from such requirement pursuant to 

CEA section 2(h)(7)) and swaps that are not subject 

to the mandatory clearing requirement but are 

cleared, as described in CEA sections 2(a)(13)(C)(i) 

and (ii). 

23 In addition to the comments specifically 

discussed herein, the Commission also received 

comments from various groups during the course of 

external meetings. Those commenters include, 

among others: Rabobank Nederland, Insurance 

Groups (American Counsel of Life Insurers, 

Genworth, Manulife, John Hancock Life, New York 

Life, Northwestern Mutual, Prudential, MetLife and 

Allstate Life); Fidelity Investments; and Vanguard. 

24The initial comment period with respect to 

proposed part 43 closed on February 7, 2011. The 

comment periods for most proposed rulemakings 

implementing the Dodd-Frank Act—including the 

proposed part 43 rules—subsequently were 

reopened for the period of April 27 through June 

2, 2011. 

25A complete list of the full names and 

abbreviations of commenters is included in section 

VII at the end of this release; comment letters are 

available through the Commission Web site at 

http://comments.cftc.gov/PublicComments/ 

CommentList.aspx?id=919. 

26Commenters included: MFA; Barclays; AII; GS; 

UBS; GFXD; Freddie Mac; ISDA/SIFMA; Better 

Markets; ABC/CIEBA; SIFMA AMG; WMBAA; 

FHLBanks; Coalition for Derivatives End-Users; 

Cleary; and Vanguard. 

27 In light of clarifications in § 43.2, the terms 

‘‘large notional swap’’ and ‘‘large notional offfacility swap’’ will be used interchangeably 

throughout this Adopting Release. See infra note 29. 

28The notice of proposed rulemaking regarding 

block trade sizes and criteria is referenced 

throughout this release as the ‘‘block trade reproposal’’ or ‘‘re-proposal of the block trade rules.’’ 

liquidity.’’ 22 The Commission 

recognized that the potential market 

impact of reporting a block trade or 

large notional swap is an important 

consideration in the determination of an 

appropriate time delay before public 

dissemination of block trade or large 

notional swap transaction and pricing 

data. Proposed § 43.5(k) specified the 

appropriate time delays for public 

dissemination of block trades and large 

notional swaps and established that the 

time delay for public dissemination 

begins at execution of the swap. 

4. Proposed Appendix A to Part 43 

The Commission anticipated that realtime swap transaction and pricing data 

may be publicly disseminated by 

multiple real-time disseminators in the 

same asset class. In order to minimize 

the effects of fragmentation and enhance 

consistency both within and among 

asset classes, the Commission proposed 

in appendix A to part 43 a number of 

data fields that should be publicly 

disseminated and provided guidance on 

the format and manner of reporting. The 

Commission believes that the public 

dissemination of standardized data 

should reduce the search costs to the 

public and market participants while 

increasing consolidation of real-time 

swap transaction and pricing data and 

promoting post-trade transparency and 

price discovery. 

C. Overview of Comments Received 23

The Commission received comments 

from 88 interested parties 24

representing a cross-section of the global 

financial services industry, including 

trade associations for both financial and 

non-financial end-users, potential SDs 

and MSPs; law firms representing 

diverse interests; exchanges; and 

numerous service and technology 

providers.25 While many commenters 

expressed general support for the 

proposed part 43 rules, they also offered 

recommendations for clarification or 

modification of specific proposed 

regulations. Other commenters objected 

to particular aspects of the Proposing 

Release. 

In addition to a general solicitation for 

comment on all aspects of the Proposing 

Release, the Commission requested 

comment on a number of specific, 

focused questions related to particular 

provisions. For example, commenters 

were asked to address issues related to 

(i) the appropriate implementation 

schedule for the final rules; (ii) which 

swap counterparties should be covered 

by the reporting requirements of part 43 

in order to enhance price discovery; (iii) 

the responsibilities of the swap 

counterparties to report swap 

transaction and pricing data (including 

the advisability of establishing 

maximum timeframes in which 

reporting parties must report data to an 

SDR); (iv) whether the final rules should 

address the reporting and public 

dissemination of swap transaction and 

pricing data for swaps transacted 

between two non-U.S. persons; (v) the 

circumstances under which SEFs and 

DCMs are deemed to have satisfied their 

public dissemination requirements; (vi) 

recordkeeping and retention 

requirements, including the anticipated 

costs associated with storing real-time 

swap transaction and pricing data for an 

extended period of time; (vii) protection 

of the anonymity of swap counterparties 

(including the utility of rounding 

notional amounts); (viii) the utility of 

the proposed data fields (including 

whether dissemination of additional 

data fields would enhance transparency 

and price discovery); and (ix) whether 

there would be an adverse price impact 

for traders and/or an impact on liquidity 

if all market participants knew the swap 

transaction and pricing details of all 

swaps in real-time. 

As noted, the SEC is separately 

authorized by section 763 of the DoddFrank Act to adopt real-time reporting 

rules for security-based swaps (‘‘SBSs’’). 

Because the Commission and the SEC 

regulate different products and markets 

and thus may have proposed differing 

regulatory requirements, the 

Commission particularly requested 

comments on the impact of any 

differences between the two regulatory 

approaches. 

The Commission also requested 

comment with respect to its cost-benefit 

considerations generally, and 

specifically asked whether there are 

alternative ways it can meet its mandate 

under section 727 of the Dodd-Frank 

Act in a less costly manner. Similarly, 

commenters were invited to submit data 

or other information quantifying or 

qualifying the costs and benefits of the 

Proposing Release. 

The comments received will be 

addressed as appropriate throughout the 

following discussion of the final rules. 

D. Proposed § 43.5—Block Trades and 

Large Notional Swaps 

Several commenters urged that the 

Commission study additional data 

before setting appropriate minimum 

block sizes and time delays 26 for public 

dissemination of block trades and large 

notional off-facility swaps.27 The 

Commission recognized the merit in 

those concerns, and subsequent to 

publication of the proposed part 43 

rules, it continued to receive and 

analyze swap data for various asset 

classes in order to make informed 

decisions with respect to the 

appropriate criteria for determining 

block trade sizes and the initial 

appropriate minimum block trade sizes. 

The Commission agrees with the 

commenters that additional analysis is 

necessary prior to issuance of final rules 

for appropriate minimum block sizes, 

and accordingly has determined not to 

make final its proposed § 43.5 rules 

specifying the criteria for determining 

block trade sizes. Instead, the 

Commission intends to issue a separate 

notice of proposed rulemaking that will 

specifically address the appropriate 

criteria for determining appropriate 

minimum block trade sizes in light of 

data and comments received.28

Comments on these issues received in 

connection with the instant rulemaking 

will be considered by the Commission 

in its re-proposal of the block trade 

rules. 

II. Part 43 of the Commission’s 

Regulations—Final Rules 

As proposed in the Real-Time NPRM, 

the provisions of part 43 governed the 


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29This adopting release is referred to herein as 

the ‘‘Adopting Release.’’ 

30CEA section 2(a)(13)(B) provides that the 

purpose of section 727 of the Dodd-Frank Act is ‘‘to 

authorize the Commission to make 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.’’ 

31CEA section 2(a)(13)(C) provides that ‘‘[t]he 

Commission is authorized and required to provide 

by rule for the public availability of swap 

transaction and pricing data’’ for four categories of 

swaps: (1) Swaps subject to the mandatory clearing 

requirement described in CEA section 2(h)(1) 

(including those swaps that are excepted from the 

requirement pursuant to CEA section 2(h)(7)); (2) 

swaps that are not subject to the mandatory clearing 

requirement described in CEA section 2(h)(1), but 

are cleared at a registered DCO; (3) swaps that are 

not cleared at a registered DCO and are reported to 

an SDR under CEA section 2(h)(6) (reporting for this 

category of swaps must be done in a manner that 

does not disclose the business transactions and 

market positions of any person); and (4) swaps that 

are determined to be required to be cleared under 

CEA section 2(h)(2) but are not cleared. 

32See supra note 23. 

33A separate proposed rulemaking under part 23 

addresses rules relating to portfolio compression. 75 

FR 81519 (Dec. 18, 2010). 

34As used throughout this Adopting Release, 

‘‘bespoke’’ indicates that a swap is off-facility and 

is not standardized. 

35 In addition, one commenter stated that the 

reporting and disclosure requirements could violate 

the First and Fifth Amendments to the United 

States Constitution by purportedly compelling 

‘‘non-commercial speech’’ without satisfying a 

heightened standard and by ‘‘taking’’ protected 

private information without just compensation. See 

CL–Sadis and Goldberg. The Commission has 

carefully considered these comments and pertinent 

judicial precedent. It believes that the data 

reporting and disclosure requirements at issue 

would not violate the First Amendment because, 

among other reasons, the information at issue is 

commercial speech subject to a lower, reasonablyrelated standard. See, e.g., Zauderer v. Office of 

Disciplinary Counsel of Supreme Court of Ohio, 471 

U.S. 626, 650–53 (1985) (state bar did not violate 

First Amendment by requiring attorneys to fully 

disclose fee and cost arrangements in 

advertisements; the speech was commercial because 

it pertained to the economic interests of the parties, 

applicable standard was therefore whether the 

disclosure requirement was reasonably related to 

legitimate state interest, and the disclosure 

requirement at issue was rationally related to the 

state’s interest in preventing deception of 

consumers). The Commission also believes that the 

requirements at issue would not violate the Fifth 

Amendment. Among other reasons, participants 

have no reasonable investment-backed expectation 

that information they submit will be kept 

confidential because they voluntarily submit it, 

knowing that it will be publicly disclosed to the 

extent provided by statute and regulation. In 

addition, the reporting and disclosure requirements 

are reasonably related to the government’s 

legitimate interests in transparency and price 

discovery. See, e.g., Ruckelshaus v. Monsanto, 467 

U.S. 986, 1006–07 (1984) (determining that there 

was no regulatory taking where applicant for 

pesticide registration was required by federal 

pesticide law to submit certain trade secret product 

data to EPA that EPA could then publicly disclose; 

applicant knew at time of submission that statute 

authorized EPA to do so, applicant therefore could 

not have had a ‘‘reasonable investment-backed 

expectation’’ that data would be kept confidential, 

and the government’s action was reasonably related 

to legitimate government interest in an area of 

public concern and regulation). 

method and timing of real-time public 

reporting; swap transaction and pricing 

data to be publicly disseminated in realtime; and time delays for public 

dissemination of swap transaction and 

pricing data. The purpose, scope and 

rules of construction of part 43 were 

established in proposed § 43.1; 

proposed definitions of terms and 

processes relevant to real-time public 

reporting were specified in proposed 

§ 43.2. Proposed § 43.3 established the 

method and timing for real-time public 

reporting and dissemination of swap 

transaction and pricing data; this rule 

also delineated the responsibilities of 

swap counterparties and SDRs, and 

established procedures for 

recordkeeping, correction of errors and 

omissions, and hours of operation. 

Proposed § 43.4 specified the format in 

which swap transaction and pricing 

data would be publicly disseminated 

and appendix A to proposed part 43 

described the fields for which an SDR 

must publicly disseminate swap 

transaction and pricing data. As 

proposed, § 43.5 prescribed the criteria 

for determining what constitutes a large 

notional swap transaction (block trade) 

and specified the appropriate time delay 

for reporting block trades to the public. 

While the Commission has adopted 

the part 43 rules substantially as 

proposed, there are several salient 

changes.29 As noted above, the 

Commission is not adopting those 

elements of proposed § 43.5 relating to 

the establishment of block trade sizes. 

The Commission believes, in 

accordance with comments, that further 

study and analysis of block trade data is 

necessary prior to establishing 

minimum block trade size and for that 

reason has determined to make final 

only those elements of proposed § 43.5 

relating to timestamp requirements and 

time delays for the public dissemination 

of swap transaction and pricing data. In 

that regard, § 43.5 provides that until 

the Commission establishes an 

appropriate minimum block size for a 

swap or group of swaps, the time delays 

specified therein will apply to all swaps 

that do not have an appropriate 

minimum block size. The anonymity 

provisions in § 43.4 have been clarified, 

and the Commission has eliminated a 

provision in proposed § 43.3 which 

would have permitted dissemination of 

swap transaction and pricing data by 

third-party service providers. Instead, 

the Commission will require that all 

public dissemination of such data occur 

through an SDR. Unless otherwise 

discussed in this section, the regulations 

are adopted as proposed. 

A. Section 43.1—Purpose, Scope and 

Rules of Construction 

Proposed § 43.1 applied to all swaps 

as defined in CEA section 1a(47) and as 

may be further defined by Commission 

regulation. The provisions of part 43 

also applied to the categories of swaps 

set forth in CEA section 2(a)(13)(C); 

those categories account for the universe 

of swaps subject to the Dodd-Frank 

Act’s regulatory regime, whether cleared 

or uncleared, and regardless of whether 

executed on a SEF, DCM or off-facility. 

The proposed rules applied real-time 

reporting requirements to SEFs, DCMs, 

SDRs and the swap counterparties, 

including registered or exempt SDs, 

registered or exempt MSPs and U.S.- 

based end-users. The Commission 

requested comment generally on the 

scope of transactions covered by this 

part, and specifically with respect to 

which swap counterparties should be 

subject to the reporting requirements of 

this part. 

1. Scope—Generally 

Proposed § 43.1(a) stated that the 

purpose of part 43 related to ‘‘the 

collection and public dissemination of 

certain swap transaction and pricing 

data to enhance transparency and price 

discovery.’’ 30 As proposed, § 43.1(b)(1) 

stated that the provisions of part 43 

applied to all swaps as defined in CEA 

section 1(a)(47) and any implementing 

regulations therefrom, including the 

categories of swaps set forth in section 

2(a)(13)(C) of the Act.31 Further, 

proposed § 43.1(b)(2) provided that the 

provisions of part 43 apply to all SEFs, 

DCMs, SDRs and swap counterparties 

(including registered or exempt SDs, 

registered or exempt MSPs and U.S.- 

based end-users). Proposed § 43.1(c) 

specified the rules of construction for 

part 43, and explained that although the 

examples in part 43 and the related 

appendices are not exclusive, 

compliance with an example would 

constitute compliance with such 

portions of the rule to which the 

example relates. 

Forty-six commenters addressed 

various aspects of the scope 

provisions.32 Commenters expressed 

concerns related to swaps between 

affiliates, portfolio compression 

exercises,33 uncleared and bespoke 34

swaps, end-user to end-user swaps, 

foreign exchange swaps, international 

issues, distress scenarios and other 

scope-related issues.35


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36See, e.g., CL–Cleary; CL–FSR; CL–Working 

Group of Commercial Energy Firms; CL–Coalition 

of Energy End-Users; CL–ISDA/SIFMA; CL– 

Japanese Banks; and CL–Coalition for Derivatives 

End-Users. 

37The commenter stated that ‘‘default risk among 

affiliated entities within a corporate group is 

negligible,’’ and ‘‘an inter-affiliate swap does not 

price hedging costs the same as a market-facing 

swap because each inter-affiliate swap is entered 

into on the general assumption that the market risk 

of all transactions within the corporate group will 

be hedged by the centralized hedging affiliate under 

a market-facing transaction.’’ CL–Shell at 6. 

38See CL–TriOptima; CL–WMBAA. 

39See CL–Coalition for Derivatives End-Users. 

40See CL–Working Group of Commercial Energy 

Firms. 

41See CL–Cleary. 

42See CL–GFXD. ‘‘Many millions of trades occur 

daily between different affiliates of the same 

institution which are not relevant to the 

institution’s external market positioning.’’ Id. at p. 

13. 

43As discussed and referenced in this rule, 

internal swaps between one-hundred percent 

owned subsidiaries of the same parent entity may 

include back-to-back swap transactions between or 

among such wholly-owned subsidiaries to help 

manage the risks associated with a market-facing 

swap transaction. In general, a back-to-back swap 

transaction effectively transfers the risks associated 

with a market-facing swap transaction to an affiliate 

that was not an original party to such transaction. 

Back-to-back swap transactions may occur in a 

number of different ways. For example, an affiliate 

immediately may enter into a mirror swap 

transaction with its affiliate on the same terms as 

the marketing-facing swap transaction. By way of 

further example, a market-facing affiliate may enter 

into multiple transactions with affiliates that are not 

at arm’s-length in order to transfer the risks 

associated with an arm’s-length, market-facing 

transaction. 

44Section 608 of the Dodd-Frank Act adds to 

paragraph 7 of the definition of ‘‘covered 

transaction’’ in Section 23A of the Federal Reserve 

Act (12 U.S.C. 371(c)): ‘‘(G) a derivative transaction, 

as defined in paragraph (3) of section 5200(b) of the 

Revised Statutes of the United States (12 U.S.C. 

84(b)), with an affiliate, to the extent that the 

transaction causes a member bank or a subsidiary 

to have credit exposure to the affiliate.’’ Hence, all 

derivatives transactions will be subjected to Section 

23A of the Federal Reserve Act to the extent that 

they cause the bank to have credit exposure to the 

affiliate. Section 23B of the Federal Reserve Act 

contains an arm’s-length requirement stating that a 

member bank and its subsidiaries may engage in 

any covered transaction with an affiliate only ‘‘(A) 

on terms and under circumstances, including credit 

standards, that are substantially the same, or at least 

as favorable to such bank or its subsidiary, as those 

prevailing at the time for comparable transactions 

with or involving other nonaffiliated companies, or 

(B) in the absence of comparable transactions, on 

terms and under circumstances, including credit 

standards, that in good faith would be offered to, 

or would apply to, nonaffiliated companies.’’ The 

Commission considers any covered transaction 

between affiliates as described in Sections 23A and 

23B of the Federal Reserve Act to be publicly 

reportable swap transactions. 

45 In its proposed part 23 release relating to 

‘‘Confirmation, Portfolio Reconciliation, and 

Portfolio Compression Requirements for Swap 

Dealers and Major Swap Participants,’’ portfolio 

compression is defined as ‘‘a mechanism whereby 

substantially similar transactions among two or 

more counterparties are terminated and replaced 

with a smaller number of transactions of decreased 

notional value in an effort to reduce the risk, cost, 

and inefficiency of maintaining unnecessary 

transactions on the counterparties’ books.’’ 75 FR 

81532. 

46See CL–TriOptima; CL–Shell. 

47The commenter recommended that the 

Commission utilize a process to identify swaps that 

perform a ‘‘significant price discovery’’ function. 

See CL–Dominion. 

48See CL–TriOptima. 

2. Swaps Between Affiliates and 

Portfolio Compression Exercises 

Several commenters questioned 

whether swaps between affiliates should 

be subject to the real-time public 

reporting requirements of part 43. Some 

commenters stated that swaps between 

affiliates have no price discovery or 

transparency value and thus should not 

be publicly reported.36 One commenter 

noted that the real time dissemination of 

anonymous data regarding swaps 

between affiliates that price credit and 

market risk at or near zero might distort 

price discovery, rather than enhance 

it.37 Other commenters stated variously 

that inter-affiliate trades and portfolio 

management exercises should not be 

considered ‘‘reportable transactions,’’ 38

and that reporting swaps between 

affiliates will add reporting 

requirements to end-users.39 A 

commenter noted the reporting of data 

on physical gas and power transactions 

between affiliates is excluded in other 

contexts.40 Another argued that the 

public reporting of inter-affiliate 

transactions could seriously interfere 

with the internal risk management 

practices of a corporate group, thereby 

prompting market participants to act in 

a way that would prevent the corporate 

group from following through with its 

risk management strategy. This 

commenter suggested that such a result 

could raise the costs to corporate groups 

of managing risk internally, in addition 

to confusing market participants with 

irrelevant information.41

The Commission agrees with the 

comments regarding the public 

dissemination of certain swaps between 

affiliates and portfolio compression 

exercises. The Commission concurs that 

publicly disseminating swap transaction 

and pricing data related to certain swaps 

between affiliates would not enhance 

price discovery, as such swap 

transaction and pricing data would 

already have been publicly 

disseminated in the form of the related 

market-facing swap. This information 

may create an inaccurate appearance of 

market depth. Notably, there is a very 

high volume of swaps between affiliates 

in certain asset classes (e.g., foreign 

exchange).42 To require public 

dissemination of all such transactions 

could be very costly for market 

participants. Where there are no price 

discovery benefits to publicly 

disseminating such transactions, the 

Commission has determined not to 

require the public dissemination of 

these transactions at this time. 

Accordingly, the Commission is 

adopting a definition in § 43.2 for the 

term ‘‘publicly reportable swap 

transaction’’ that does not presently 

require the public dissemination of 

internal swaps.43 Specifically, a 

publicly reportable swap transaction 

means, among other things, any 

executed swap that is an arm’s length 

transaction between two parties that 

results in a corresponding change in the 

market risk position between the two 

parties. As adopted, the definition of a 

publicly reportable swap transaction 

also provides, by way of example, that 

internal transactions to move risk 

between wholly-owned subsidiaries of 

the same parent, without having credit 

exposure to the other party 44 would not 

presently require public dissemination 

because such swaps are not arm’s-length 

transactions. 

Similarly, the Commission agrees that 

portfolio compression exercises should 

not be publicly disseminated at this 

time.45 The purpose of such transactions 

is to mitigate risk between 

counterparties and any new swaps that 

were executed as a result of portfolio 

compression exercises would be a result 

of the compression itself and not an 

arm’s-length transaction between the 

parties.46 As adopted, the definition of 

a publicly reportable swap transaction 

also cites portfolio compression 

exercises as an example that does not 

presently require public dissemination. 

3. Uncleared or Bespoke Swaps 

The Commission received comments 

from various market participants 

relating to the scope of CEA section 

2(a)(13) and proposed part 43, as it 

applies to uncleared and bespoke 

swaps. Some commenters stated that 

only standardized, cleared swaps 

should be real-time reported and 

publicly disseminated. Others urged 

that uncleared trades be treated 

differently than cleared trades and that 

the statute does not require that nonstandardized swaps be real-time 

reported (e.g., customized trades should 

receive a greater time prior to public 

dissemination). 

A commenter argued that only 

uncleared swaps that perform a 

significant price discovery function 

should be publicly disseminated.47

Another commenter argued that bespoke 

trade data has little value and public 

dissemination of such information 

involves complex technical issues.48


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49See CL–FINRA. 

50See CL–IECA; CL–Better Markets. 

51See CL–IPAA; CL–IECA; CL–COPE; CL–PCS 

Nitrogen Fertilizer; CL–Coalition of Energy EndUsers; CL–NFPEEU; CL–API; and Meeting with EEI 

(Feb. 10, 2011). 

52See CL–IPAA. 

53See CL–COPE; CL–Coalition of Energy EndUsers. 

54See CL–Coalition of Energy End-Users; CL– 

NFPEEU. 

55The Commission stated in in the Proposing 

Release that it interprets CEA section 2(a)(13)(C) to 

apply to all swap transactions. The Commission 

agrees with the overall concern expressed by 

commenters regarding the statutory duty to ensure 

confidentiality. CEA sections 2(a)(13)(C)(iii) and 

2(a)(13)(E)(i) emphasize the importance of not 

identifying swap counterparties. As discussed more 

fully below, CEA section 2(a)(13)(C)(iii) explicitly 

directs the Commission to require that real-time 

public reporting of transactions occur in a manner 

that does not disclose a party’s business 

transactions and market position. 

56See CEA section 1(a)(47)(E). 

57See 76 FR 29818, 29835–29837 (May 23, 2011) 

(proposed rulemaking issued jointly by Commission 

and SEC to further define, among others, the term 

‘‘swap’’). 

58See 76 FR 25774 (May 5, 2011). Treasury’s 

proposed determination may also be found at 

http://www.treasury.gov/initiatives/wsr/Documents/ 

FX%20Swaps%20and%20Forwards%20NPD.pdf. 

59See CL–NFPEEU. 

60See the definition of ‘‘publicly reportable swap 

transaction’’ in § 43.2. 

Still another commenter explained that 

the public dissemination of swap 

transaction and pricing data should be 

phased in based on liquidity.49 In 

contrast, two commenters said that the 

real-time reporting requirements should 

apply to all swaps, both standard and 

bespoke.50

Several commenters asserted that 

bespoke or customized swap 

transactions are not subject to real-time 

reporting, citing a perceived absence of 

authority under CEA section 

2(a)(13)(C)(iii) to include these 

transactions. Others commented that 

bespoke transactions should not be 

subjected to real-time public reporting 

obligations because the transactions do 

not enhance price discovery and may 

compromise anonymity of the parties to 

the swap. 

Some commenters focused on 

perceived burdens to end-users inherent 

in the proposed rules; many stated that 

end-users should not be required to 

report swaps.51 Additionally, certain 

commenters stated that end-users do not 

have sufficient technology to report 

swaps; one commenter stated that enduser to end-user swaps should have next 

business day reporting.52 Others 

contended that end-users should be 

treated differently because the public 

dissemination of swaps information 

involving such parties does not enhance 

price discovery.53 Two commenters 

questioned the value of disclosing 

information relating to end-user to enduser power swaps compared to the harm 

that disclosing such information would 

have to these end-users and the public 

in general.54

The Commission interprets CEA 

section 2(a)(13)(C) to grant the 

Commission the authority to require the 

real-time public reporting of all swaps 

in order enhance price discovery.55

Accordingly, the Commission does not 

believe that the transactions described 

above (e.g., bespoke, end-user to enduser, etc.) should be excluded from realtime reporting obligations. Such swap 

transactions, unlike internal swaps 

between affiliates and portfolio 

compression exercises, are executed at 

arm’s length and result in a change in 

market risk between the swap 

counterparties. Thus, the Commission 

believes that the public dissemination of 

these transactions will provide price 

discovery benefits and transparency to 

the swap markets. 

However, the Commission agrees with 

commenters that the real-time public 

dissemination of swap transaction and 

pricing data should be phased in with 

longer initial time delays for public 

dissemination, as well as phased in 

compliance dates, for different asset 

classes and market participants within 

an asset class. Phasing in real-time 

reporting for certain transactions by 

allowing for longer initial time delays 

and phased compliance dates addresses 

concerns regarding bespoke 

transactions, including market liquidity 

and the ability for parties to report 

transactions. In particular, phasing in 

the public dissemination of bespoke 

transactions will allow the Commission 

to ensure that the public dissemination 

of such transactions will protect the 

identities of swap participants, not 

disclose the business transactions and 

market positions of any person involved 

in an uncleared swap and mitigate any 

adverse impact on market liquidity. 

4. Foreign Exchange (‘‘FX’’) Asset Class 

Several commenters sought 

clarification as to which FX swaps will 

be subject to the real-time public 

reporting requirements; some argued 

that FX forwards and swaps should not 

be subject to real-time public reporting 

rules. One commenter argued that the 

universe of FX market participants is 

massive given that FX transactions are 

an integral part of the global payment 

systems, presenting a practical 

challenge to ensuring that all relevant 

reporting participants are able to report. 

To the extent that FX swaps or 

forwards, or both, are excluded from the 

definition of ‘‘swap’’ pursuant to a 

determination by United States 

Department of the Treasury 

(‘‘Treasury’’), the requirements of CEA 

section 2(a)(13) would not apply to 

those transactions, and such 

transactions shall not be subject to the 

real-time public reporting requirements 

of part 43. Treasury issued a proposed 

determination on April 29, 2011, in 

which it stated that FX swaps and 

forwards that would be excluded from 

the definition of ‘‘swap,’’ and thereby 

exempt from certain requirements 

established in the Dodd-Frank Act, 

including registration and clearing. 

However, the CEA provides that, even if 

Treasury determines that FX swaps and 

forwards may be excluded from the 

definition of ‘‘swap,’’ these transactions 

are not excluded from regulatory 

reporting requirements to an SDR.56

Nonetheless, such transactions would 

not be subject to the real-time reporting 

requirements under part 43. Treasury 

has proposed to act pursuant to the 

authority in Section 721 of the DoddFrank Act that permits a determination 

that certain FX swaps and forwards 

should not be regulated as swaps and 

are not structured to evade the DoddFrank Act. The Commission has noted 

that, as proposed, Treasury’s 

determination would exclude FX swaps 

and forwards, as defined in CEA section 

1a, but would not apply to FX options 

or non-deliverable forwards (‘‘NDFs’’).57

FX instruments that are not covered by 

Treasury’s final determination would 

still be subject to the real-time public 

reporting rules described in part 43.58

Section 43.1 as adopted does not 

distinguish between transactions within 

the FX asset class; such a decision to 

exclude FX forwards and swaps will be 

determined by Treasury pursuant to 

CEA section 1(a)(47). 

5. Limitations and Special 

Accommodations 

Several scope-related comments 

focused on very specific issues. Some 

commenters argued that novations 

should not be publicly reportable swap 

transactions. Another commenter 

asserted that the Commission has no 

statutory basis for requiring that postswap events (e.g., novations, 

amendments, terminations, etc.) be 

subject to part 43. This commenter 

stated that real-time reporting should be 

limited to trade execution and that 

lifecycle events should not be 

reported.59

The Commission agrees that to the 

extent that novations or other lifecycle 

events do not change the pricing of an 

initial execution of the swap they would 

not be considered publicly reportable 

swap transactions and therefore would 

not be publicly disseminated.60 As two 


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61See CL–Barclays; CL–Working Group of 

Commercial Energy Firms. 

62See CL–Members of Congress; CL–MS. 

Additionally, one commenter suggested less 

frequent reporting for illiquid parts of the market. 

CL–Chesapeake. 

63See CL–NFPEEU. 

64See CL–Barclays; CL–LCH.Clearnet. 

65See, e.g., CL–Chesapeake; CL–Dominion; CL– 

MS; CL–ATA and Meeting with Barclays (January 

24, 2011). 

66The Commission believes that it has achieved 

the appropriate balance between transparency and 

liquidity. However, the Commission recognizes that 

certain market participants may disagree with the 

Commission and choose not to enter into certain 

types of swaps. The Commission believes that 

increased price transparency will attract additional 

liquidity providers based on confidence that their 

competitive pricing will better attract business. 

67See CL–Reval. 

commenters pointed out, the reporting 

of a novation that is just a change in 

ownership could lead to duplication in 

reporting and misrepresentative prices 

in the market.61 As discussed more fully 

below, in the case of novations where 

there is no change in the pricing, the 

novations would not be publicly 

reportable swap transactions pursuant 

to § 43.2. 

The Commission recognizes that there 

are certain swap contract amendments 

or other transactions that could enhance 

price discovery. Those transactions that 

have a price impact should be subject to 

the real-time reporting rules of part 43. 

If price-changing lifecycle events were 

not required to be publicly 

disseminated, swap counterparties 

could enter into a swap at one price and 

then immediately enter into an 

amendment to change a material term of 

the swap. The Commission is clarifying 

the definition of ‘‘publicly reportable 

swap transaction’’ to ensure that only 

those lifecycle or continuation events 

that have a price-changing impact 

should be publicly disseminated. 

Requiring such price-forming 

continuation data to be publicly 

disseminated eliminates the incentive 

for swap counterparties to enter into a 

swap followed by an amendment in 

order to disguise the price of a swap. 

Commenters stated that illiquid 

markets should not be subject to realtime reporting.62 The Commission 

believes that, consistent with CEA 

section 2(a)(13), such swaps generally 

are subject to the public dissemination 

requirements of part 43. Certain 

accommodations, however, have been 

made for such swaps in part 43, 

including longer initial time delays for 

public dissemination in final § 43.5. 

One commenter stated that power 

markets should not be subject to realtime reporting.63 The Commission 

acknowledges this commenter’s 

concern; swaps in the power market are 

priced in reference to specific locations 

and thus present issues regarding the 

protection of the identities of the 

counterparties. To the extent that these 

are off-facility swaps, the Commission 

intends to propose to describe the form 

and manner for their reporting in its 

block trade re-proposal. As discussed 

more fully below, until such standards 

are adopted, such off-facility swaps 

would not be subject to the real-time 

public reporting requirements of part 

43. 

A few commenters argued that 

physical forwards should be expressly 

excluded from the real-time reporting 

requirements. Others contended that 

various types of swaps—including total 

return swaps, stand-alone options and 

structured transactions—should not be 

subject to the real-time reporting 

requirements of part 43 or should be 

given special accommodations. To the 

extent that any of these types of swaps 

are excluded from the definition of 

‘‘swap,’’ such transactions are not 

subject to the real-time reporting 

requirements. Accordingly, the 

Commission does not intend to provide 

any specific exemption from part 43 at 

this time. 

The Commission received two 

comments regarding special 

accommodations for real-time public 

reporting in distress scenarios and DCO 

default scenarios.64 One commenter 

stated that special accommodations 

should be made for distress scenarios; 

the other stated that swaps in 

connection with a DCO’s default 

management should not be reported. 

This commenter also provided language 

to address this situation in the final 

rule. 

The Commission agrees that, 

depending on the circumstances, default 

and distress scenarios may warrant 

different reporting requirements. The 

Commission believes that distress and 

DCO default scenarios may be situations 

in which the Commission may exercise 

its authority to temporarily suspend 

real-time public reporting obligations 

under part 43. The Commission may 

address such emergency authority in a 

future Commission rulemaking. The 

Commission does not accept the 

recommendation that real-time 

reporting obligations be suspended 

automatically upon the occurrence of a 

distress scenario; in its view any 

suspension or delay of reporting should 

occur only upon a Commission 

determination. Further, the Commission 

believes that time delays described in 

§ 43.5 will address some of the concerns 

expressed in these comments. 

6. Liquidity 

Some commenters asserted that realtime public reporting could cause a 

reduction of liquidity, particularly in 

already illiquid markets.65 The 

Commission believes that the 

availability of previously-inaccessible 

swap pricing data in close to real-time 

will increase the competition among 

potential swap counterparties regarding 

the pricing of such swaps, and that such 

increased competition will be a central 

benefit of the real-time reporting rules. 

The enhanced transparency and 

reliability of transactional data provided 

by the real-time dissemination of swap 

transaction data can be expected to 

promote confidence in the fairness and 

integrity of swaps markets. Thus, the 

Commission anticipates that while a 

trade-off between liquidity and 

transparency may manifest itself in the 

beginning of the implementation period, 

the increased transparency ultimately 

should increase participation in the 

swaps markets.66

Another key benefit of real-time 

reporting of previously unavailable 

swap transaction and pricing data is 

enhanced price discovery. Broader 

access to information will be of 

particular value to buy-side participants 

and end-users. As one commenter 

noted, the ability to observe information 

about recent transactions and to seek 

customized trades offers potential 

benefits to end-users.67 In this regard, 

the Commission disagrees with 

commenters who opined that 

transaction data about bespoke, bilateral 

swaps provides no price discovery 

information. On the contrary, such 

information helps to complete the 

picture of the swap market for all 

market participants, and would likely 

inform traders seeking to transact 

economically similar—although not 

identical—swaps. 

As SDs and MSPs adapt to the realtime public reporting of swap 

transaction data, the Commission 

anticipates that these market 

participants, who typically are large and 

technologically sophisticated, will 

compete on price to attract end-users 

and other typically smaller, lesssophisticated market participants as 

swap counterparties. The Commission 

believes that its phase in approach to 

dissemination delays provided in § 43.5 

of this rule will allow market 

participants time to adapt to the new 

procedures. 

7. International Issues 

The Commission received several 

comments addressing international 


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68See CL–ISDA/SIFMA; CL–GFXD; CL–Foreign 

Headquartered Banks; and CL–Working Group of 

Commercial Energy Firms. 

69See CL–ISDA/SIFMA; CL–Commodity Markets 

Council; CL–Foreign Headquartered Banks; CL– 

WFE/IOMA; CL–Tradeweb; CL–SIFMA AMG; and 

CL–Soc Gen. 

70See CL–ISDA/SIFMA. 

71See CL–Vanguard; CL–MarkitSERV; CL–SIFMA 

AMG; CL–ICI; CL–ISDA/SIFMA; CL–BlackRock; 

and CL–DTCC. 

72See CL–MarkitSERV; CL–AFGI; and CFTC/SEC 

Public Roundtable on International Issues Relating 

to Dodd-Frank (Aug. 1, 2011). Public Roundtable 

comments can be found at http:// 

comments.cftc.gov/publiccomments/ 

commentlist.aspx?id=1065. 

73As proposed, § 43.1(b) established the scope of 

part 43. Proposed § 43.1(b)(2) provides that the part 

43 rules apply to all SEFs, DCMs, SDRs, as well as 

parties to a swap including registered SDs, 

registered MSPs and U.S.-based end-users. 

74See CL–ISDA/SIFMA; CL–GFXD. 

75 It should be noted that the 2004 version of 

Markets in Financial Instruments’ Directive 

(‘‘MiFID’’) contained language for equities that 

‘‘Member States shall, at least, require regulated 

markets to make public the price, volume and time 

of the transactions executed in respect of shares 

admitted to trading. Member States shall require 

details of all such transactions to be made public, 

on a reasonable commercial basis and as close to 

real-time as possible.’’ The European Commission 

published its MiFID and Markets in Financial 

Instruments Regulation (‘‘MiFIR’’) on October 20, 

2011. The European Commission’s legislative 

proposals require that regulated markets, 

multilateral trading facilities (‘‘MTFs’’) and 

organized trading facilities (‘‘OTFs’’) shall make 

public the price, volume and time of transaction 

executed for all derivatives admitted to trading or 

which are traded on an MTF or an OTF. These 

organized trading venues shall make this 

transaction data public as close to real-time as is 

technically possible. Investment firms that make 

public trades outside of trading venues must make 

those trades available through Approved 

Publication Arrangements which are regulated by 

MiFID. 

76 In addition, the Commission met with 

European industry representatives, including Credit 

Suisse, Deutsche Bank, Citi, J.P. Morgan, Barclays, 

Goldman Sachs and UBS (Mar. 22, 2011). 

77See CL–GFXD; CL–ISDA/SIFMA; and CL– 

Vanguard. 

concerns as they relate to the scope of 

the Proposing Release. Four commenters 

stated that the Commission should 

explicitly require that only data relating 

to swap transactions involving at least 

one U.S.-person must be reported and 

publicly disseminated.68 Seven 

comments urged that the Commission 

consult with foreign regulators before 

establishing extraterritoriality scope; 69

one comment stated that jurisdictional 

boundaries should be defined 70 and 

seven comments stated that any SD or 

MSP in a swap should be the reporting 

party regardless of whether it is a U.S. 

person.71 Additionally, the Public 

Roundtable on Dodd-Frank 

Implementation produced comments 

regarding the need for the CFTC and 

SEC to harmonize their reporting 

requirements with international 

regulators.72

Two commenters questioned whether 

the Commission has the legal authority 

to implement proposed § 43.1(b)(2) with 

respect to non-U.S. parties 73 and 

suggested the Commission reach 

agreements with foreign regulators 

before requiring that all transactions 

with any U.S. person be subject to the 

requirements in part 43.74

The Commission recognizes the 

benefits of consultation with 

international regulators in developing 

the real-time public reporting rules set 

forth in part 43 of the Commission’s 

regulations. To that end, Commission 

staff has had discussions with a number 

of international regulators, including the 

UK FSA, AEuropean Commission 

(‘‘EC’’),75 European Parliament 

Rapporteur for the Regulation on OTC 

Derivatives, Central Counterparties and 

Trade Repositories, European Securities 

and Markets Authority (‘‘ESMA’’), 

Canadian Provincial Regulators and 

Japan FSA.76 Commission staff 

continues to discuss with international 

regulators issues related to 

extraterritoriality. 

Several commenters stated that an SD 

or MSP should be the reporting party 

regardless of whether it is a U.S. person. 

The Commission generally agrees that if 

a registered SD or MSP is a party to a 

publicly reportable swap transaction, it 

should be the reporting party, to the 

extent that such transaction is subject to 

real-time reporting. The Commission 

understands the need for flexibility 

where one party to a swap is a U.S. 

counterparty and the other is a foreign 

counterparty. Accordingly, as discussed 

in greater detail below, the Commission 

is adopting language in § 43.3(a)(3) that 

allows parties to a publicly reportable 

swap transaction involving an offfacility swap to mutually agree on the 

reporting party for such transaction; 

such agreement would be a term of the 

swap. 

8. Final Rule Text of § 43.1 

After consideration of comments 

relating to the purpose, scope and rules 

of construction in proposed § 43.1, the 

Commission is adopting § 43.1 

substantially as proposed, with some 

clarifying changes responsive to 

commenters’ concerns relating to the 

extraterritorial scope of part 43. 

Additionally, as discussed below, the 

Commission is adopting other 

provisions, including a revised 

definition of ‘‘publicly reportable swap 

transaction’’ that responds to many 

commenters’ concerns. 

The Commission is adopting § 43.1(a) 

as proposed, with technical and 

clarifying changes including (i) 

changing the words ‘‘set forth’’ to 

‘‘implements;’’ (ii) changing the word 

‘‘collection’’ to ‘‘reporting;’’ and (iii) the 

addition of a reference to the DoddFrank Act. The Commission is adopting 

§ 43.1(b) with technical and clarifying 

changes relating to numbering and word 

changes as well as with a change to the 

last sentence. The last sentence of 

§ 43.1(b), as adopted, states that ‘‘[t]his 

part shall apply to registered entities as 

defined in the Act, as well as to parties 

to a swap including SDs, MSPs and 

U.S.-based market participants in a 

manner as the Commission may 

determine.’’ The change to the last 

sentence of § 43.1(b) deletes the 

references to ‘‘registered or exempt’’ 

when referring to SDs and adds the 

clause ‘‘in a manner as the Commission 

may determine’’ as compared to 

proposed § 43.1(b). Finally, § 43.1(c) is 

being adopted with two clarifying 

changes: ‘‘constitute’’ is changed to 

‘‘shall constitute;’’ and ‘‘such’’ is 

changed to ‘‘the particular.’’ 

B. Section 43.2—Definitions 

As proposed, § 43.2 specified 

definitions for a number of terms and 

concepts related to real-time public 

reporting of swap transaction and 

pricing data. In response, the 

Commission received comments from 

20 interested parties, including industry 

associations representing myriad 

financial market participants, potential 

SDs, an asset manager, potential SDRs 

and a DCM. In addition to comments on 

the definitions proposed in § 43.2, 

commenters addressed terms not 

defined in proposed § 43.2, such as 

‘‘illiquid market.’’ 

1. Harmonization 

A number of commenters suggested 

that the Commission and the SEC 

harmonize the use of the defined terms 

in proposed § 43.2 in order to foster 

operational efficiency, lessen the 

incidence of errors and place fewer 

burdens on reporting agencies.77 The 

Commission agrees that harmonization 

of certain terms is desirable and the two 

agencies have coordinated their 

responses to the Dodd-Frank Act as 

closely as possible. The Commission 

notes that the two agencies have 

jurisdiction over different types of 

swaps which necessitates some 

differences in terminology. The 

Commission believes therefore that any 

differences between the two 

commissions with respect to defined 

terms are justified and necessary to 

accomplish the purposes of the Act. 


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78Proposed § 43.2 used subparagraph lettering for 

the definitions; however, the Commission has 

removed the subparagraph lettering from final 

§ 43.2 to enable the addition of defined terms as 

rules relating to block trades and large notional offfacility swaps are promulgated, without 

necessitating a renumbering with § 43.2. 

79No comments were received in connection with 

the proposed definition for ‘‘Act.’’ 

80See CL–ISDA/SIFMA. As discussed below, this 

comment was broadly applied to terms such as 

‘‘execution’’ and ‘‘confirmation.’’ 

81See Communication with Darrell Duffie (Dec. 

15, 2010). 

82See supra note 18. 

83Proposed part 1 of the Commission’s 

regulations provides that all transactions that are 

willfully structured to evade the requirements of 

the Dodd-Frank Act will be treated as swaps. See 

76 FR 29818 at 29865–66 (May 23, 2011). The rule 

has not yet been adopted. 

84No comments were received in connection with 

the language of the proposed definition for 

‘‘appropriate minimum block size.’’ 

85See CL–Chris Barnard. 

86See CL–Working Group of Commercial Energy 

Firms. 

87See CL–Coalition for Derivatives End-Users. 

88 Id. 

89See CL–Better Markets; CL–Markit; and CL– 

Coalition for Derivatives End-Users. 

90See CL–Better Markets. 

91See CL–Coalition for Derivatives End-users. 

92See CL–DTCC. 

2. Defined Terms 

Section 43.2 contains the definitions 

for terms and concepts throughout part 

43 and its related appendices.78 The 

specific terms defined in § 43.2 are 

discussed below. 

Act—Proposed § 43.2(a) 

The Commission is adopting the 

definition as proposed with a clarifying 

citation to the United States Code.79

Affirmation—Proposed § 43.2(b) 

A commenter suggested that the use 

of terms like ‘‘affirmation’’ should 

reflect long-standing market 

conventions that differ according to the 

type of underlying reference asset.80

Another commenter pointed to a 

perceived loophole in the Commission’s 

proposed definition that would allow 

for the avoidance of block trade 

reporting by agreeing on swap terms at 

one point in time and affirming terms of 

trade details later.81 The Commission 

believes that the definition as proposed 

provided adequate clarity to permit 

flexibility for different market 

participants, asset classes and methods 

of execution. The Commission is not 

persuaded by the argument that the 

proposed definition contains a loophole 

that would allow for the avoidance of 

block trade reporting. The Commission 

believes that the business conduct and 

straight-through processing rules 

proposed in part 23 of its regulations,82

in addition to anti-evasion requirements 

(proposed to be included in part 1 of its 

regulations), should provide adequate 

oversight rules.83

Comments emphasizing the need for 

harmonization between the CFTC and 

the SEC focused in part on the 

definition of ‘‘affirmation.’’ The SEC’s 

proposed Regulation SBSR does not 

include the concept of ‘‘affirmation’’; 

however, the Commission believes that 

this difference is not material. 

For the reasons discussed above, the 

Commission believes that the proposed 

definition of ‘‘affirmation’’ provides 

adequate clarity for different market 

participants, asset classes and methods 

of execution. Accordingly, the 

Commission is adopting the definition 

as proposed. 

Appropriate Minimum Block Size— 

Proposed § 43.2(c) 

The Commission is adopting the 

definition of ‘‘appropriate minimum 

block size’’ with a few modifications. As 

discussed below, since the definition of 

‘‘swap instrument’’ is not being adopted 

in these final rules, the reference to that 

definition is removed.84 The statement 

in the proposed definition regarding the 

calculation of appropriate minimum 

block sizes has been removed since 

those proposed rules are being 

reconsidered at this time. 

As Soon as Technologically 

Practicable—Proposed § 43.2(d) 

Proposed § 43.2(d) defined the term 

‘‘as soon as technologically practicable’’ 

as ‘‘as soon as possible, taking into 

consideration the prevalence of 

technology, implementation and use of 

technology by comparable market 

participants.’’ The Commission 

anticipated that this term could have 

different interpretations for different 

swap counterparties (i.e., SDs, MSPs 

and end-users), for different types of 

swaps (e.g., energy swaps, credit default 

swaps, interest rate swaps, etc.) and for 

different methods of execution (i.e., 

SEFs, DCMs and off-facility swaps). 

The Commission received twelve 

comments from various interested 

parties, including trading platforms, 

industry groups/associations and a data 

vendor. One commenter 85 stated that 

while the SEC’s proposed definition of 

‘‘real time’’ more easily replicates 

current market practice than ‘‘as soon as 

technologically practicable,’’ the CFTC 

and SEC should propose one consistent 

definition of real-time reporting for their 

respective rules. 

While the comments generally 

support the flexibility of the definition, 

some commenters requested further 

clarification. One commenter, for 

example, requested that the Commission 

distinguish between SDs that are banks 

and those that are non-banks.86 Another 

commenter requested clarification 

whether ‘‘as soon as technologically 

practicable’’ would mean the same thing 

for swaps executed on or pursuant to 

the rules of a SEF or DCM as for swaps 

under CEA section 2(h)(7).87

Some commenters suggested that the 

Commission refrain from establishing 

maximum reporting time frames, except 

for large SDs and MSPs or, at a 

minimum, either adopt longer time 

frames for reporting for market 

participants that are not SDs or MSPs, 

or allow custom and market practice to 

eventually define the time period that is 

a responsible interpretation of 

‘‘technologically practicable.’’ 88 Other 

commenters addressed the concept of 

backstops for real-time reporting for 

non-block trades.89 One stated that there 

must be a maximum time limit of no 

longer than five minutes,90 while 

another said that maximum reporting 

timeframes should be given only for SDs 

and MSPs (or at a minimum reporting 

timeframes should be longer for endusers).91 Another commenter contended 

that real-time reporting should occur 

after confirmation to reduce errors and 

omissions and since the confirmation 

process is what drives the booking of a 

trade into a firm’s trade capture 

system.92

The Commission acknowledges that 

SDs and MSPs are more likely to have 

the infrastructure and resources 

available to report their swap 

transaction and pricing data to an SDR 

faster than other categories of market 

participants (i.e., financial and nonfinancial end-users). However, the 

Commission believes it would be 

premature to establish maximum 

timeframes at this time without 

information on the manner and 

frequency in which these swaps are 

executed or a clear understanding of the 

technological capabilities of reporting 

parties. Declining to establish backstops 

is a less prescriptive approach that takes 

into account the different technological 

capabilities of different markets and 

market participants. The Commission 

can analyze timestamp data, which is 

not currently available, to determine 

whether reporting parties are reporting 

‘‘as soon as technologically practicable.’’ 

In response to comments requesting 

further clarification of the definition, 

the Commission believes that the 

proposed definition provided adequate 

flexibility for different market 

participants, asset classes and methods 

of execution. If the definition of ‘‘as 


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93The Commission notes that real-time swap 

transaction and pricing data must be reported ‘‘as 

soon as technologically practicable’’ after 

‘‘execution’’ which is linked to the ‘‘affirmation’’ of 

the swap. ‘‘Confirmation’’ of the swap may occur 

at a point after the affirmation and execution, or at 

the same time (e.g., SEF or DCM execution of a 

swap). 

94See CL–DTCC. 

95See CL–ISDA/SIFMA. 

96See CL–GFXD. 

97The terms ‘‘T+1’’ and ‘‘T+2’’ refer to the 

transaction date plus one day or two days, 

respectively. 

98See CL–GFXD. 

99 Id. 

100See CL–Vanguard. 

101See § 49.10(b). See also 76 FR 54538, 54579 

(Sep. 1, 2011). Part 49 establishes the registration 

and compliance requirements for SDRs. See also 

§ 43.3(c)(2). 

102Accordingly, appendix A to part 43 provides 

a data field for public dissemination entitled ‘‘subasset class for other commodity.’’ 

103See CL–GFXD. 

104This characterization is based on the attributes 

of currency swaps that resemble the structure and 

operation exhibited by interest rate swaps while in 

‘‘foreign exchange’’ swaps, the underlying 

currencies are exchanged by the parties. 

soon as technologically practicable’’ 

were more rigid (e.g., setting forth 

maximum reporting times) the costs to 

less sophisticated reporting parties 

could be greater, particularly in the 

initial phases of the rule.93

With respect to comments regarding 

backstops, the Commission believes that 

there could be potentially significant 

costs to certain market participants— 

particularly end-users—in complying 

with a backstop. For this reason as well, 

the Commission has determined to 

retain the flexibility of the definition by 

excluding backstops. While the SEC’s 

proposed Regulation SBSR provided a 

15-minute backstop, it is important to 

note that the markets overseen by the 

SEC have significantly fewer end-users 

participating in the credit and equities 

markets than the markets under the 

Commission’s authority. The 

Commission believes this distinction 

justifies the difference in approach 

between the agencies. 

For the reasons discussed above, the 

Commission has retained a less 

prescriptive definition of ‘‘as soon as 

technologically practicable’’ in order to 

provide adequate flexibility for different 

market participants, asset classes and 

methods of execution, particularly when 

weighed against the potential costs to 

market participants to comply with 

more rigid timeframes. Accordingly, the 

Commission is adopting the definition 

as proposed. 

Asset Class—Proposed § 43.2(e) 

Proposed § 43.2(e) provided that the 

asset classes include five major 

categories: Interest rate, currency, credit, 

equity and ‘‘other commodity,’’ as well 

as any other asset class that may be 

determined by the Commission. 

Commenters offered various views with 

respect to categorizing the asset classes. 

One commenter recommended that 

relatively few defined asset classes 

would create increased aggregation of 

services and reduce the risks of 

duplication or omission in public 

dissemination or erroneous 

consolidation by the public of available 

data, while also reducing the burden on 

market participants to connect and 

reconcile among multiple SDRs.94 ISDA 

and SIFMA jointly opined that 

providing sub-asset classes for ‘‘other 

commodity’’ would be advisable for 

reporting requirements.95

One commenter expressed concern 

with respect to the definition, treatment 

and reporting of an FX forward under 

the Proposing Release.96 This 

commenter requested clarification that 

spot transactions with value dates less 

than or equal to T+2 97 are excluded 

from the definition and further 

requested clarification with respect to 

the reporting obligations on those FX 

products that may be excluded by 

Treasury. Commenters also requested 

further clarification in defining an ‘‘FX 

swap’’ and ‘‘cross currency swap.’’ 

These commenters distinguished 

between a cross currency swap (an 

interest rate product with multipayment schedules, traded by interest 

rate desks with interest rate market 

participants) and an FX swap (‘‘FX 

products traded by distinct FX desks 

with different market participants using 

different internal and external systems 

infrastructure’’).98 In the commenters’ 

opinion, cross-currency swaps should 

be reported in the interest rate asset 

class, while FX swaps should be 

reported in a separate FX asset class. 

One commenter suggested that, with 

respect to FX instruments, market 

conventions are needed to determine 

whether (i) both legs of the transaction 

are reported by a single counterparty; or 

(ii) whether the transaction is instead 

reported separately as two legs by two 

counterparties with two separate trade 

identifications. Additionally, the 

commenter suggested that an FX subclassification system should be 

categorized by an industry association 

sufficiently familiar with the FX 

market.99

One commenter recommended that 

the definition of ‘‘asset class’’ be 

harmonized with the SEC’s definition to 

facilitate ease of tracking by market 

participants.100 The Commission 

believes that references to the credit and 

equity asset classes should, to the extent 

possible, be defined consistently 

between the two agencies, but notes that 

the SEC will not be regulating products 

in asset classes other than credit and 

equity. Because the Commission is best 

situated to define the asset classes 

within its jurisdiction, it believes that 

any differences between the CFTC and 

the SEC with respect to the definition of 

‘‘asset class’’ have their origins in 

different statutory and regulatory 

schemes and are justified and necessary. 

The Commission is persuaded by the 

suggestions regarding the subdivision of 

asset classes and agrees that fewer asset 

classes will decrease fragmentation of 

data and reduce the burden of market 

participants to reconcile among 

multiple SDRs. Additionally, since an 

SDR that accepts swap transaction and 

pricing data for a swap within an asset 

class must accept data for all swaps in 

that asset class, market participants will 

more likely be able to report data for 

both real-time and regulatory reporting 

purposes.101 The Commission also 

agrees that there is merit to providing a 

sub-class for the ‘‘other commodity’’ 

asset class. The ‘‘other commodity’’ 

asset class may be broken down into 

sub-asset classes for purposes of public 

dissemination;102 however, the ‘‘other 

commodity’’ asset class remains an asset 

class that includes energy, metals, 

precious metals, agricultural 

commodities, weather, property and 

other commodities. 

Finally, the Commission agrees that 

clarification and additional guidance is 

needed to address FX products.103

Specifically, the Commission has 

determined to include cross-currency 

swaps in the interest rate asset class and 

FX options, swaps and forwards will be 

included in an FX asset class. Therefore, 

the Commission has modified the 

definition to better reflect the fact that 

the industry typically characterizes 

‘‘currency’’ swaps as ‘‘interest rate 

swaps.’’ 104 Accordingly, the 

Commission is replacing the term 

‘‘currency’’ in the definition of asset 

class with ‘‘foreign exchange’’ in § 43.2 

to accurately reflect the asset classes 

employed by the swaps market. 

As discussed above, to the extent that 

FX swaps or forwards, or both, are 

excluded from the definition of ‘‘swap’’ 

pursuant to a determination by 

Treasury, the requirements of CEA 

section 2(a)(13) would not apply to 

those transactions, and such 

transactions shall not be subject to the 

real-time reporting requirements of part 

43. Under Treasury’s proposed 

determination, while FX swaps and 

forwards would be excluded from the 


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105See 76 FR 25774 at 25776. ‘‘[U]nlike most 

derivatives, foreign exchange swaps and forwards 

have fixed payment obligations, are physically 

settled, and are predominantly short-term 

instruments.’’ 

106The terms ‘‘commodity’’ and ‘‘excluded 

commodity’’ as used in the definition of ‘‘asset 

class’’ are defined in CEA sections 1a(9) and 1a(19) 

respectively. 

107The Commission received no comments 

addressing its proposed definition of ‘‘block trade.’’ 

108See CL–ABC/CIEBA. See supra note 80. 

109 Id. 

110The Schedule provides an opportunity for 

parties to a swap to negotiate terms of or add terms 

to the pre-printed ISDA Master Agreement. 

Paragraph 13 provides an opportunity for parties to 

a swap to negotiate the terms of or add terms to the 

Credit Support Annex (New York Agreement) for 

the OTC swap transaction. 

111See CL–ISDA/SIFMA. This suggestion is part 

of a broader comment recommending that defined 

terms should follow market conventions. 

112See CL–GFXD. 

113See CL–ABC/CIEBA. 

real-time reporting requirements of part 

43, FX options and NDFs would not be 

excluded and would be subject to part 

43’s real-time reporting requirements.105

The Commission has determined to 

clarify the definition of ‘‘asset class’’ by 

changing the asset class from 

‘‘currency’’ to ‘‘foreign exchange.’’ In 

addition, such change would place 

‘‘cross-currency swaps’’ in the ‘‘interest 

rate’’ asset class. Finally, the 

Commission is making technical 

changes to the definition of ‘‘asset 

class.’’ For example, ‘‘the broad category 

of goods, services or commodities’’ is 

changed to ‘‘a broad category of 

commodities, including, without 

limitation, any ‘excluded commodity’ as 

defined in Section 1a(19) of the Act, 

with common characteristics underlying 

a swap.’’ 106

Block Trade—Proposed § 43.2(f) 

The Commission has determined to 

modify the proposed definition of 

‘‘block trade’’ by making certain 

technical and conforming changes in 

light of other definitional changes and 

terminology usage throughout part 

43.107 The Commission clarified that a 

block trade involves a swap that is 

‘‘listed on a SEF or DCM’’ and therefore 

deleted the phrase ‘‘made available for 

trading.’’ Such change ensures that 

block trades may be executed with 

respect to any listed contract. 

Additionally, the Commission clarified 

certain aspects of the definition, 

including changing the word ‘‘off’’ to 

‘‘away from’’ to indicate that a block 

trade is executed away from the trading 

system or platform. The other revisions 

to the ‘‘block trade’’ definition provide 

clarification and reflect consistency 

with other changes to the final rule. As 

previously discussed, this rulemaking 

does not address issues related to the 

determination of appropriate minimum 

block sizes. 

Business Day 

The Commission has determined to 

add ‘‘business day’’ as a defined term to 

address the final time delay provisions 

in § 43.5. The Commission defined the 

term ‘‘business day’’ in § 43.2 as 

follows: ‘‘Business day means the 

twenty-four hour day, on all days except 

Saturdays, Sundays and legal holidays 

in the location of the reporting party or 

registered entity reporting data for the 

swap.’’ 

The Commission believes that 

defining business day as twenty-four 

hours is necessary given the global 

nature of the swaps market. The 

determination of the business day will 

be based on the time zone of the 

location of the reporting party, SEF or 

DCM. For example, if the reporting 

party is an SD located in London who 

enters into a swap with a U.S.-based 

entity, London time would be used to 

determine the business day. 

Business Hours 

The Commission did not receive 

comments suggesting a definition of 

‘‘business hour;’’ however, it believes 

that the addition of such defined term 

is necessary to provide clarity with 

respect to the real-time reporting 

provisions in final § 43.5. The term 

‘‘business hours’’ is defined in § 43.2 as 

follows: ‘‘Business hours means the 

consecutive hours of one or more 

consecutive business days.’’ 

Since ‘‘business day’’ is defined as the 

twenty-four hour day, ‘‘business hours’’ 

are consecutive hours during and across 

‘‘business days.’’ For example if a 

publicly reportable swap transaction has 

a time delay of 24 business hours and 

it is executed at 6 a.m. EST on Friday, 

then such swap would be publicly 

disseminated at 6 a.m. EST on Monday, 

assuming that weekend days are not 

business days in the locale of the 

reporting party. 

Confirmation—Proposed § 43.2(g) 

One commenter stated that the 

definition of confirmation was 

appropriately broad.108 With respect to 

the proposed requirement that a 

confirmation would legally supersede 

any previous agreement (electronic or 

otherwise), this commenter requested 

clarification or confirmation that this 

provision does not mean that a 

confirmation supersedes terms in the 

package of documentation that make up 

the ‘‘agreement,’’ unless the parties 

themselves so agree.109 The commenter 

stated that this clarification is necessary 

because some fiduciaries of plans 

ensure that the terms of a swap are the 

best terms available from the 

perspective and interests of plan 

participants by having the lead fiduciary 

centralize the negotiation of the terms of 

the Schedule and Paragraph 13 of the 

ISDA Agreement.110

A commenter suggested that use of 

terms such as ‘‘confirmation’’ should 

reflect long-standing market 

conventions that differ according to the 

type of underlying reference asset.111

Another commented similarly that the 

definition used for ‘‘confirmation’’ 

should reflect the underlying 

conventions that are prevalent in the FX 

market, which may be different to those 

used in other asset classes.112

The Commission agrees that 

clarification is necessary with respect to 

the proposed requirement that a 

confirmation would legally supersede 

any previous agreement (electronically 

or otherwise).113 The Commission 

believes that adding the phrase ‘‘relating 

to the swap’’ following ‘‘previous 

agreement’’ provides sufficient clarity. 

Absent a requirement that the 

confirmation legally supersedes the 

previous agreement relating to the swap, 

transparency could be lost as key terms 

could be included in the schedule or 

credit support annex and conflict with 

terms later added to the confirmation. It 

is industry practice that the 

confirmation is the controlling 

document, and such confirmation will 

usually incorporate the schedule, master 

and any collateral arrangement(s) by 

reference. 

With respect to the comment that 

‘‘confirmation’’ should reflect longstanding market conventions that differ 

according to the type of underlying 

reference class, the Commission 

believes that the definition as proposed, 

with the modification as described 

above, provides adequate clarity to 

allow flexibility for different market 

participants, asset classes and methods 

of execution. Therefore, the Commission 

is adopting the definition of 

confirmation as proposed with some 

minor clarifications, including adding 

‘‘relating to the swap’’ to the end of the 

definition to make clear that the 

agreement that would be legally 

superseded would have to relate to the 

same swap. 

Confirmation by Affirmation—Proposed 

§ 43.2(h) 

This term is adopted as proposed, 

except for the deletion of the last 


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1194 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 

114Proposed § 43.2(h) contained the sentence: 

‘‘With the affirmation by one party to the complete 

swap terms submitted by the other party, the swap 

is legally confirmed and a legally binding 

confirmation is consummated (i.e., confirmation by 

affirmation).’’ 

115See 75 FR 75211, n. 30 (Dec. 2, 2010). 

116See CL–ISDA/SIFMA. See supra note 80. 

117See CL–GFXD. 

118 ‘‘Execution’’ is defined in proposed 

§ 23.500(d) to mean, with respect to a swap 

transaction, ‘‘an agreement by the counterparties 

(whether orally, in writing, electronically, or 

otherwise) to the terms of the swap transaction that 

legally binds the counterparties to such terms under 

applicable law.’’ See 75 FR 81519 at 81530. 119See CL–NFPEEU. 

sentence of the proposed definition.114

Upon further consideration, while it 

agrees with that statement, the 

Commission believes that this statement 

is not necessary and therefore should 

not be included in the definition. 

Embedded Option—Proposed § 43.2(i) 

This defined term is adopted as 

proposed with a minor clarification. The 

proposed definition stated that an 

embedded option was a right, but not an 

obligation, provided to one party of a 

swap by the other party ‘‘to the same 

swap that provides the party in 

possession of the option * * *.’’ The 

Commission is clarifying this language 

to provide that the ‘‘party holding the 

option’’ that has the ability to change 

any of the economic terms of the swap 

‘‘as those terms previously were 

established at confirmation (or were in 

effect on the start date).’’ 

Executed—Proposed § 43.2(j) 

The Commission is adopting this term 

as proposed. 

Execution—Proposed 43.2(k) 

Proposed § 43.2(k) defined 

‘‘execution’’ as the agreement between 

parties to the terms of a swap that 

legally binds the parties to such terms 

under applicable law. An agreement 

may be in electronic form (e.g., on a SEF 

or DCM or via instant message); oral 

(e.g., telephonically); in writing (e.g., a 

bespoke, structured transaction where 

documents are exchanged); or in some 

other format not contemplated at this 

time. Execution is simultaneous with or 

immediately follows the affirmation of 

the swap. The SEC does not define 

‘‘execution’’ in its Proposed Regulation 

SBSR, but rather defines ‘‘time of 

execution’’ as the ‘‘point at which the 

counterparties to an SBS become 

irrevocably bound under applicable 

law.’’ 115 One commenter asserted that 

the use of terms such as ‘‘execution’’ 

should reflect long-standing market 

conventions that differ according to the 

type of underlying reference asset.116

The commenter further stated that 

harmonization of these terms in the 

Commission’s and SEC’s rules for a 

particular product type will foster 

operational efficiency, lessen the 

incidence of errors, and place fewer 

burdens on reporting agencies. Another 

commenter stated that the definition 

used for ‘‘execution’’ should reflect the 

underlying conventions that are 

prevalent in the FX market, which may 

be different from those used in other 

asset classes.117

In response to the comments that 

‘‘execution’’ should reflect longstanding market conventions that differ 

according to the type of underlying 

reference asset and underlying 

conventions in the FX market, the 

Commission believes that the definition 

as proposed provides adequate clarity to 

allow flexibility for different market 

participants, asset classes and methods 

of execution. Additionally, the 

definition is substantially similar to that 

in proposed Commission regulation 

§ 23.500(d).118

However, in order to provide 

additional clarity with respect to the 

definition of ‘‘execution,’’ the 

Commission is modifying the last 

sentence of the proposed definition to 

read, ‘‘Execution occurs simultaneous 

with or immediately following the 

affirmation of the swap.’’ The 

Commission believes that swaps 

associated with structured transactions 

will, for the most part, be bespoke, or 

customized, transactions. These 

structured transactions will be 

identified as bespoke when publicly 

disseminated. Additionally, the 

Commission believes it is necessary to 

make clear that execution (i.e., when a 

legally binding contract is formed) for 

certain structured transactions may not 

occur until the documents are signed 

and/or the deal is funded. 

Large Notional Swap—Proposed 

§ 43.2(l) 

Although no comments were received 

in connection with the proposed 

definition, the Commission has 

determined to make certain technical 

and conforming changes consistent with 

other definitional changes and 

terminology throughout part 43: The 

term ‘‘large notional swap’’ is renamed 

‘‘large notional off-facility swap’’ for 

added clarity. All references to ‘‘large 

notional swap’’ should be read 

interchangeably with the term ‘‘large 

notional off-facility swap’’ for the 

purposes of these part 43 rules. In 

addition, the Commission has made 

minor technical and conforming 

changes to the definition. Specifically, 

the definition is simplified to clarify 

that the term large notional off-facility 

swaps applies to all off-facility swaps 

with a notional or principal amount at 

or above the appropriate minimum 

block size that nevertheless are not 

block trades. 

Minimum Block Trade Size—Proposed 

§ 43.2(m) 

The Commission is not adopting a 

definition for ‘‘minimum block trade 

size’’ at this time; the definition will be 

addressed in connection with the block 

trade re-proposal to be published for 

comment in the Federal Register. 

Newly-Listed Swap—Proposed § 43.2(n) 

The Commission is not adopting a 

definition for ‘‘newly-listed swap’’ in 

this final rulemaking; the definition will 

be addressed in connection with the 

block trade re-proposal to be published 

for comment in the Federal Register. 

Novation—Proposed § 43.2(o) 

The Commission is adopting the 

defined term ‘‘novation’’ as proposed 

with a minor, non-substantive 

clarification. 

Off-Facility Swap—Proposed § 43.2(p) 

One commenter contended that the 

definition of ‘‘off-facility swaps’’ 

unnecessarily complicate an already 

complex process and is not required by 

the Act.119 The Commission disagrees: 

Terms and sufficiently detailed 

definitions assist readers to understand 

the rule, to adequately define complex 

products and to assist in describing the 

requirements for registered entities and 

market participants. 

While there are no substantive 

changes to this definition, the 

Commission made minor technical and 

conforming changes by adding 

‘‘publicly’’ before ‘‘reportable swap 

transaction’’ to conform with the change 

to the defined term. 

Other Commodity—Proposed § 43.2(q) 

Although the Commission did not 

receive comments addressing the 

definition of ‘‘other commodity,’’ it has 

determined to modify the definition to 

more appropriately reflect other 

revisions to proposed § 43.2. The 

proposed definition stated, ‘‘Other 

commodity means any commodity that 

cannot be grouped in the credit, 

currency, equity or interest rate asset 

class categories.’’ Section 43.2 defines 

‘‘other commodity’’ as follows: ‘‘Other 

commodity means any commodity that 

is not categorized in the other asset 

classes as may be determined by the 

Commission.’’ 


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120The Commission’s Web site can be accessed at 

www.cftc.gov. 

121No comments were received in response to the 

proposed definition of ‘‘real-time public reporting.’’ 

122No comments were received in response to the 

proposed definition of ‘‘remaining party.’’ 

123See CL–TriOptima. 

124See CL–Chris Barnard. 

125The Commission notes that the examples 

provided in the definition of ‘‘publicly reportable 

swap transaction’’ are not exhaustive. 

126See the discussion of § 43.1 for further 

discussion relating to swaps between affiliates and 

portfolio compression exercises. 

127This language is consistent with the definition 

of ‘‘swap transaction’’ in proposed § 23.500(m). See 

75 FR 81519 (December 28, 2010). 

The phrase ‘‘as may be determined by 

the Commission’’ modifies the phrase 

‘‘other asset classes’’ to adequately 

reflect the language in the definition of 

‘‘asset class.’’ 

Public Dissemination and Publicly 

Disseminate—Proposed § 43.2(r) 

The proposed definition of ‘‘publicly 

disseminate’’ states that data should be 

disseminated on a non-discriminatory 

basis. Commenters requested further 

clarification relating to the definition of 

‘‘publicly disseminate.’’ One believed 

that the definition was too passive in 

describing how the data is delivered. 

Two commenters asked for clarification 

whether the data that is publicly 

disseminated is pre- or post-allocation. 

The Commission clarifies that the 

swap transaction and pricing data that 

must be publicly disseminated is preallocation data. Accordingly, the 

notional or principal amount that would 

be publicly disseminated would be the 

pre-allocated amount. 

The Commission disagrees that the 

definition of ‘‘publicly disseminate’’ is 

too passive in describing how the data 

are delivered. The Commission believes 

that ‘‘publicly disseminate’’ should 

mean making the data readily available 

in a non-discriminatory manner to those 

who wish to access it, rather than 

pushing out the data to market 

participants, data vendors, news media, 

etc. 

In the Commission’s view the 

proposed definition of ‘‘publicly 

disseminate,’’ is sufficiently clear. This 

definition is intended to convey that the 

data are available to all interested 

parties. The Commission believes that 

posting the swap transaction and 

pricing data on an Internet Web site and 

providing the Commission with a link to 

a conspicuous Internet Web site on 

which anyone can freely access the 

information is sufficient to satisfy the 

definition of publicly disseminate. The 

Commission expects to post these links 

on its Web site to provide market 

participants and the public with a 

central location to access such data.120

The Commission agrees with 

commenters that the term ‘‘widely 

published’’ should be clarified, and has 

defined ‘‘widely published’’ in § 43.2 to 

mean, ‘‘to publish and make available 

through electronic means and in a 

manner that is freely available and 

readily accessible to the public.’’ 

Real-Time Disseminator—Proposed 

§ 43.2(s) 

All real-time data must be sent to 

SDRs, and SDRs must ensure that such 

data is publicly disseminated. For this 

reason, the Commission has concluded 

that a separate definition of ‘‘real-time 

disseminator’’ could be confusing and is 

unnecessary. Accordingly, the 

Commission has determined not to 

adopt this defined term in § 43.2. 

Real-Time Public Reporting—Proposed 

§ 43.2(t) 

The Commission is adopting this term 

as proposed.121

Remaining Party—Proposed § 43.2(u) 

This Commission is adopting this 

term as proposed.122

Reportable Swap Transaction— 

Proposed § 43.2(v) 

Proposed § 43.2(v) defined this term 

as ‘‘any executed swap, novation, swap 

unwind, partial novation, partial swap 

unwind or such post-execution event 

that affects the price of a swap.’’ The 

proposed definition included both the 

execution of a swap and certain priceaffecting events that occur over the life 

of a swap. The Commission believes 

novations and swap unwinds are events 

that may affect the price of the swap and 

should be publicly disseminated in realtime, but only to the extent that they 

affect the pricing of the swap. In 

addition to novations and swap 

unwinds, other price-affecting events 

over the life of a swap may be 

considered ‘‘reportable swap 

transactions.’’ One commenter 

contended that the criteria for 

‘‘reportable swap transaction’’ should 

exclude internal transactions between 

related or affiliated parties, such as 

back-to-back transactions between 

trading centers for the purpose of 

transferring the management of risk, 

where the pricing of the individual 

transaction could be influenced by 

group internal issues.123 Another 

commenter stated that the reporting of 

lifecycle events should be limited to 

price-forming events. This commenter 

further suggested the inclusion of an 

unconditional requirement to report any 

information which could affect prices or 

pricing attributes during the life of a 

swap.124

The Commission recognizes 

commenters’ concerns regarding the 

criteria for ‘‘reportable swap 

transaction’’ and also agrees that the 

reporting of lifecycle events should be 

limited to price-forming events. 

Accordingly, it is modifying the 

definition of ‘‘reportable swap 

transaction’’ in proposed § 43.2(v) to 

address these concerns. The defined 

term has been changed to ‘‘publicly 

reportable swap transaction’’ to make 

clear that the scope of the definition 

covers only those swaps and lifecycle 

events that are to be publicly 

disseminated pursuant to part 43, and 

not necessarily all of the swaps and 

lifecycle events that must be reported to 

SDRs for regulatory purposes. The 

Commission is limiting the scope of 

publicly reportable swap transactions to 

those executed swaps that are arm’slength and that result in a change in the 

market risk position between two 

parties. The Commission also is 

providing clarifying examples in the 

definition regarding executed swaps 

that need not be publicly disseminated 

because they are not arm’s-length 

transactions between two parties, 

notwithstanding that they do result in a 

corresponding change in the market risk 

position between the two parties. The 

definition provides that such swaps 

include: (1) Internal swaps between onehundred percent owned subsidiaries of 

the same parent entity; and (2) portfolio 

compression exercises.125

The Commission’s definition of 

publicly reportable swap transaction 

does not include swaps that are not 

executed at arm’s-length. These 

transactions do not serve the price 

discovery objective of CEA section 

2(a)(13)(B). Moreover, the public 

dissemination of such trades and 

exercises may reveal the identity of a 

counterparty in violation of CEA 

sections 2(a)(13)(E)(i) and (C)(iii). 

Further, the public dissemination of 

such information may mislead the 

market.126 The definition also modifies 

the list of lifecycle events (‘‘priceforming continuation events’’). This 

modification was made to provide 

clarity as to the types of lifecycle events 

that are publicly reportable swap 

transactions and to provide conformity 

between Commission regulations.127


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128See Real-Time NPRM supra note 6, at 76145. 

129Comments regarding ‘‘swap instrument’’ 

received in connection with the Proposing Release 

also will be considered by the Commission in its 

re-proposal of the block trade rules. 

130See CL–NFPEEU. 

131See CL–ATA. 

132See CL–MS. 

133See CL–CME. 

Reporting Party—Proposed § 43.2(w) 

The Commission is adopting this 

definition as proposed with minor 

conforming changes including adding 

the word ‘‘publicly’’ before ‘‘reportable 

swap transaction’’ and adding ‘‘43’’ after 

‘‘part.’’ 

Social Size—Proposed § 43.2(x) 

The Commission is not adopting the 

defined term ‘‘social size’’ at this time. 

The Commission will address the 

concept of ‘‘social size’’ in a 

forthcoming re-proposal of the block 

trade rules to be published for comment 

in the Federal Register. Comments 

regarding ‘‘social size’’ received in 

connection with the Proposing Release 

will be considered by the Commission 

in its re-proposal of the block trade 

rules. 

Swap Instrument—Proposed § 43.2(y) 

In the Proposing Release, the 

Commission stated that swap 

instrument groupings or categories 

should be relatively broad for the 

purposes of calculating minimum block 

sizes.128 The Commission solicited 

comments addressing how it should 

refine the definition and received eleven 

comments from various interested 

parties, including industry associations 

representing myriad financial market 

participants, SDs, an asset manager, 

potential SDRs and a financial end-user. 

Several commenters requested further 

clarification of this definition. Others 

challenged the Commission’s ability to 

develop adequate swap instrument 

categories and a definition without 

adequate data. 

Some commenters urged the 

Commission to consider various criteria 

when creating groupings or categories of 

swaps instruments. One commenter 

provided a list of major currencies to 

consider while another cited a list of the 

key drivers of liquidity. Another 

commenter submitted information on 

how liquidity should be considered 

when determining the swap instrument 

groupings. Other commenters argued 

that the groupings or categories for 

‘‘swap instrument’’ should be more 

specific. One commenter suggested that 

the Commission define the relevant 

swap markets and contracts with 

sufficient granularity to appropriately 

reflect different types of swap 

transactions. The Commission does not 

believe it is necessary to adopt a more 

granular definition of swap contracts in 

light of the revisions to the asset class 

definition, the re-proposal relating to 

block trades sizes and the 

implementation phase in. 

The Commission agrees that its ability 

to develop adequate swap instrument 

groupings or categories would benefit 

from adequate market data as well as 

further research. Therefore the 

Commission has determined not to 

define ‘‘swap instrument’’ at this time. 

The Commission will address the 

concept of ‘‘swap instrument’’ in a reproposal of the block trade rules to be 

published for comment in the Federal 

Register.129

Swap Market—Proposed § 43.2(z) 

As discussed above, the Commission 

disagrees that definitions such as ‘‘swap 

markets,’’ ‘‘off-facility swaps,’’ ‘‘realtime price disseminators’’ and ‘‘third 

party service providers’’ unnecessarily 

complicate an already complex 

process.130 The Commission believes 

that such terminology, including 

sufficiently-detailed definitions, is 

necessary to assist readers’ 

understanding of the rule and to 

adequately define and describe complex 

products and the requirements of 

registered entities and market 

participants. Nor does the Commission 

agree that the creation of such terms is 

inconsistent with the statute. The 

Commission believes the terms are 

consistent with the statutory purposes 

and/or requirements of CEA section 

2(a)(13). However, in the interest of 

clarity the Commission is replacing the 

term ‘‘swap market’’ with ‘‘registered 

swap execution facility or designated 

contract market’’ in the final rule. 

Swap Unwind—Proposed § 43.2(aa) 

In light of changes to the term 

‘‘publicly reportable swap transaction,’’ 

the Commission is not adopting the 

defined term ‘‘swap unwind.’’ 

Third-Party Service Provider—Proposed 

§ 43.2(bb) 

In light of changes to final § 43.3, the 

Commission is not adopting the defined 

term ‘‘third-party service provider.’’ 

Transferee—Proposed § 43.2(cc) 

The Commission is adopting this 

defined term as proposed. 

Transferor—Proposed § 43.2(dd) 

The Commission is adopting this 

defined term as proposed. 

Unique Product Identifier—Proposed 

§ 43.2(ee) 

The Commission is adopting this 

defined term as proposed with the 

clarification that the definition refers to 

a ‘‘product in an asset class or sub-asset 

class’’ and not the asset class itself, as 

well as an additional reference to 

appendix A to part 43. 

U.S. Person—Proposed § 43.2(ff) 

The Commission is not adopting the 

defined term ‘‘U.S. person’’ since the 

term is not used in the final rules. 

3. Additional Issues Relating to Defined 

Terms 

Several commenters suggested adding 

defined terms that were not included in 

proposed § 43.2: 

Illiquid Markets 

Commenters suggested that the 

Commission define ‘‘illiquid markets’’ 

subject to this provision by reference to 

particular commodities, such as jet fuel, 

or by a formula relating to the average 

number of transactions per day. One 

comment suggested that market 

segments be defined by distance on the 

forward curve.131 The commenter 

believes that many swap contracts in 

physical commodities that are longer 

than nine months forward should be 

eligible for a delay in public 

dissemination. Another commenter 

suggested that the determination of 

what constitutes an illiquid market 

should be based on the number of 

reported transactions, and that any 

market in which the average number of 

transactions (measured annually) is less 

than five transactions per day be 

deemed to be ‘‘illiquid.’’ 132

The Commission has considered these 

comments, but does not believe that a 

definition of ‘‘illiquid markets’’ is 

necessary to this rulemaking. Comments 

regarding liquidity are discussed in this 

Adopting Release and will be further 

considered by the Commission in its reproposal of the block trade rules. 

Widely Published 

One commenter suggested that the 

term ‘‘widely published,’’ as used 

within the definition of ‘‘public 

dissemination and publicly 

disseminate’’ is subject to interpretation 

and should be separately defined.133

Accordingly, the Commission has 

defined ‘‘widely published’’ in § 43.2 as 

follows: ‘‘Widely published means to 

publish and make available through 

electronic means in a manner that is 

freely available and readily accessible to 

the public.’’ 


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134The Commission notes that CEA section 

4r(a)(3) provides: (A) ‘‘With respect to a swap in 

which only 1 counterparty is a swap dealer or major 

swap participant, the swap dealer or major swap 

participant shall report the swap as required under 

[CEA sections 4r(a)(1) and (2)];’’ (B) ‘‘With respect 

to a swap in which 1 counterparty is a swap dealer 

and the other is a major swap participant, the swap 

dealer shall report the swap as required under [CEA 

sections 4r(a)(1) and (2)];’’ and (C) ‘‘With respect to 

any other swap not described in subparagraph (A) 

or (B), the counterparties to the swap shall select 

a counterparty to report the swap as required under 

[CEA sections 4r(a)(1) and (2)].’’ 

135Commenters include: WFE/IOMA; GFXD; 

Tradeweb; Working Group of Commercial Energy 

Firms; FHLBanks; SIFMA AMG; DTCC; Markit; 

MarkitSERV; BlackRock; Barclays; ISDA/SIFMA; 

Coalition of Derivatives End-Users; ICE; Foreign 

Headquartered Banks; WMBAA; NFPEEU; ICI; FSR; 

Coalition of Energy End-Users; and Better Markets. 

136The commenters addressing this issue include: 

Barclays; BlackRock; ISDA/SIFMA; GFXD; 

Coalition of Energy End-Users; ICE; and 

MarkitSERV. 

137See CL–GFXD. 

138The commenters include: Barclays; BlackRock; 

WFE/IOMA; ISDA/SIFMA; WMBAA; SIFMA AMG; 

ICI; NFPEEU; DTCC; Markit; and MarkitSERV. 

139See CL–MarkitSERV. 

140See CL–ICI; CL–SIFMA AMG. 

141See CL–ICI. 

C. Section 43.3—Method and Timing for 

Real-Time Public Reporting 

As proposed, § 43.3 specified both the 

manner in which swap counterparties 

must report swap transaction and 

pricing data to the appropriate 

registered entity, and the manner in 

which registered entities must publicly 

disseminate such data. This section also 

established requirements for: (1) 

Acceptable forms of media through 

which swap transaction and pricing 

data may be made available to the 

public; (2) appropriate methods to 

cancel or correct erroneous or omitted 

data that has been publicly 

disseminated; (3) the hours of operation 

that SEFs, DCMs and SDRs must 

maintain for the public dissemination of 

swap transaction and pricing data; and 

(4) recordkeeping of data. 

1. Responsibilities of Parties to a Swap 

(§ 43.3(a)) 

CEA section 2(a)(13)(F) provides the 

Commission with authority to 

determine reporting requirements for 

swap counterparties: 

[p]arties to a swap (including agents of the 

parties to a swap) shall be responsible for 

reporting swap transaction information to the 

appropriate registered entity in a timely 

manner as may be prescribed by the 

Commission. 

As proposed, § 43.3(a) provided that 

the reporting party to each swap 

transaction would be responsible for 

reporting to a real-time disseminator ‘‘as 

soon as technologically practicable.’’ 

The designation of the responsible party 

depended on the execution of the swap 

transaction. For swap transactions 

executed on a SEF or DCM, proposed 

§ 43.3(a)(2)(i) provided that the SEF or 

DCM must report to a real-time 

disseminator ‘‘as soon as 

technologically practicable.’’ For offfacility swaps, proposed § 43.3(a)(3) 

established the following hierarchy of 

counterparties to determine who has the 

responsibility to report to an SDR: 

• If only one party is an SD or MSP, 

the SD or MSP shall be the reporting 

party. 

• If one party is an SD and the other 

party is an MSP, the SD shall be the 

reporting party. 

• If both parties are SDs, the SDs shall 

designate which party shall be the 

reporting party. 

• If both parties are MSPs, the MSPs 

shall designate which party shall be the 

reporting party. 

• If neither party is an SD or MSP, the 

parties shall designate which party (or 

its agent) shall be the reporting party. 

Proposed § 43.3(a)(3) provided that 

the reporting party must report swap 

transaction and pricing data to a realtime disseminator ‘‘as soon as 

technologically practicable.’’ The abovereferenced hierarchy is consistent with 

the reporting requirements for uncleared 

swaps to an SDR under CEA section 

4r(a).134

Proposed § 43.3(a)(2)(i) also specified 

that for swaps executed on a SEF’s or 

DCM’s trading system or platform, ‘‘a 

reporting party shall satisfy its reporting 

requirement under this section by 

executing such reportable swap 

transaction on [such SEF or DCM].’’ 

Proposed § 43.3(b) provided that a SEF 

or DCM satisfies its reporting 

requirement by (i) sending the real-time 

swap transaction and pricing data to an 

SDR that accepts and publicly 

disseminates such data; or (ii) sending 

such data to a third party service 

provider. Proposed § 43.3(a)(3) provided 

that bilateral swaps must be sent to an 

SDR that accepts and publicly 

disseminates swap transaction and 

pricing data. 

The Commission received 21 

comments addressing the 

responsibilities of swap counterparties 

with respect to real-time public 

reporting. The commenters included 

industry associations representing 

myriad financial market participants, a 

potential SD, and several service 

providers to the OTC derivatives 

industry.135

Several commenters expressed 

concern regarding the proposed 

framework for determining 

responsibility to report swap transaction 

and pricing data pursuant to part 43. 

Specifically, commenters questioned 

how responsibility is allocated when 

two parties are within the same category 

(i.e., both parties are MSPs or endusers). Proposed § 43.3(a)(3) provided 

that when both parties to an off-facility 

swap are within the same category, the 

parties must designate which of them 

will be the reporting party. Some 

commenters agreed with this approach. 

Others, however, believe that the 

Commission should amend proposed 

part 43 to follow current market 

conventions. For instance, a few 

commenters noted that in the 

interdealer market, the seller of 

protection is responsible for confirming 

the swap transaction with a 

confirmation service.136 Another 

commenter noted that while adopting 

current market conventions would 

eliminate confusion in asset classes like 

credit and equity, it would not eliminate 

confusion in other asset classes such as 

foreign exchange.137 Commenters also 

questioned whether DCOs should be 

able to act as reporting parties when an 

off-facility swap is cleared.138 Several 

other commenters argued that the 

reporting party should be able to 

contract with any third-party service 

providers to fulfill its reporting 

obligation, including SEFs and existing 

confirmation/matching service 

providers.139 Many of these commenters 

emphasized the perceived adverse and 

disproportionate impact that reporting 

obligations would place on endusers.140 Indeed, one commenter stated 

that an end-user would have to expend 

significant time and resources to 

develop infrastructure and automation 

to comply with the reporting 

requirements in the Proposing 

Release.141

Two commenters argued that, to 

ensure accuracy and reduce 

fragmentation, only regulated SDRs 

should be able to satisfy the real-time 

reporting requirement. Several 

commenters also stated that the 

Commission’s Proposing Release was 

not consistent with the SEC’s proposed 

Regulation SBSR regarding the explicit 

ability of end-users to use third parties 

to comply with their reporting 

obligations. 

Certain comments focused on the 

Commission’s reporting framework in 

proposed § 43.3(a)(3). Three 

commenters contended that the 

Proposing Release was somewhat 

inflexible and would create 

disproportionate burdens on end-users 

that would not have the capacity to 

report swap transaction and pricing data 


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142The specific commenters include: FSR; ICI; 

and SIFMA AMG. 

143Additionally, CEA section 2(a)(13)(A) states 

that the definition of real-time public reporting 

means ‘‘to report data relating to a swap transaction, 

including price and volume, as soon as 

technologically practicable after the time at which 

the swap transaction has been executed.’’ 

144See CL–Coalition for Derivatives End-Users; 

CL–ISDA/SIFMA. 

145See CL–ICE; CL–Tradeweb; CL–Coalition of 

Energy End-Users; CL–DTCC; and CL–MarkitSERV. 

146See CL-DTCC; CL–MarkitSERV. 

147Pursuant to part 49, the Commission may 

grant provisional registration to an SDR if the 

applicant is in substantial compliance with the 

registration standards set forth in § 49.3(a)(4) and is 

able to demonstrate operational capability, real-time 

processing, multiple redundancy and robust 

security controls. 

148 In this circumstance, the Commission notes 

that the obligation to report remains with the 

reporting party. 

149 It is important to note that DCOs may provide 

reporting services; however, real-time reporting and 

public dissemination must occur ‘‘as soon as 

technologically practicable’’ after execution unless 

subject to an appropriate time delay as described in 

§ 43.5. 

150Proposed Regulation SBSR provided, 

‘‘[P]roposed Rule 901(a) would not prevent a 

reporting party to a SBS from entering into an 

agreement with a third party to report the 

transaction on behalf of the reporting party. For 

example, for a SBS executed on a security-based 

swap execution facility (‘‘SB SEF’’) or a national 

securities exchange, the SB SEF or national 

securities exchange could transmit a transaction 

report for the SBS to a registered SDR. By specifying 

the reporting party with the duty to report SBS 

information under proposed Regulation SBSR, the 

Commission does not intend to inhibit the 

development of commercial ventures to provide 

trade processing services to SBS counterparties. 

Nevertheless, a SBS counterparty that is a reporting 

party would retain the obligation to ensure that 

information is provided to a registered SDR in the 

in real-time.142 To relieve this perceived 

burden, these commenters asked the 

Commission to allow parties to offfacility swaps to independently 

designate the reporting party or, in the 

alternative, to place most of the 

responsibility on dealers and MSPs. 

These commenters believe that the swap 

counterparties should be able to decide 

the reporting party, regardless of 

whether the parties are within the same 

category. 

As noted, the Proposing Release 

provided that the reporting party must 

report swap transaction and pricing data 

‘‘as soon as technologically 

practicable.’’ 143 The Commission 

solicited comments as to whether it 

should establish maximum reporting 

timeframes for the various categories of 

reporting parties to swap transactions 

(e.g., ‘‘as soon as technologically 

practicable but no later than X 

minutes’’). In response, some 

commenters recommended that the 

Commission not establish maximum 

reporting timeframes, primarily because 

of the end-users’ limited technological 

reporting capacity and the resulting 

significant financial burdens on endusers.144 These commenters argued 

alternatively that if the Commission 

prescribes specific timeframes, it should 

aim for an appropriate balance between 

speed and accuracy and adopt longer 

time frames for end-users. 

Many commenters supported 

proposed § 43.3(a)(2)(i), which provided 

that the swap transaction and pricing 

data reporting requirement is itself 

satisfied by the act of execution on the 

SEF or DCM.145 Commenters reasoned 

that SEFs and DCMs should have the 

capability to report transactions ‘‘as 

soon as technologically practicable’’ and 

to preserve anonymity. Two 

commenters recommended that the 

decision where to report remain with 

the parties of the swap and not be 

satisfied by executing on a SEF or 

DCM.146 As noted in the discussion of 

§ 43.1(b) above, commenters also raised 

extraterritoriality concerns with regard 

to reporting parties of swaps. 

After consideration of these 

comments the Commission is adopting 

§ 43.3(a) with certain revisions. The 

Commission received no comments 

directly addressing proposed 

§ 43.3(a)(1). It is adopting these 

provisions with technical and clarifying 

changes to reflect changes to defined 

terms in § 43.2 as well as a clarification 

that the reporting should occur ‘‘after 

such publicly reportable swap 

transaction is executed.’’ Additionally, 

the Commission is adding a sentence at 

the end of this provision to make clear 

that, for purposes of part 43, any 

references to a ‘‘registered swap data 

repository’’ would include provisionally 

registered SDRs.147

With respect to proposed 

§ 43.3(a)(2)(i), the Commission agrees 

that SEFs and DCMs should serve as 

reporting parties for swaps that are 

executed on the execution platform. The 

Commission acknowledges the 

recommendation that the decision 

where to report the swap transaction 

and pricing data instead remain with 

the parties to the swap. However, the 

Commission believes that there are 

several benefits to requiring SEFs and 

DCMs to report these transactions 

directly to SDRs, including utilization of 

the technology of the execution 

platform, increased speed of reporting 

(and therefore increased transparency) 

and the ability for straight-through 

processing. 

Proposed § 43.3(a)(2)(ii) prescribed 

the method and timing for real time 

public reporting of block trades 

executed pursuant to the rules of a SEF 

or DCM. Although the Commission has 

determined not to adopt the proposed 

§ 43.5 rules relating to block trades, it 

believes that proposed § 43.3(a)(2)(i) and 

(ii) can be combined in this final rule to 

simplify the requirement. For the 

reasons discussed above, the 

Commission is adopting the provisions 

of § 43.3(a)(2) largely as proposed, with 

several clarifying, technical and 

conforming changes necessitated by 

other part 43 definitional and 

terminology changes. 

The provision now references swaps 

‘‘executed’’ on or pursuant to the rules 

of a SEF or DCM to ensure that block 

trades executed ‘‘pursuant to the rules 

of’’ a SEF or DCM would be included in 

the provision. Accordingly, if parties 

executed a block trade away from a SEF 

or DCM and then brought the swap 

transaction and pricing data pertaining 

to that block trade to the SEF or DCM 

pursuant to its rules, the parties to the 

swap would satisfy their reporting 

requirements under part 43. The SEF or 

DCM would then report the swap 

transaction data for public 

dissemination. 

With respect to proposed § 43.3(a)(3), 

the Commission has considered 

comments that DCOs should be 

authorized to act as reporting parties 

when an off-facility swap is cleared. The 

Commission has also noted 

commenters’ contention that the 

reporting party should be able to 

contract with any third party, including 

SEFs and existing confirmation/ 

matching service providers, to satisfy its 

reporting obligation. The Commission 

agrees that the reporting party to an offfacility swap which is cleared should be 

able to contract with third parties 

(including DCOs or confirmation/ 

matching service providers) to meet its 

reporting obligations under part 43.148

The Commission believes that 

competition among third-party 

providers may foster the development of 

innovative and cost effective 

technological solutions that would 

create efficiencies for market 

participants that do not have the 

resources to develop such solutions. 

The use of third parties in reporting 

swap transaction and pricing data could 

reduce costs to market participants. For 

example, third parties may be able to 

develop low-cost and readily accessible 

web-based solutions to enable financial 

and non-financial end-users to comply 

with their reporting obligations when 

entering into transactions with other 

end-users.149

The Commission acknowledges that 

its Proposing Release and the SEC’s 

proposed Regulation SBSR differ with 

respect to end-users’ reporting 

obligations.150 The Commission 


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manner and form required by proposed Regulation 

SBSR, even if the reporting party has entered into 

an agreement with a third party to report on its 

behalf.’’ 75 FR 75211–75212. 

151Thus, a reporting party, SEF or DCM would be 

liable for a violation of § 43.3 if, for example, a third 

party acting on behalf of a reporting party did not 

report the appropriate swap transaction and pricing 

data to an SDR for public dissemination. 

152To the extent that the parties have not agreed 

to the reporting party prior to the execution of the 

swap, the reporting party would be the SD or the 

MSP as applicable. 153See CL–FSR; CL–ICI; and CL–SIFMA AMG. 154The Commission recognizes that a publicly 

reportable swap transaction may be a multi-asset or 

hybrid instrument (e.g., a commodity-linked 

interest rate swap), meaning that each leg of such 

swap falls in a different asset class. The 

Commission believes that with respect to reporting 

such multi-asset or hybrid swaps pursuant to part 

43, absent an agreement by the swap counterparties 

stating otherwise, the reporting party, SEF or DCM 

shall choose the SDR to which the real-time swap 

transaction and pricing data is reported for public 

dissemination. The Commission expects that if an 

SDR is available for only one leg of a hybrid swap, 

the reporting party, SEF or DCM will send the realtime swap transaction and pricing data to such SDR 

for public dissemination. 

155See supra § 43.2 and related discussion in 

section II.B.2. 

156See CL–ISDA/SIFMA; CL–GFXD; CL–Foreign 

Headquartered Banks; and CL–TriOptima. 

157The Commission notes that until such time as 

an SDR is registered or provisionally registered for 

an asset class, reporting parties, SEFs and DCMs are 

permitted to publicly disseminate real-time swap 

transaction and pricing data. 

explicitly permits end-users, SEFs and 

DCMs to utilize third parties to comply 

with reporting obligations described in 

§ 43.3 in a manner similar to that 

described in the SEC’s proposed 

Regulation SBSR. However, unlike 

proposed Regulation SBSR, the 

Proposing Release provided that a 

reporting party’s reporting obligation is 

satisfied by executing a publicly 

reportable swap transaction on or 

pursuant to the rules of a SEF or DCM. 

SEFs and DCMs then have the 

obligation to report swaps that are 

executed on or pursuant to their trading 

system or platform to an SDR pursuant 

to § 43.3(b)(1), discussed below. A 

reporting party, SEF or DCM would 

retain the obligation to ensure that the 

appropriate information is provided in 

the appropriate timeframe to an SDR for 

public dissemination.151

The Commission has also considered 

comments addressing the allocation of 

reporting obligations when 

counterparties fall within the same 

market participant category. The 

Commission agrees that market 

conventions may determine which party 

will be obligated to report to an SDR 

when both parties to an off-facility swap 

are within the same category. However, 

the Commission favors a flexible 

approach and believes the swap 

counterparties should decide whether a 

market convention is used for 

determining the reporting party. In asset 

classes where market conventions 

currently exist, the Commission believes 

that parties to an off-facility swap 

should still have the same ability to 

agree on which party will serve as the 

reporting party. 

In response to these comments, the 

Commission has added the language 

‘‘[u]nless otherwise agreed to by the 

parties prior to the execution of the 

publicly reportable swap transaction, 

the following persons shall be reporting 

parties for off-facility swaps * * *’’ 

before the listing of reporting parties for 

off-facility swaps. The Commission 

concurs with commenters that there 

may be circumstances in which it makes 

greater economic or practical sense for 

a party other than the one described in 

the hierarchy in § 43.3(a)(3) to be the 

reporting party. This additional 

language will give the parties flexibility 

to agree on the reporting party in 

situations described in § 43.3(a)(3)(i) 

and (ii) as long as such agreement 

occurs prior to the execution of the 

publicly reportable swap transaction.152

And the Commission believes that in 

the situations described in 

§§ 43.3(a)(3)(iii), (iv) and (v), the 

designation of the reporting party for an 

off-facility swap provided for in the rule 

should be agreed to prior to execution 

of such swap in order to ensure 

compliance with the requirements of 

part 43. The requirement serves to 

ensure that reporting after execution is 

not hampered by the parties’ inability to 

agree. 

The Commission disagrees that the 

reporting framework in proposed 

§ 43.3(a)(3) was inflexible and would 

create disproportionate burdens on endusers which do not have the capability 

to report swap transaction and pricing 

data in real-time.153 In the 

Commission’s view, the approach taken 

in the Proposing Release created a 

balanced framework by placing a greater 

burden on SDs and MSPs, but not 

mandating which party must report if 

two parties are of the same category. 

Further, the Commission is adding to 

this provision the flexibility to 

determine the reporting party for a 

particular transaction if both parties 

agree prior to execution of the swap. As 

discussed above, the Commission 

believes such an approach is preferable 

to a prescriptive rule governing 

reporting. 

The reporting framework in 

§ 43.3(a)(3) strikes an appropriate 

balance from a cost-benefit perspective. 

Avoiding a more prescriptive regime for 

assigning the reporting responsibility in 

transactions between parties of the same 

category should allow the parties to 

determine which party can report the 

transaction at a lower cost.154 In the 

Commission’s view, it is appropriate to 

assign a greater cost burden to SDs and 

MSPs than to the buy-side (including 

end-users), as SDs and MSPs are likely 

to be larger, more sophisticated and 

more active in swap markets and thus 

more able to realize economies of scale 

in carrying out reporting 

responsibilities. In addition, allowing 

reporting parties to contract with third 

parties should allay concerns regarding 

the potential disproportionate cost 

burden placed on end-users. Moreover, 

the Commission’s definition of ‘‘as soon 

as technologically practicable’’ provides 

additional flexibility as its application 

includes consideration of the 

‘‘prevalence, implementation and use of 

technology by comparable market 

participants.’’ 155 The hierarchy of 

reporting parties described in 

§ 43.3(a)(3) for off-facility swaps would 

not apply to counterparties to block 

trades. 

Commenters have asserted that, to 

avoid ambiguity, the Commission 

should explicitly state in part 43 that 

only data relating to swap transactions 

where at least one party is a U.S.-based 

person are required to be reported and 

publicly disseminated in real-time.156

The Commission believes that both 

U.S.-based and non-U.S.-based 

counterparties that transact on or 

pursuant to the rules of a SEF or DCM 

should be subject to all of the real-time 

reporting requirements. 

Proposed § 43.3(a)(4) provided a 

process for reporting off-facility swaps 

when no SDR was available. As 

discussed below, under the 

Commission’s phase in and compliance 

date schedule, an SDR must be 

registered or provisionally registered for 

a particular asset class in order to 

comply with the part 43 

requirements.157 The Commission 

believes that coordinating the real-time 

reporting obligations with the regulatory 

reporting obligations will enable market 

participants to reduce reporting costs. 

Therefore, the Commission is not 

adopting § 43.3(a)(4) at this time. 

2. Public Dissemination of Swap 

Transaction and Pricing Data (§ 43.3(b)) 

CEA section 2(a)(13)(D) authorizes the 

Commission to require registered 

entities to publicly disseminate the 

swap transaction and pricing data 

required to be reported under CEA 

section 2(a)(13). Accordingly, proposed 

§ 43.3(b) specified the method and 

timeliness of public dissemination of 


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1200 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 

158While proposed § 43.3(c) generally required 

SDRs to register and comply with the requirements 

set forth in proposed part 49, neither the 

Commission’s proposal nor the Commission itself 

has the authority to require third-party service 

providers to comply with the same requirements. 

Instead, proposed § 43.3(d) attempted an indirect 

approach at requiring third-party service providers 

to comply with proposed part 49’s requirements. In 

particular, proposed § 43.3(d) provided that a [SEF 

or DCM] must ensure that the third-party service 

provider maintains standards for public reporting of 

swap transaction and pricing data that are, at a 

minimum, equal to those standards for registered 

SDRs as described in proposed § 43.3(c) and 

proposed part 49 of the Commission’s regulations. 

159The commenters include: GFXD; Working 

Group of Commercial Energy Firms; Coalition of 

Energy End-Users; WFE/IOMA; ICI; NFPEEU; ISDA/ 

SIFMA; Better Markets, Inc.; Coalition for 

Derivative End-Users; Reval; Tradeweb; DTCC; 

CME; Argus; Markit; MarkitSERV; BlackRock; 

FINRA; and NGX. 

160See CL–Reval; CL–Argus. 

161See CL–Reval. 

162See Meeting with Argus (December 15, 2010). 

163See CL–Markit; CL–NFPEEU; CL–MarkitSERV; 

and CL–DTCC. 

164See CL–MarkitSERV. 

165See CL–ISDA/SIFMA. 

166See CL–Coalition of Energy End-Users; CL– 

MarkitSERV; CL–Tradeweb; CL–NFPEEU; and CL– 

DTCC. 

167See CL–Working Group of Commercial Energy 

Firms; CL–Reval; CL–BlackRock; CL–CME; and CL– 

NFPEEU. 

168See CL–CME. 

169See CL–NFPEEU. 

170See CL–Coalition of Energy End-Users. 

171See CL–GFXD. 

172See CL–ICI. 

173See CL–Better Markets. 

174See CL–Coalition of Energy End-Users. 

175See CL–WMBAA. 

swap transaction and pricing data for 

swaps that are executed on a SEF or 

DCM. 

Proposed § 43.3(b)(1)(i) provided that 

a SEF or DCM must send or otherwise 

electronically transmit swap transaction 

and pricing data ‘‘as soon as 

technologically practicable’’ to: (1) An 

SDR that accepts swaps for the 

particular asset class of ‘‘reportable 

swap transactions;’’ or (2) a third-party 

service provider operating on behalf of 

the SEF or DCM. Such data would then 

be publicly disseminated in the same 

manner described in proposed 

§ 43.3(a)(3) for swaps that are executed 

off-facility (i.e., the SDR publicly 

disseminates such data ‘‘as soon as 

technologically practicable’’). The 

Proposing Release specified that if a SEF 

or DCM chose to use a third-party 

service provider for public 

dissemination, the obligation to ensure 

that such data was publicly 

disseminated would remain with the 

SEF or DCM, since the third-party 

service provider would be an 

unregulated entity.158 Accordingly, 

proposed § 43.3(b)(1)(i) required a SEF 

or DCM to remain vigilant in monitoring 

the timeliness and accuracy of the 

public dissemination if it chooses to use 

a third-party service provider. 

Proposed § 43.3(b)(2)(i) prohibited 

SEFs, DCMs or any reporting party to a 

swap from disclosing transaction and 

pricing data for a particular swap before 

an SDR or third-party service provider 

has disseminated data for that swap to 

the public. This prohibition—sometimes 

referred to as the ‘‘embargo rule’’—is 

intended to ensure that swap 

transaction and pricing data is 

disseminated uniformly and is not 

published in a manner that creates an 

unfair advantage for any segment of 

market participants. At the same time, 

however, proposed § 43.3(b)(2)(ii) 

permitted a SEF or DCM to make swap 

transaction and pricing data available to 

participants on its market prior to 

public dissemination of such data. 

Similarly, proposed § 43.3(b)(2)(iii) 

permitted an SD to share swap 

transaction and pricing data with its 

customers prior to public dissemination 

of such data. These sections were 

intended to give SEFs, DCMs and SDs 

the flexibility to share swap transaction 

and pricing data with their market 

participants or customers, respectively, 

concurrent with the transmission of 

such data to an SDR or third-party 

service provider for public 

dissemination. 

Various interested parties commented 

on the method of dissemination of swap 

transaction and pricing data to the 

public.159 These commenters raised a 

number of issues including: (1) The use 

of SDRs for public dissemination; (2) the 

use of third-party service providers for 

public dissemination; (3) the 

requirement that SDRs accept all swaps 

in a particular asset class; (4) the 

embargo rule; and (5) the consolidation 

of data. 

Two commenters asserted that SDRs 

should not be used to real-time report 

swap transaction and pricing data.160

One urged that SDRs not be used 

because they are the last party to receive 

the swap data; 161 the other suggested 

that SDRs may have an unfair 

competitive advantage over third-party 

real-time disseminators.162 Conversely, 

four commenters argued that only SDRs 

should be used for dissemination of 

real-time data.163 One commenter 

requested that the Commission clarify 

the responsibilities of an SDR under 

part 43.164

Commenters expressed varying 

opinions with respect to the use of 

third-party service providers in public 

dissemination. One commenter 

supported the Commission’s proposal to 

give SEFs and DCMs the option to use 

third-party service providers to satisfy 

their public dissemination obligation.165

Five commenters opposed the use of 

potentially unregistered third-party 

service providers to satisfy the public 

dissemination obligation.166 Several 

commenters expressly supported the 

use of DCOs to disseminate real-time 

data.167 Specifically, one commenter 

stated that DCOs should publicly 

disseminate data for real-time purposes, 

because they currently have the 

infrastructure to support such 

operations.168 One commenter 

questioned the Commission’s statutory 

authority to introduce the third-party 

service provider concept. Indeed, this 

commenter argued that terms not in 

section 727 of the Dodd-Frank Act, such 

as third-party service provider, are 

unnecessary complications to an already 

complex statutory mandate and are not 

required by the Dodd-Frank Act.169

Commenters also offered solutions to 

the circumstance in which no SDR is 

available to disseminate swap 

transaction data. One commenter 

asserted that in those circumstances, if 

both counterparties are end-users, the 

reporting party should not be obligated 

to report at all.170 Another 

recommended that if no SDR is 

available to accept swap transaction and 

pricing data for a specific asset class, the 

swap transaction and pricing data 

should be reported to the Commission 

by the end of the day.171

Commenters also questioned the 

‘‘embargo rule.’’ One commenter stated 

that permitting SEFs, DCMs and 

reporting parties to disclose data prior 

to public dissemination would afford 

them an unfair competitive advantage 

over the general public.172 Another 

argued that any information embargo 

should be eliminated entirely.173

Another commenter, however, argued 

that if data were publicly disseminated 

later, it would cause confusion because 

‘‘[the] data, if disseminated after the fact 

* * * will not be representative of 

current market data when it is made 

public.’’ 174 One commenter argued that 

the role of ‘‘work-up’’ in the interdealer 

markets is important and data should 

not be reported to an SDR until the 

work-up process is completed.175

Similarly, this commenter argued that 

with regard to the ‘‘work-up’’ process, 

trading platforms should be able to 

share the last trade information to 

market participants prior to reporting 

such data to an SDR. 

Several commenters urged the 

Commission to require the 

consolidation of swap transaction and 


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176See CL–Coalition for Derivatives End-Users; 

CL–Better Markets; CL–Markit; CL–MarkitSERV; 

and CL–FINRA. 177See CL–FINRA. 178See 75 FR 76149. 179See 75 FR 75208. 180The Commission notes that, pursuant to 

§ 48.8(a)(9)(i), registered foreign boards of trade 

must ensure that swap transaction data be sent to 

an SDR that is either registered with the 

Commission or has an information sharing 

arrangement with the Commission. 

181The Commission does not intend that 

§ 43.3(b)(3) apply to risk management activities, 

post-trade processing or regulatory reporting where 

it would be necessary to transmit the full swap 

details to comply with such activities. 

182For the purposes of § 43.3(b)(3)(i), the 

Commission believes that market participants on a 

SEF or DCM include those persons with trading 

privileges on such platform, as well as others 

without trading privileges that subscribe to the SEF 

or DCM for information services. 

183The Commission seeks to avoid a situation 

that would permit discrimination among those 

market participants of a SEF or DCM. 

184For example, a SEF or DCM may provide 

advance notice by including a provision in its 

rulebook describing the disclosure of swap 

transaction and pricing data to market participants. 

185For example, advance notice is sufficiently 

given when an SD or MSP, prior to the execution 

of such publicly reportable swap transaction, 

informs a swap counterparty that it will disclose the 

relevant swap transaction and pricing data. 

pricing data.176 One commenter 

recommended that the Commission and 

the SEC jointly establish a single 

consolidator for the public 

dissemination of swap and securitybased swap transaction and pricing 

data.177 As the Commission noted in the 

Proposing Release, neither the CEA nor 

the Dodd-Frank Act grants the 

Commission explicit statutory authority 

to establish a real-time reporting 

consolidator.178 The SEC’s proposed 

Regulation SBSR similarly would 

require public dissemination of realtime swap data by SDRs and does not 

establish a consolidator.179

With respect to proposed 

§ 43.3(b)(1)(i) and comments addressing 

the use of SDRs for public 

dissemination, the Commission agrees 

with the majority of the commenters 

that third party service providers should 

not be used for public dissemination. 

Accordingly, the Commission is 

modifying the proposed rule to require 

that SEFs and DCMs satisfy the 

requirements of this subparagraph by 

transmitting swap transaction and 

pricing data to an SDR for public 

dissemination ‘‘as soon as 

technologically practicable’’ after such 

swap has been executed on the SEF or 

DCM.180 The Commission expects that 

‘‘transmittal’’ of such data would mean, 

at a minimum, some form of electronic 

conveyance. This change removes the 

requirement in proposed § 43.3(b)(1)(i) 

that SEFs and DCMs must publicly 

disseminate by sending data either to an 

SDR or to a third-party service provider. 

SEFs and DCMs may enter into a 

contractual relationship with a third 

party service provider to transmit the 

swap transaction and pricing data to an 

SDR; however, the SEF or DCM will 

remain responsible for such reporting 

requirement pursuant to part 43. 

In its Proposing Release, the 

Commission imposed public 

dissemination obligations on SDRs that 

accept and publicly disseminate swap 

transaction and pricing data in realtime. Further, CEA section 2(a)(13)(D) 

provides the Commission with the 

authority to require registered entities to 

publicly disseminate swap data. The 

Commission is further clarifying 

§ 43.3(b) by adding § 43.3(b)(2) to 

provide that SDRs must then ensure that 

such data is publicly disseminated as 

soon as technologically practicable’’ 

pursuant to part 43 for SEF and DCM 

executed swaps as well as off-facility 

swaps, unless a time delay described in 

§ 43.5 is applicable. The Commission 

believes that this approach addresses 

various commenters’ suggestions and 

concerns and is consistent with the 

SEC’s approach in proposed Regulation 

SBSR. The Commission further believes 

that eliminating the option to use a 

third-party service provider will reduce 

(i) fragmentation in the market; (ii) 

search costs for market participants; and 

(iii) inconsistencies in data formats 

reported to various disseminators. 

Additionally, SDRs will be registered 

entities subject to the Commission’s 

jurisdiction, whereas third-party service 

providers are unregistered entities over 

which the Commission has no authority. 

The Commission notes that the rule 

does not prohibit an SDR from 

contracting with a third party which 

may perform the public dissemination 

function. Should an SDR choose to enter 

into such a contractual relationship, it 

will remain responsible to ensure public 

dissemination under CFTC regulations. 

With respect to proposed 

§ 43.3(b)(1)(ii), the Commission has 

considered the comments and, as 

discussed, believes that reporting 

parties (including SEFs and DCMs) 

should be permitted to transmit their 

swap transaction and pricing data only 

to SDRs for public dissemination. 

Consistent with this determination, the 

Commission is eliminating in the final 

rule the option for SEFs, DCMs and 

reporting parties to send or otherwise 

electronically transmit their swap 

transaction and pricing data to a thirdparty service provider. However, the 

Commission believes that an SDR may 

ensure public dissemination by 

contracting with a third-party service 

provider to assist in the public 

dissemination of swap transaction and 

pricing data in real-time. Finally, in 

requiring that the reporting parties 

transmit the real-time swap transaction 

and pricing data only to SDRs, the 

Commission notes that nothing in part 

43 would prohibit DCOs, SEFs or DCMs 

from registering as SDRs. 

The Commission has considered the 

comments addressing the embargo rule 

and has determined to modify proposed 

§ 43.3(b)(3) to provide further clarity.181

Three clarifying criteria are established 

in the final rule: (1) Disclosure is made 

only to market participants on such SEF 

or DCM (changed from ‘‘participants on 

its market’’); 182 (2) market participants 

are provided advance notice of such 

disclosure; and (3) any disclosure must 

be non-discriminatory.183 A SEF or 

DCM that wishes to disclose swap data 

prior to the public dissemination by an 

SDR must provide advance notice to its 

market participants of any disclosure of 

such swap transaction and pricing 

data.184 The Commission also notes that 

this policy is consistent with the 

practice of public dissemination in the 

futures markets. Further, pursuant to 

§ 43.3(b)(3)(i)(A), SEFs and DCMs must 

not disclose such data prior to sending 

such data to an SDR for public 

dissemination. 

Section 43.3(b)(3)(ii) replaces 

proposed § 43.3(b)(2)(iii) and establishes 

data reporting requirements for SDs and 

MSPs reporting to their customer bases 

that are substantially similar to part 43’s 

data reporting requirements for SEFs 

and DCMs providing such information 

to their market participants. Section 

43.3(b)(3)(ii)(B) establishes that an SD’s 

or MSP’s ‘‘customer base’’ includes 

parties that maintain accounts with or 

have been swap counterparties with 

such SD or MSP. This provision also 

expands the scope of parties that can 

share such swap data to include MSPs, 

as the Proposing Release permitted only 

SDs to share such data. Section 

43.3(b)(3)(ii)(C) requires an SD or MSP 

to provide a swap counterparty to a 

publicly reportable swap transaction 

with advance notice of any disclosure 

by the SD or MSP of such swap 

transaction and pricing data.185 Further, 

SDs and MSPs must ensure that the data 

shared with their customer bases is not 

shared prior to sending such data to an 

SDR for public dissemination and that 

any disclosure is non-discriminatory. 

There are several advantages to this 

approach. Allowing participants to see 

last trade information for the particular 

markets on which they are trading, in 

many cases prior to the data being 

disseminated to the public, will 


tkelley on DSK3SPTVN1PROD with RULES2
1202 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 

186See 76 FR 54550; See also 76 FR 54582. 

Section 43.3(d), discussed below, does not prohibit 

an SDR from transmitting real-time swap 

transaction and pricing data to market participants 

at the same time that such data is publicly 

disseminated pursuant to part 43. However, as 

prescribed in § 49.17(g) of the Commission’s 

regulations, the distribution of such data prior to 

the public dissemination pursuant to part 43 would 

constitute a ‘‘commercial use’’ of such data. 

187The Commission received no comments on 

proposed § 43.3(c)(1). 

188See CL–GFXD; CL–DTCC; and CL– 

MarkitSERV. 

189See § 49.10(b) of the Commission’s regulations 

regarding SDRs which is identical to § 43.3(c)(2). 

190The Commission received no comments 

addressing proposed § 43.3(c)(3). 

191 In addition to the comments discussing the 

definitions of ‘‘as soon as technologically 

practicable’’ and ‘‘public dissemination or publicly 

disseminate,’’ one commenter stated that the 

Commission should consider the additional 

requirement that an SDR make available any realtime reporting data to all market participants, 

including SEFs, DCMs and DCOs on a nondiscriminatory basis. See CL-Tradeweb at 5 

(‘‘Without such requirements, the Commission is 

effectively taking away from market participants, 

including swaps markets and DCOs, a potentially 

significant and valuable component of their market 

data services.’’). 

enhance price discovery. Information is 

not delayed to market participants on a 

particular SEF or DCM. This approach 

does not allow the sharing of 

information by a trading facility or 

platform immediately upon execution, 

as one commenter suggested. However, 

the Commission believes that the 

requirement to send swap transaction 

and pricing data to an SDR 

simultaneously with or prior to sharing 

such information with persons with 

trading privileges will reduce potential 

inequities while incentivizing faster 

reporting by SEFs, DCMs, SDs and 

MSPs that wish to share such data. If 

real-time reporting is delayed as part of 

a phase in, or if no SDR is registered or 

provisionally registered in an asset 

class, the individual markets could 

share the information to allow for last 

trade information and post-trade price 

discovery on a particular SEF or DCM, 

until such time as compliance is 

required. 

The Commission notes that its part 49 

rules governing SDRs do not permit 

SDRs to use real-time data between the 

time they receive the data from SEFs, 

DCMs and reporting parties and the 

time they publicly disseminate the 

data.186

3. Requirements for Registered Swap 

Data Repositories in Providing the 

Public Dissemination of Swap 

Transaction and Pricing Data (§ 43.3(c)) 

As proposed, § 43.3(c) required that: 

(1) SDRs register and comply with the 

requirements set forth in proposed part 

49; (2) SDRs that accept and publicly 

disseminate real-time data for swaps in 

selected asset classes shall accept and 

publicly disseminate real-time data for 

all swaps within such asset classes; and 

(3) any SDR that accepts and publicly 

disseminates real-time data perform an 

annual independent compliance review. 

The Commission is adopting 

§ 43.3(c)(1) substantially as proposed 

with certain technical and conforming 

changes.187 For example, the phrase 

‘‘unless the data is subject to a time 

delay in accordance with § 43.5’’ was 

changed to state, ‘‘except as otherwise 

provided in this part.’’ Additionally, the 

language ‘‘in accordance with this part’’ 

was added as a clarification. 

Proposed § 43.3(c)(2) provided that if 

an SDR chose to publicly disseminate 

swap transaction and pricing data in 

real-time for a specific asset class, the 

SDR must accept all swaps within such 

asset class. The Commission received 

three comments 188 supporting this 

proposal; these commenters contended 

that such a provision would help avoid 

fragmentation of the SDR landscape. 

The Commission agrees that this 

provision will reduce fragmentation and 

is adopting § 43.3(c)(2) as proposed with 

some minor technical and conforming 

changes. For example, the phrase ‘‘and 

public dissemination’’ was added to the 

title of (c)(2), and the phrase ‘‘unless 

otherwise prescribed by the 

Commission’’ was added to the end of 

the text. The Commission also notes that 

the definition of ‘‘asset class’’ was 

revised in § 43.2.189

The Commission is adopting 

§ 43.3(c)(3) as proposed with one 

conforming change: ‘‘43’’ was added to 

the end of the text.190

4. Requirements for Third-Party Service 

Providers—Proposed § 43.3(d) 

Proposed § 43.3(d) established 

requirements for SEFs and DCMs that 

publicly disseminate through a thirdparty service provider. As discussed 

above, the Commission is requiring that 

public dissemination of swap 

transaction and pricing data for the 

purposes of part 43 occur through an 

SDR. This new requirement obviates 

proposed § 43.3(d), and the Commission 

is not adopting the provision. 

5. Availability of Swap Transaction and 

Pricing Data to the Public (§ 43.3(d)) 

Proposed § 43.3(e) required SDRs that 

report swap transaction and pricing data 

to the public in real-time to make the 

data available and accessible in an 

electronic format that is capable of being 

downloaded, saved and/or analyzed. 

Requiring that SDRs make swap 

transaction and pricing data available to 

market participants and the public 

ensures equal access such data.191

The Commission believes that 

additional clarity is needed with regard 

to proposed § 43.3(e)—which has been 

renumbered as § 43.3(d) in the final 

rules—and therefore is adopting 

§ 43.3(d)(1)–(3). Section 43.3(d)(1) is 

similar in substance to proposed 

§ 43.3(e); however, the Commission has 

clarified that the data must be in ‘‘a 

consistent, usable and machine-readable 

electronic’’ format that ‘‘allows the data 

to be downloaded, saved and analyzed.’’ 

These modifications address several 

comments relating to the definitions of 

‘‘public dissemination or publicly 

disseminate’’ by providing clarity with 

respect to the format in which publicly 

disseminated data must be made 

available. 

Section 43.3(d)(2) reflects the 

Commission’s belief that data must be 

made freely available to market 

participants and the public, on a nondiscriminatory basis. Finally, 

§ 43.3(d)(3) requires that SDRs provide 

the Commission with a hyperlink to a 

Web site where the public can access 

the publicly-disseminated swap 

transaction and pricing data. The 

Commission anticipates that it will 

make these links available to the public 

on its own Web site. In this manner, the 

Commission will provide a centralized 

location where market participants and 

the public can find all available swap 

transaction and pricing data, thus 

enhancing price discovery. 

6. Errors or Omissions (§ 43.3(e)) 

As proposed, § 43.3(f) outlined the 

process for correcting or cancelling any 

errors or omissions in swap transaction 

and pricing data that are publicly 

disseminated in real-time. Proposed 

§ 43.3(f)(1) established the process by 

which such errors or omissions must be 

corrected or cancelled, depending on 

whether the data error or omission was 

discovered by the reporting party to the 

swap or the non-reporting party. The 

Proposing Release also sought to 

prevent fraudulent dissemination for the 

purpose of distorting market pricing. 

Specifically, pursuant to proposed 

§ 43.3(f)(2) reporting parties, SEFs, 

DCMs and SDRs that accept and 

publicly disseminate swap transaction 

and pricing data in real-time were 

prohibited from submitting or agreeing 

to submit a cancellation or correction 

for the purpose of re-reporting swap 

transaction and pricing data in order to 

gain or extend a delay in publication or 


tkelley on DSK3SPTVN1PROD with RULES2
Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 1203 

192See CL–MFA. 

193See CL–GFXD; CL–ISDA/SIFMA. 

194See CL-ISDA/SIFMA; CL–Working Group of 

Commercial Energy Firms. 

195See CL–ISDA/SIFMA. 

196See CL–MFA. 

197See CL–GFXD; CL–ISDA/SIFMA. 

198See CL–AGA. 

to otherwise evade the reporting 

requirements of proposed part 43. 

Proposed § 43.3(f)(3) specified the 

appropriate method of canceling 

incorrectly published swap transaction 

and pricing data, providing that a realtime disseminator must cancel incorrect 

data that has been disseminated to the 

public by publishing a cancellation in 

the format and manner described in 

appendix A to proposed part 43. As 

proposed, the rule would have required 

a real-time disseminator to correct any 

erroneous or omitted data disseminated 

by (i) first publicly disseminating a 

cancellation of the incorrect data; and 

(ii) then publicly disseminating the 

correct data pursuant to the format 

described in appendix A to proposed 

part 43. In addition to the substantive 

changes discussed below, the 

Commission has determined to make 

minor technical and conforming 

changes to § 43.3. In that regard, 

proposed § 43.3(f) is redesignated as 

§ 43.3(e) in the final rule and will be 

referred to accordingly below. 

The Commission received five 

comments addressing the proposed 

treatment of errors and omissions in 

real-time reporting of swap transaction 

and pricing data. The commenters— 

industry groups and a non-financial 

end-user—generally supported the 

Proposing Release that errors and 

omissions should be reported ‘‘as soon 

as technologically practicable.’’ 

However, one commenter suggested that 

in the event of a dispute between 

counterparties regarding the reported 

data, the reporting party would control 

the public record regarding the swap 

and thus would always prevail. The 

commenter further urged that the nonreporting party should be permitted to 

report the disputed data to the SEF, 

DCM or ‘‘real-time disseminator,’’ who 

would then be obliged by rule to review 

the disputed data.192 Two commenters 

contended that the proposed 

requirement that the cause of the error 

or omission be included in any 

correction was unnecessary. These 

commenters suggested that reporting 

parties should not be responsible for 

data that is inaccurately transcribed or 

corrupted after it has been submitted to 

an SDR or for correcting data errors of 

which they are unaware.193

One commenter recommended that 

cancellations not due to an error in the 

primary economic terms should not be 

required to be reported in real time, but 

should instead be reported in 

accordance with requirements specified 

in the general reporting rule.194

Two commenters noted that longer 

reporting times would reduce errors. In 

this regard, they asserted that the 

proposed reporting times are more 

‘‘aggressive’’ than those that the 

industry has committed to in the past, 

and may lead to an increase in reporting 

errors.195 One commenter suggested a 

reporting time of T+1,196 while another 

suggested that the Commission balance 

the sometimes competing needs of 

reporting speed and data accuracy in 

proposing timeframes for regulatory 

reporting.197 Another recommended 

that the Commission explicitly state in 

the final rule that it will not prosecute, 

penalize or otherwise impose 

‘‘remedies’’ on parties for inadvertent 

errors in reporting under any new 

standardized information collection 

system required by the final rules.198

In response to comments suggesting 

that the non-reporting party should be 

permitted to submit errors or corrections 

in the case of a dispute between the 

non-reporting party and the reporting 

party, the Commission believes that 

dispute resolution mechanisms should 

be exercised before the data is sent back 

to an SDR for public dissemination. In 

its view, the execution platform or the 

parties to the swap are in the best 

position to determine whether an error 

has been made in public dissemination 

and to agree upon the corrected swap 

transaction and pricing data. The 

Commission is deleting in final 

§ 43.3(e)(1)(i) references to the 

‘‘reporting party’’ and is requiring 

instead that one party to a swap must 

notify the other party if it becomes 

aware of an error or omission. As 

described in § 43.3(e)(1)(ii), the 

reporting party remains responsible for 

submitting corrections and 

cancellations. 

The Commission is adopting 

§ 43.3(e)(1)(ii) with clarifications to 

certain terminology changed in the rule 

(e.g., references to real-time 

disseminator are eliminated). This 

provision requires that the reporting 

party submit corrections to the same 

SEF, DCM or SDR to which that data 

was originally submitted for the 

purposes of reporting. The reporting 

party may report corrections to a SEF or 

DCM if it becomes aware that the SEF 

or DCM submitted incorrect data to an 

SDR for public dissemination for a swap 

executed on the platform or if the 

reporting party submitted the data to a 

SEF or DCM with respect to a block 

trade. The Commission notes that 

pursuant to CEA section 21(c)(2), an 

SDR has a duty to ‘‘confirm with both 

counterparties to a swap the accuracy of 

the data that was submitted.’’ 

The Commission is adopting 

§ 43.3(e)(1)(iii)–(iv) and § 43.3(e)(2)–(4) 

with technical and clarifying changes. 

For example, in § 43.3(e)(3), a 

clarification has been added that 

cancellations must be publicly 

disseminated by an SDR ‘‘as soon as 

technologically practicable’’ to mirror 

the requirements for corrections in 

§ 43.3(e)(4). 

Several comments suggested that the 

Commission omit from the final rule the 

requirement that the reason for any 

amendment to swap transaction and 

pricing data be reported during the 

correction process. The Commission 

notes that there is no requirement in 

§ 43.3(e) that such information be 

included in any type of correction or 

cancellation report. The Commission 

requires that any correction of incorrect 

data that has been publicly 

disseminated must be reported in the 

same format as all other data reported 

under part 43, ‘‘as soon as 

technologically practicable’’ and as set 

forth in appendix A to part 43. 

The Commission agrees that the 

reporting parties should not be 

responsible for data that is inaccurately 

transcribed or corrupted after it has 

been submitted to an SDR. However, the 

Commission expects that reporting 

parties will take due care to ensure that 

the data submitted to an SDR is accurate 

and complete. Under § 43.3(a)(2), a 

reporting party has satisfied its 

reporting requirement ‘‘by executing a 

publicly reportable swap transaction on 

or pursuant to the rules of a registered 

swap execution facility or designated 

contract market.’’ For off-facility swaps, 

§ 43.3(a)(3) provides that a reporting 

party has satisfied its reporting 

requirement when the swap has been 

‘‘reported to a registered swap data 

repository for the appropriate asset 

class.’’ Once the data have been 

reported in accordance with the relevant 

provision, the reporting party has 

satisfied its reporting requirement under 

this section and will not be responsible 

for correction of subsequent 

inaccuracies in said data; no additional 

modification is necessary. 

The Commission considered the 

comment that cancellations not due to 

an error in the primary economic terms 

need not be reported in real time. The 

Commission does not agree with the 

suggestion that the correction of errors 


tkelley on DSK3SPTVN1PROD with RULES2
1204 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 

199The Commission has the ability to review all 

error and omission reports and is authorized under 

the CEA and Commission regulations to investigate 

and prosecute false reports. 

200See CL–Working Group of Commercial Energy 

Firms. 

201See CL–DTCC. 

202See CL–CME. 

203The Commission notes that the CEA does not 

require SDRs to have any scheduled down time. 

204By requiring SDRs to operate continuously for 

the purposes of the real-time public reporting 

requirements of part 43, market participants will be 

less likely to execute during SDR downtimes in 

order to delay public dissemination of swap 

transaction and pricing data. 

in data reported under part 43 should be 

reported pursuant to a periodic 

reporting schedule. The correction of 

errors or omissions in real time is 

necessary to fulfill the price discovery 

mandate of Section 727 of the DoddFrank Act. In addition, depending on 

the circumstance, a cancellation may or 

may not be followed by a correction. For 

example, a cancellation may occur 

where a clearinghouse does not accept 

a particular swap for clearing: Such a 

swap may be busted and would not 

require a correction. In another 

situation, one or more terms to a swap 

may be incorrectly reported by the 

reporting party, and the error would be 

realized upon confirmation of the swap. 

Under the final rules, such a 

circumstance would require a 

cancellation of the original—incorrectly 

reported—data, followed by a correction 

with accurate swap transaction and 

pricing data. When reporting a 

cancellation or correction, the SDR must 

report the data in the same form and 

manner in which it was originally 

reported and include a date stamp 

reflecting the time of the original 

transaction, so that market participants 

and the public are aware of which swap 

has been canceled or corrected. 

The Commission agrees that a longer 

reporting time would reduce reporting 

errors. Section 43.5 (‘‘Time delays for 

public dissemination of swap 

transaction and pricing data’’) provides 

initial timeframes for reporting swap 

transaction and pricing data during an 

initial interim period. These timeframes 

will provide additional time for 

reporting. The Commission believes that 

longer reporting times during the phase 

in period should allay concerns about 

errors resulting from speed of reporting 

and should also provide market 

participants and registered entities with 

the necessary time to develop 

appropriate systems to reduce errors in 

the reporting process. 

One commenter requested an explicit 

undertaking from the Commission that 

it will not prosecute, penalize or 

otherwise impose ‘‘remedies’’ on parties 

for inadvertent errors in reporting under 

any new standardized information 

collection system required by the final 

rules. Such relief is not appropriately 

part of a rulemaking. Parties seeking 

such relief may do so pursuant to the 

no-action procedures of § 140.99.199

7. Hours of Operation of Registered 

Swap Data Repositories (§ 43.3(f)) 

Proposed § 43.3(g)(1) specified that an 

SDR that accepts and publicly 

disseminates real-time data must be able 

to do so twenty-four hours a day. 

However, proposed § 43.3(g)(2) 

permitted an SDR to declare special 

closing hours to perform maintenance 

on an ad hoc basis. Such closing would 

require advance notice by the SDR to 

market participants and the public. 

Proposed § 43.3(g)(3) further provided 

that special closing hours should not be 

scheduled during periods when the U.S. 

markets and major foreign swap markets 

are most active. Proposed § 43.3(h) 

provided that during special closing 

hours, an SDR that is a real-time 

disseminator must have the capability to 

receive and hold in queue information 

regarding ‘‘reportable swap 

transactions.’’ 

The Commission received three 

comments regarding an SDR’s hours of 

operation. One commenter suggested 

that the real-time disseminator should 

operate continuously in light of the 

global nature of derivatives markets and 

participation by non-U.S. persons.200

Another stated that SDRs should operate 

24 hours a day, six days a week to 

permit continuous access to data by 

regulators (including during periods 

where individual exchanges or other 

trading platforms are closed). Requiring 

such operating hours recognizes the 

global nature of trading in derivatives 

markets and the round-the-clock 

participation in these markets by U.S. 

persons.201 The third commenter 

suggested that scheduled downtime 

should be permitted so that the ‘‘realtime disseminator’’ could perform 

routine maintenance and to mark the 

beginning and end of the trading day. 

This commenter also stated that the 

downtime periods should extend for no 

less than 30 minutes and should be 

scheduled for time periods that are least 

disruptive (i.e., when market activity is 

at low levels).202

The Commission agrees that the 

global nature of the swaps market 

requires that an SDR be able to publicly 

disseminate swap transaction and 

pricing data at all times and believes 

that SDRs that publicly disseminate 

swap transaction and pricing data 

should be fully operational 24 hours a 

day, 7 days a week.203 Accordingly, in 

addition to minor technical changes— 

including the redesignation of proposed 

§ 43.3(g)(1) as § 43.3(f) in the final rule— 

the Commission has amended the 

proposed rule to add: ‘‘Unless otherwise 

provided in this subsection,’’ a 

registered swap data repository ‘‘shall 

have systems in place to continuously 

receive and publicly disseminate swap 

transaction and pricing data in real time 

pursuant to this part.’’ 

The Commission also agrees that 

scheduled downtime should be 

permitted to allow the SDR to perform 

routine maintenance and that these 

periods should be scheduled during 

time periods that are least disruptive 

(i.e., when market activity for the asset 

class of the SDR is low). Accordingly, 

the Commission is adopting in 

§ 43.3(f)(2) a provision that the SDR 

should, to the extent reasonably 

possible, avoid scheduling closing hours 

when, in its estimation, the U.S. market 

and major foreign markets are most 

active. However, the Commission does 

not believe it is necessary to close an 

SDR daily to mark the beginning and 

end of the trading day. The Commission 

also disagrees that SDRs should operate 

24/6 and believes that such continuous 

operating hours are appropriate given 

the global nature of trading 

derivatives.204

In addition to minor technical 

changes, the Commission is deleting the 

reference to closing ‘‘on an ad hoc 

basis’’ with regard to ‘‘special closing 

hours.’’ Instead, § 43.3(f)(1) refers only 

to ‘‘closing hours.’’ These changes allow 

SDRs to properly maintain their systems 

while also providing advance notice of 

scheduled downtime to market 

participants and the public. 

During these downtimes, SDRs must 

hold the data for public dissemination 

in queue and release the information 

with the appropriate execution 

timestamp upon re-opening. Any 

downtime by an SDR should be publicly 

announced, with adequate notice to the 

market, and should occur at a time 

when there is anticipated low market 

activity, which may vary based on asset 

class. Further, the Commission strongly 

encourages SDRs to adopt redundant 

systems to allow public reporting during 

closing hours. 

The Commission intends to ensure 

that SDRs will provide market 

participants and the public with 

sufficient notice of closing hours. To 

that end, the Commission is adopting 

new § 43.3(f)(3) to provide that: ‘‘A 


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Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 1205 

205Section 40.1(i) includes in the definition of 

‘‘rule’’ both ‘‘stated policy’’ and ‘‘terms and 

conditions.’’ Further, § 40.1(j)(1)(iv) defines ‘‘terms 

and conditions’’ to include trading hours. 76 FR 

44776 at 44791 (July 27, 2011). 

206Section 40.4(b)(3) provides that changes in 

trading hours may be implemented without prior 

approval of the Commission, as long as such 

changes have been submitted for self-certification as 

required under the procedures of § 40.6(a). See 76 

FR 44776, 44793 (July 27, 2011). 

207The Commission’s part 40 regulations include 

a process by which registered entities may certify 

rules or rule amendments that establish standards 

for responding to an emergency. 

208For example, an SDR could provide notices to 

its participants or publicize its closing hours in a 

conspicuous place on its Web site. 

209As previously noted, the Commission is not 

required to provide schedule closing times for 

SDRs. 

210 In addition to these changes, the Commission 

has made minor technical and conforming changes 

to this section. For example, proposed § 43.3(g) 

(‘‘Hours of Operation’’) is renumbered as § 43.3(f) in 

the final rules; proposed § 43.3(h) (‘‘Acceptance of 

data during special hours) is redesignated as 

§ 43.3(g). 

211See, e.g., CL–FSR. 

212See CL–WFE; CL–Working Group of 

Commercial Energy Firms. 

213See CL–Working Group of Commercial Energy 

Firms; CL–NFPEEU. 

214See CL–NFPEEU. 

215See CL–Working Group of Commercial Energy 

Firms. 

216See id.; See also 75 FR 76574. 

217 In addition, registered entities are also subject 

to the swap recordkeeping provisions of proposed 

§ 45.2. Proposed § 45.2 sets forth the swap 

transaction records that shall be kept by all parties 

subject to the Commission’s jurisdiction and the 

manner and form in which such records should be 

kept, including relevant timeframes for retention 

and access. 

218See CL–DTCC. 

registered SDR shall comply with the 

requirements under part 40 of the 

Commission’s regulations in setting 

closing hours and shall provide advance 

notice of its closing hours to market 

participants and the public.’’ 

The Commission previously has 

deemed policies such as trading hours 

to be ‘‘rules’’ as that term is defined in 

§ 40.1(i) of the Commission’s 

regulations.205 Accordingly, an SDR is 

required under part 40 to self-certify its 

rules, including the establishment and 

modification of trading hours.206 The 

self-certification process under § 40.6 

includes posting notice on the SDR’s 

Web site.207 However, compliance with 

the part 40 provisions alone may not 

suffice to meet the notice requirement 

under § 43.3(f)(3), which requires an 

SDR to provide reasonable advance 

notice to participants and the public of 

its closing hours.208

8. Acceptance of Data During Closing 

Hours (§ 43.3(g)) 

Proposed § 43.3(h) required that an 

SDR have the capability to receive and 

hold in queue information regarding 

‘‘reportable swap transactions’’ during 

special closing hours. Consistent with 

comments addressing hours of 

operation, the Commission is adopting 

§ 43.3(g) and adding §§ 43.3(g)(1) and (2) 

to an SDR’s responsibilities to accept 

data during closing hours.209

The Commission is adopting 

§ 43.3(g)(1) to clarify that an SDR must 

publicly disseminate the data that it has 

held in queue during closing hours 

promptly upon reopening after closing 

hours. The Commission anticipates that 

there may be circumstances in which an 

SDR is unable to receive and/or hold 

swap transaction and pricing data in 

queue during downtime. To ensure that 

market participants and the public 

receive timely notice of any failure to 

hold data in queue, the Commission is 

adding § 43.3(g)(2) which requires the 

SDR, upon reopening, to issue notice 

that it has resumed normal operations in 

such cases where data was not held in 

queue. The Commission believes that 

such notice should be provided for all 

market participants. Such notice must 

state that the SDR resumed normal 

operations but was unable, while closed 

or for some other reason, to receive and 

hold in queue such transaction 

information. Further, § 43.3(g)(2) 

requires that upon receiving such 

notice, any SEFs, DCMs or reporting 

parties whose data was so ‘‘lost’’ shall 

re-report the data to the SDR 

immediately.210

9. Timestamp Requirements (§ 43.3(h)) 

Proposed § 43.3(i) required that all 

data related to a ‘‘reportable swap 

transaction’’ be maintained for a period 

of not less than five years following the 

time at which the transaction data is 

publicly disseminated pursuant to part 

43. Specifically, proposed § 43.3(i)(1) 

required that SEFs and DCMs retain all 

swap transaction information received 

from reporting parties for the purposes 

of public dissemination, including block 

trade and large notional swap data. As 

proposed, § 43.3(i)(2) directed that SDs 

and MSPs retain swap transaction and 

pricing information in accordance with 

proposed part 43 and proposed part 23. 

The Commission received seven 

comments from various interested 

parties, including industry associations 

and a potential SDR, with respect to 

proposed § 43.3(i).211 Two commenters 

asserted that recordkeeping standards 

should be coordinated internally 

between Commission rulemakings as 

well as externally with the SEC and 

international regulators.212 Some 

commenters focused on perceived 

burdens to end-users, asserting that that 

the costs and burdens of recordkeeping 

for end-users would be very high for 

less-technologically-sophisticated endusers, and that further clarification is 

necessary with respect to the precise 

data that should be retained by endusers.213 One commenter recommended 

that this clarification should be written 

in clear, easy-to-understand terms, and 

that the final rules should provide for a 

‘‘CFTC-lite’’ regulatory scheme for 

commercial end-users.214

A commenter stated that § 1.31 of the 

Commission’s regulations is outdated 

and should not be applied to the 

proposed recordkeeping rules under this 

part.215 This commenter further 

recommended that data retention 

should be triggered by the execution of 

the swap transaction, as proposed in the 

part 45 rules, and not upon public 

dissemination.216

The Commission does not believe that 

§ 1.31 of the Commission’s regulations 

is outdated and inappropriate to the 

proposed recordkeeping rules. On the 

contrary, § 1.31 provides that books and 

records be kept for a period of five years 

from the date such records are created. 

In addition, this section provides that 

records must be readily accessible 

during the first two years of the five year 

period. Adopting proposed § 43.3(i) 

would duplicate the existing 

recordkeeping requirements of § 1.31. 

217 Further, in response to other 

commenters, the Commission does not 

believe that a ‘‘CFTC-lite’’ regulatory 

scheme for commercial end-users is 

contemplated by the Dodd-Frank Act. 

The Commission also disagrees that 

data retention should be triggered by 

termination of the publicly reportable 

swap transaction. Real-time data will 

have been publicly disseminated upon 

affirmation and there would be no 

requirement to maintain the data in the 

interim period. However, the 

Commission does see merit in the 

comment that real-time data should be 

retained for an appropriate period from 

the date of the price-forming event to 

allow re-publication of historic price 

data and support the error correction 

process.218 Proposed § 45.2(c) explicitly 

states that all records required to be kept 

for a swap shall be kept ‘‘from the date 

of the creation of the swap through the 

life of the swap and for a period of at 

least five years from the final 

termination of the swap, in a form and 

manner acceptable to the Commission.’’ 

Therefore, as required by § 1.31 and 

proposed part 45, real-time swap 

transaction and pricing data will be 


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219See CL–ISDA/SIFMA. 

220The conforming changes to these sections 

include changing the phrases ‘‘a swap market and 

a registered swap data repository’’ to ‘‘a registered 

swap execution facility or designated contract 

market’’; ‘‘real-time disseminator’’ to ‘‘registered 

swap data repository’’; and ‘‘swap market or 

reporting party’’ to ‘‘registered swap execution 

facility, designated contract market or reporting 

party’’ to more accurately reflect the terms as 

defined in § 43.2. 

221The circumstance described in § 43.3(h)(1)(i) 

may occur when a block trade is executed away 

from a SEF or DCM, but pursuant to the rules of 

a SEF or DCM. The SEF or DCM would need to 

record a timestamp of when it received such data 

from a swap counterparty pursuant to its rules. 

222The Commission anticipates that the 

timestamp requirements in § 43.3(h)(3) would likely 

apply only in the case of off-facility swaps and 

price-forming continuation data in which the SD or 

MSP is the reporting party. 

retained for a period of five years after 

the termination of the swap. 

After considering comments and the 

recordkeeping requirements in both the 

Commission’s existing regulations and 

proposed part 45 rules, the Commission 

has determined to limit the 

recordkeeping requirements in part 43 

to timestamps. The Commission agrees 

that the recordkeeping and data 

retention requirements should be 

coordinated between CFTC 

rulemakings, particularly the data 

recordkeeping and reporting rules. The 

Commission believes that the 

recordkeeping provision in proposed 

§ 43.3(i) is duplicative of recordkeeping 

requirements found in other proposed 

Commission regulations (e.g., proposed 

part 45 and proposed part 23 

recordkeeping requirements) and is 

therefore not adopting proposed 

§ 43.3(i). The Commission believes that 

eliminating this provision addresses 

commenters’ concerns relating to the 

cost burden of maintaining data beyond 

the data retained in the ordinary course 

of business and eliminates duplicative 

recordkeeping requirements. 

The Commission believes that there is 

a need for SEFs, DCMs, SDRs, SDs and 

MSPs to record and maintain certain 

timestamps regarding the transmission 

and dissemination of real-time swap 

transaction and pricing data. 

The Commission’s proposed block 

trading rules included a requirement in 

§ 43.5(f) that SEFs and DCMs timestamp 

swap transaction and pricing data with 

the date and the time to the nearest 

second. Additionally, and as discussed 

with respect to appendix A to part 43 

below, the Commission proposed that 

an ‘‘execution timestamp’’ be publicly 

disseminated for all ‘‘reportable swap 

transactions.’’ As discussed above, the 

Commission has determined not to 

adopt the proposed rules establishing 

appropriate minimum size for block 

trades at this time; proposed § 43.5(f) 

has been redesignated as § 43.3(h) 

(‘‘Timestamp Requirements’’). As 

proposed, § 43.5(f)(1) and appendix A to 

part 43 required SEFs and DCMs to 

timestamp swap transaction and pricing 

data with the date and time to the 

nearest second. 

The Commission received two 

comments objecting to the timestamp 

reporting requirement as unreasonable 

and inconsistent with current market 

practice. One commenter also suggested 

that the value derived by moving the 

industry to Coordinate Universal Time 

(‘‘UTC’’) appears minimal when 

compared to the costs involved.219 The 

Commission recognizes that reporting 

the timestamp to the second is not 

current industry practice in some asset 

classes and may incur some 

technological and cost challenges. 

However, a timestamp to the second is 

necessary both for audit trail and 

enforcement purposes and to provide 

market participants and the public with 

sufficient information to re-create a 

trading day. The Commission will also 

use the timestamps described in 

§ 43.3(h) to determine whether swaps 

are being reported ‘‘as soon as 

technologically practicable’’ and to 

compare the speed at which similar 

market participants report swap 

transaction and pricing data to an SDR 

for public dissemination. Additionally, 

the Commission will be able to 

determine how quickly SDRs are 

publicly disseminating the information 

that they receive for public 

dissemination. 

The execution timestamp, described 

in appendix A to part 43, is critical for 

SDRs in determining when to publicly 

disseminate swap transaction and 

pricing data that is subject to a time 

delay pursuant to § 43.5. Different 

market participants and different types 

of execution may be assigned different 

time delays, so the execution timestamp 

that is publicly disseminated will be an 

important aid in following the order of 

execution of transactions within a 

particular market. 

Notwithstanding potential costs to the 

industry, the Commission believes that 

movement to UTC will facilitate the 

ability for market participants and the 

public to harmonize swap transactions 

across the global market. The 

Commission notes that use of UTC in 

the part 43 rules refers only to the 

execution timestamp that is publicly 

disseminated. Consistency across the 

global swaps market will better enhance 

price discovery, and the Commission 

believes that requiring UTC will allow 

market participants and reporting 

parties to recreate the order of trades, 

provide consistency across all publicly 

disseminated swap transaction and 

pricing data and reduce the need for 

market participants to convert different 

transaction times to understand the 

order of trades in a particular market. 

For the reasons discussed above, the 

Commission is adopting the timestamp 

requirements as proposed in § 43.5(f), 

with certain modifications, as § 43.3(h). 

First, the Commission has clarified that 

the timestamps in § 43.3(h) are in 

addition to the execution times in 

appendix A to part 43. Further, the 

Commission is not limiting these 

timestamp requirements to block trades 

and large notional off-facility swaps, as 

in the Proposing Release, but rather is 

requiring such timestamps for all 

publicly reportable swap transactions. 

The Commission has also made 

conforming changes to proposed 

§ 43.5(f)(1)–(3) which are reflected in 

§ 43.3(h)(1), (2) and (4).220 In 

§ 43.3(h)(1)(i), the Commission has 

changed the term ‘‘reporting party’’ to 

‘‘swap counterparty’’ since block trades 

must be reported pursuant to the rules 

of a SEF or DCM.221

The Commission has added 

§ 43.3(h)(3) and (4) to require that SDs 

and MSPs record and maintain for a 

period of at least five years a timestamp 

reflecting when data is sent to an SDR 

for public dissemination.222

The commenters’ concerns with 

respect to the costs and burdens of 

recordkeeping on end-users also have 

merit. Accordingly, the Commission has 

determined that, other than the 

timestamp requirements of § 43.3(h), no 

additional recordkeeping burdens will 

be placed upon end-users under part 43. 

The Commission agrees that the 

recordkeeping requirements should be 

harmonized with the SEC. Many 

registered entities, SDs and MSPs will 

be dually registered with the 

Commission and the SEC, and they will 

comply with the agency regime that has 

more robust recordkeeping standards. 

Finally, the Commission acknowledges 

that coordination with international 

regulators will also be necessary in their 

rulemaking processes and commits that 

it will continue to do so. 

10. Fees Charged by SDRs (§ 43.3(i)) 

The Commission interprets CEA 

sections 2(a)(13) and 21 to require that 

SDRs ensure open and equal access to 

their data collection services for the 

purpose of real-time reporting. 

Consistent with this interpretation, the 

Commission proposed in § 43.3(j) that 

fees charged by a real-time disseminator 

to reporting parties, SEFs or DCMs 

should be equitable and nondiscriminatory, and that volume 


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223See CL–MarkitSERV. 

224See CL–Better Markets. 

225See CL–BlackRock; CL–MarkitSERV. 

226See CL–Tradeweb. 

227See CL–Markit; CL–DTCC. 

228See CL–Tradeweb. 

229See CL–Working Group of Commercial Energy 

Firms. 

230See CL–DTCC. 

231See CL–ICE. 

232See CL–BlackRock. 

233See CL–Tradeweb. 

234See CL–Working Group of Commercial Energy 

Firms. 

235Section 49.17(g) of the Commission’s 

regulations governs the commercial use by SDRs of 

both core regulatory data and real-time publicly 

reported data; § 49.17(g)(3) explicitly prohibits the 

commercialization by SDRs of publicly 

disseminated swap transaction and pricing data 

prior to the public dissemination of such data 

pursuant to part 43. 

236The Commission notes that the rule has been 

redesignated as § 43.3(i). 

237One commenter recognized that § 43.4(b) does 

not require the public dissemination of any 

counterparty-identifying information. See CL–MFA. 

238See CL–MFA; CL–ABC/CIEBA. 

239See CL–MFA. 

240Proposed § 43.4(d) stated that the 

‘‘Commission may determine from time to time to 

amend the data fields described in appendix A to 

this part.’’ 

241As noted, Congress required that such rules 

‘‘ensure that the public reporting of swap 

transaction and pricing data does not disclose the 

names or identities of the parties to the 

Continued 

discounts for data collection shall not be 

offered, unless available to all reporting 

parties. 

The Commission received ten 

comments related to fees charged by an 

SDR for their public dissemination 

services. A market data vendor 

suggested that the Commission permit 

SDRs to employ the sell-side-pays 

model, or alternatively, a structure that 

requires only the reporting party to pay 

SDR fees.223 Another commenter 

criticized proposed § 43.3(j) for 

permitting volume discounts; 224 while 

others urged that the Commission 

monitor what is ‘‘fair and 

reasonable.’’ 225 A commenter 

recommended that the Commission 

clarify that nothing in its rules is 

intended to impose or imply any limit 

on the ability of market participants— 

including parties to the transaction, 

SEFs and DCOs—to use and/or 

commercialize data they create or 

receive in connection with the 

execution or reporting of swap data, so 

long as it is consistent with their 

confidentiality obligations.226 Two 

commenters stated that the final rules 

should clarify that ownership of data is 

retained by the counterparties to the 

swap and does not transfer to a SEF, 

DCM or SDR.227 Another requested 

clarification that market participants 

may use and/or commercialize real-time 

swap transaction and pricing data.228

Finally, several commenters stated that 

SDRs should not charge reporting 

parties since they will receive fees from 

the sale of such data to the public.229

A commenter stated that it currently 

provides data to the public free of 

charge and expects to continue to do so 

when satisfying its part 43 

obligations.230 Another commenter 

urged that SDRs be allowed to charge 

commercially reasonable fees to 

disseminate data, because otherwise 

there would be no incentive to improve 

systems to the detriment of 

transparency.231 A commenter urged 

that the Commission monitor the fee 

setting of entities under its jurisdiction 

to ensure that fees are fair and 

reasonable and do not favor any class of 

participant at the expense of others.232

Some commenters suggested that the 

fees collected by SDRs relating to public 

dissemination of swap transaction and 

pricing data should be redistributed to 

reporting parties; 233 other commenters 

stated that such fees should be remitted 

to the Commission to offset the costs of 

implementing the Dodd-Frank Act. 234

The Commission emphasizes that 

section 727 of the Dodd-Frank Act 

explicitly requires public dissemination 

of such data. The Commission believes 

that implicit in this mandate is the 

requirement that the data be made 

available to the public at no cost. On the 

other hand, however, the Commission 

believes it is reasonable to permit an 

SDR that publicly disseminates swap 

transaction and pricing data to charge 

fair and reasonable fees to providers of 

swap transaction and pricing data to 

offset the costs associated with public 

dissemination of those data. Further, 

nothing in these rules would prohibit 

SDRs responsible for the public 

dissemination of real-time swap data 

from making commercial use of such 

data subsequent to public dissemination 

of those data.235

With regard to specific fee 

arrangements, the Commission believes 

such matters are business decisions best 

left to the parties. Further, the 

Commission believes that issues of data 

ownership are outside the scope of this 

rulemaking. 

For these reasons, the Commission is 

adopting proposed § 43.3(j) with minor 

technical amendments 236 and 

additional language to clarify that 

volume-based discounts offered to any 

reporting party must be made available 

to all reporting parties. 

D. Section 43.4—Swap Transaction and 

Pricing Data To Be PubliclyDisseminated in Real-Time 

1. In General (§ 43.4(a)) 

Proposed § 43.4(a) provided that swap 

transaction information must be 

reported to a real-time disseminator so 

that the real-time disseminator could 

publish swap transaction and pricing 

data in accordance with part 43. As 

explained more fully in the discussion 

of § 43.3(b), the Commission has 

concluded that third party service 

providers should not be used for public 

dissemination and that instead real-time 

swap transaction and pricing data 

should be reported to SDRs for public 

dissemination. Accordingly, § 43.4(a) is 

amended to eliminate the reference to 

‘‘real-time disseminator’’ and replace it 

with ‘‘registered swap data repository’’ 

and to remove the phrase ‘‘and format 

requirements.’’ 

2. Public Dissemination of Data Fields 

(§ 43.4(b)) 

The Commission is adopting this 

section as proposed, with minor 

conforming changes.237

3. Additional Swap Information 

(§ 43.4(c)) 

The Commission is adopting this 

section as proposed, with minor 

technical and conforming changes. For 

example, ‘‘match’’ is changed to 

‘‘compare’’ and the phrase ‘‘that accepts 

and publicly disseminates swap 

transaction and pricing data in real-time 

on a transactional or aggregate basis’’ is 

removed from the end of the text. 

4. Amendments to Data Fields 

(Proposed § 43.4(d)) 

Two commenters questioned the 

Commission’s authority to summarily 

modify the data fields described in 

appendix A to proposed part 43 without 

the opportunity for notice and 

comment.238 One commenter indicated 

that any changes to data fields should 

not include the publication of 

identifying information.239

The Commission agrees that any 

changes to the data fields should reflect 

careful consideration and should not 

result in the publication of identifying 

information. Accordingly, the 

Commission is not adopting proposed 

§ 43.4(d) (‘‘Amendments to data 

fields’’).240

5. Anonymity of the Parties to a Publicly 

Reportable Swap Transaction (§ 43.4(d)) 

CEA section 2(a)(13)(E)(i) requires the 

Commission to protect the identities of 

counterparties to mandatorily cleared 

swaps, swaps excepted from the 

mandatory clearing requirement and 

voluntarily cleared swaps.241 Similarly, 


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transactions.’’ See Statement of Sen. Blanche 

Lincoln supra note 15. 

242Such provision does not cover swaps that are 

determined to be required to be cleared but are not 

cleared. 

243 Given the importance of protecting the 

identities of the parties to a swap and the business 

transactions and market positions of market 

participants, and pursuant to its authority under 

CEA section 2(a)(13)(B), the Commission in 

adopting part 43 has considered the protection of 

the anonymity for all swaps, both cleared and 

uncleared. 

244Real-Time NPRM supra note 6, at 76150— 

76151. 

245Real-Time NPRM supra note 6, at 76151. 

246 Id. 

247See Real-Time NPRM supra note 6. 

248Real-Time NPRM supra note 6, at 76174. 

249See CL–Coalition of Energy End-Users. 

250See CL–FHLBanks. 

251See CL–Dominion; CL–ATA; and CL–EMUS. 

252See CL–MS; CL–EMUS; CL–Argus. 

253See CL–Dominion. 

254See CL–Coalition of Derivatives End-Users. 

The commenter stated that often, after a bond is 

issued to raise debt in the capital markets, the 

issuer will enter into an interest rate swap to hedge 

the interest rate risk. 

255CL–ISDA/SIFMA at 15. 

256See CL–MS. 

257The commenter stated that a market in which 

products that are illiquid are cleared exists for highyield single name CDS. The Commission notes, 

however that such single name CDS are not under 

the Commission’s jurisdiction. CL–MS at 3, fn. 4. 

258See CL–MS. 

259See CL–MS; CL–Barclays. 

260See CL–ISDA/SIFMA. 

CEA section 2(a)(13)(C)(iii) requires that 

the Commission’s rules maintain the 

confidentiality of business transactions 

and market positions of the 

counterparties to an uncleared swap.242

Proposed § 43.4(e)(1) prohibited the 

public dissemination of real-time swap 

transaction and pricing data that would 

identify or facilitate the identification of 

a party to a swap and further specified 

that an SDR may not publicly report 

such data in a manner that discloses or 

otherwise facilitates the identification of 

a party to a swap. Proposed § 43.4(e)(2) 

directed that a SEF, DCM or reporting 

party must provide an SDR with a 

specific description of the underlying 

asset and tenor of a swap. Proposed 

§ 43.4(e)(2) further provided that ‘‘this 

description must be general enough to 

provide anonymity but specific enough 

to provide for a meaningful 

understanding of the economic 

characteristics of the swap.’’ Proposed 

§ 43.4(i) established a rounding 

convention for all swaps, including a 

‘‘notional cap’’ providing that if the 

notional size of a swap is greater than 

$250 million, only ‘‘$250+’’ would be 

publicly disseminated.243

The Commission recognized that the 

public dissemination of the underlying 

asset and tenor of a swap executed offfacility with a specific underlying asset 

may be more susceptible to an inference 

as to the identity, business transactions 

or market positions of the parties to the 

swap, particularly in the ‘‘other 

commodity’’ asset class.244 In contrast, 

the Commission acknowledged that 

swaps executed on or pursuant to the 

rules of a SEF or DCM would likely not 

be subject to the same disclosure risk.245

To avoid the former result and comply 

with the statutory mandate, the 

Commission determined that a more 

general description than the specific 

underlying asset and tenor should be 

publicly disseminated.246 The 

Commission provided an example in the 

Proposing Release of how such a 

standard could be applied, but did not 

propose specific guidelines because it 

recognized that SEFs or DCMs may 

differ and that new types of swaps may 

emerge.247 Proposed § 43.4(e)(2) made 

clear that its requirement was separate 

from the requirement that a reporting 

party report swap data to an SDR 

pursuant to CEA section 2(a)(13)(G).248

As proposed in § 43.4(e)(2), the 

standard that swap data be ‘‘general 

enough to provide anonymity but 

specific enough to provide for a 

meaningful understanding of the 

economic characteristics of the swap’’ 

applied to all swaps. However, in the 

preamble to the Proposing Release, the 

Commission recognized that SEFs or 

DCMs differ and sought to clarify that 

the standard would be applied 

differently depending on asset class and 

place of execution. Even if the specific 

underlying asset and tenor of a swap 

executed on or pursuant to the rules of 

a SEF or DCM were publicly 

disseminated, it would be difficult for 

market participants to ascertain the 

identity, business transactions or market 

positions of the counterparties. Swaps 

executed on or pursuant to the rules of 

a SEF or DCM would generally lack the 

kind of customization that would permit 

reverse engineering; therefore, 

identities, business transactions and 

market positions and of counterparties 

could not be inferred from the 

underlying asset and tenor. 

The Commission received 25 

comments addressing anonymity in the 

public dissemination of swap 

transaction and pricing data. The 

commenters included industry 

associations representing financial 

market participants; potential SDs; endusers (both financial and non-financial); 

potential SDRs; an asset manager; and a 

data vendor to the OTC derivatives 

industry. Some commenters expressed a 

general concern that the provisions in 

the Proposing Release would not 

sufficiently protect the anonymity of the 

market participants. Within this group, 

some commenters believed that 

anonymity would not be sufficiently 

protected by the proposed provisions 

because of the structure of the swap (i.e., 

bilateral swap where at least one 

counterparty is an end-user; bespoke 

transaction; 249 uncleared bespoke 

transaction).250 Others argued that 

anonymity would be compromised 

because of the underlying asset (i.e., 

energy products); 251 still others focused 

on the liquidity in the market.252 In 

addition to general concerns, one 

commenter asserted that the information 

that would be publicly disseminated 

under the proposed rule would fail to 

enhance price discovery, and thus its 

disclosure would not further the 

statutory purpose embodied in CEA 

section 2(a)(13)(B).253

One commenter stated that the 

anonymity provisions of proposed 

§ 43.4(e)(2) should be applied to all 

asset classes and to all swaps, regardless 

of whether the swap is executed on or 

pursuant to the rules of a SEF or DCM 

or off-facility.254 Another requested that 

the Commission clarify in the final rule 

‘‘that the information required to be 

publicly disseminated cannot identify 

the participants to a swap or provide 

information specific to the 

participants.’’ 255

One commenter asserted that whether 

a swap is liquid enough to clear at a 

DCO is not determinative of whether the 

swap exists in a liquid market.256 The 

commenter stated that cleared swaps 

may exist in illiquid markets and the 

real-time reporting of such swap 

transaction and pricing data may both 

negatively impact the price, and 

disclose the identity, business 

transactions or market positions of one 

or more counterparties.257 The same 

commenter suggested that the 

Commission define an ‘‘illiquid market’’ 

and require that swaps traded in such 

markets receive special treatment for 

purposes of public dissemination.258

Similarly, commenters suggested that 

the Commission begin phasing in realtime public reporting with more liquid 

contracts and phase in less liquid 

contracts as it gains more information 

on markets with less liquidity.259

A common belief expressed by many 

commenters is that special 

accommodations should be made for 

off-facility swaps based upon an 

underlying physical commodity because 

of the increased risk that the identities 

of the parties and their business 

transactions or market positions may be 

revealed.260 Some commenters focused 

on the illiquid markets that exist for 


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261See CL–ATA; and CL–Barclays. 

262See CL–Dominion. 

263 Id. at 7. 

264See id. 

265See CL–Working Group of Commercial Energy 

Firms. As stated above in section II.A.1. (‘‘Scope’’) 

discussion, the Commission has determined that 

Section 2(a)(13)(C) requires all swaps to be publicly 

reported. 

266See CL–Dominion. 

267See CL–Coalition of Energy End-Users; CL– 

Working Group of Commercial Energy Firms. 268CL–Coalition of Derivatives End-Users at 8. 269See id. 270See CL–Working Group of Commercial Energy 

Firms. In the Proposing Release, the Commission 

asked about whether creditworthiness of 

counterparty should be publicly disseminated. 

Real-Time NPRM supra note 6, at 76158. See also 

infra discussion in section II.F. (‘‘Appendix A to 

Part 43 (‘‘Data Fields for Public Dissemination’’)’’). 

271 Id.; See also CL–Argus. 272 ‘‘[T]he trade data should be mapped to a tenor 

ladder for public dissemination with longer dated 

products mapping to one-year or two-year, for 

example, rather than specific month and year.’’ CL– 

GFXD at 11. 273See CL–Working Group of Commercial Energy 

Firms. The commenter provided an example that 

because energy products tend to trade in seasonal 

strips except for short tenors, it may be beneficial 

to report seasonal strips rather than month for such 

transactions. 

274See CL–ISDA/SIFMA. The commenter stated: 

‘‘The Commission requests comment on whether 

date information for swaps should be rounded to 

the nearest tenor/month. Many swaps meet specific 

requirements for end-users. To limit or manipulate 

data elements that are part of the Primary Economic 

Terms in order to allow trades with differing terms 

to be aggregated will reduce post trade 

transparency. We recommend that this proposal not 

be implemented.’’ Id. at 15. 

275See CL–ABC/CIEBA; CL–MFA; and CL–ISDA/ 

SIFMA. 

276 Id. 

277See, e.g., CL–Dominion; CL–Encana; CL– 

FHLBanks; CL–Coalition for Derivatives End-Users; 

CL–Argus; and Meeting with NFPEEU (January 19, 

2011). 

some swaps that fall within the ‘‘other 

commodity’’ asset class with specific 

pricing points or delivery points, grade 

level or tenor, specifically for swaps 

with an underlying asset in the energy 

space (e.g., natural gas, electricity, jet 

fuel, etc.).261 The commenters explained 

these markets are very illiquid with few 

transactions and/or few market 

participants. They argued that trades 

executed in illiquid markets are more 

susceptible to reverse engineering, 

thereby increasing the likelihood that 

the counterparties’ identities, business 

transactions or market positions could 

be discovered.262

One commenter suggested that the 

Commission ‘‘allow for an exclusion 

[from the requirements of part 43] for 

any transaction between either two endusers or an end-user and a regulated 

entity with respect to any class of swaps 

that does not serve a significant price 

discovery function.’’ 263 The commenter 

stated that in such situations, 

particularly when the entity is hedging 

an energy asset, the public 

dissemination of the swap transaction 

and pricing data would serve no price 

discovery function and may reveal the 

identity of the end-user, depending on 

whether the underlying asset is in an 

illiquid market with few market 

participants.264 Another commenter 

stated that the Commission should 

ensure anonymity by not requiring the 

public dissemination of swap 

transaction and pricing data for any 

bespoke off-facility swaps.265 Similarly, 

a commenter suggested the Commission 

should not require the public 

dissemination of any swap which falls 

under CEA section 2(a)(13)(C)(iii) and 

any end-user swaps under CEA section 

2(a)(13)(C)(i) that are clearable but not 

cleared, until the Commission 

determines that these swaps are 

‘‘significant price discovery’’ swaps as 

set forth in Section 737 of the DoddFrank Act.266 This commenter believed 

that given the Commission’s anonymity 

provisions, the public dissemination of 

the underlying asset would not be 

specific enough to enhance price 

discovery. 

Some commenters suggested that, to 

ensure anonymity, the Commission 

should limit the amount of data or the 

data fields that are publicly 

disseminated.267 In this regard, one 

commenter observed that ‘‘[i]f the list of 

data fields is extensive [and carries with 

it substantial implementation costs], yet 

not complete enough that pricing of 

instruments can be reproduced easily, 

then end-users would bear the 

implementation costs without the 

commensurate benefit of enhanced price 

discovery.’’ 268 The commenter 

emphasized the importance of 

dissemination of the data fields that 

allow market participants to deduce the 

material incentives that SDs or MSPs 

have in connection with a particular 

swap.269 Another commenter noted that 

credit support arrangements are often 

privately negotiated; to ensure the 

confidentiality of the business 

transactions of the counterparties to an 

uncleared, bespoke swap with a credit 

support arrangement, a ‘‘credit’’ data 

field should not be publicly 

disseminated.270 Commenters suggested 

that for swaps with a specific delivery 

or pricing point, a broad geographic 

region should be publicly disseminated 

rather than a specific location.271

One commenter stated that the 

‘‘Tenor’’ data field should allow parties 

to report using a tenor ladder, rather 

than the month and year, to protect the 

anonymity of the parties.272 However, 

another commenter suggested that tenor 

should be reported according to the 

current market convention for a 

particular swap instrument.273 Another 

commenter suggested a contrary 

approach: Because the tenor of a swap 

is a primary economic term, the specific 

tenor of the swap should be reported.274

Many commenters questioned how 

the Commission intended to enforce the 

provisions of proposed § 43,2(e)(2).275

Several commenters believed the 

proposed standard lacked clarity in 

terms of its application and requested 

additional guidance.276 These 

commenters noted that the Proposing 

Release placed the burden to provide 

the requisite description of the swap on 

the reporting party and requested that 

the Commission adopt explicit 

guidelines as to what data should (and 

should not) be reported to an SDR for 

purposes of public dissemination. 

Several other commenters believed that 

the confidentiality provisions of 

proposed § 43.2(e)—which includes the 

rounding convention and notional cap— 

would not adequately protect the 

counterparties, particularly when at 

least one party to the swap was an enduser or when there was an illiquid 

market for the swap.277

Consistent with its statutory mandate, 

the Commission is requiring real-time 

reporting that will enhance price 

discovery while ensuring the anonymity 

of the swap counterparties and the 

confidentiality of business transactions 

and market positions. The Commission 

agrees that the Proposing Release did 

not provide sufficient certainty as to 

what data was required to be reported 

by the reporting party to the swap. 

Accordingly, in adopting § 43.4(d), the 

Commission is not requiring the 

reporting party, SEF or DCM, to apply 

the ‘‘general enough but specific 

enough’’ standard in proposed 

§ 43.4(e)(2). Rather, § 43.4(d)(2) requires 

that the actual underlying asset be 

reported and publicly disseminated for 

all swaps in the interest rate, credit, 

foreign exchange and equity asset 

classes (‘‘financial swaps’’) and for those 

swaps described in § 43.4(d)(4) with 

respect to the ‘‘other commodity’’ asset 

class. 

As discussed above, one commenter 

urged that the final rule make clear that 

publicly disseminated data cannot 

identify the participants to the swap or 

information specific to the participants. 

The Commission believes that proposed 

§ 43.4(e)(1) adequately addresses this 

concern. Accordingly, § 43.4(d)(1) 

incorporates the rule text of proposed 


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278 Due to the deletion of proposed § 43.4(d), the 

anonymity provisions in proposed § 43.4(e) are 

being moved to final § 43.4(d). Final § 43.4(d)(1) 

states that ‘‘[s]wap transaction and pricing data that 

is publicly disseminated in real-time may not 

disclose the identities of the parties to the swap or 

otherwise facilitate the identification of a party to 

a swap. A registered swap data repository that 

accepts and publicly disseminates swap transaction 

and pricing data in real-time may not publicly 

disseminate such data in a manner that discloses or 

otherwise facilitates the identification of a party to 

a swap.’’ 

279Sections 43.4(d)(2)–(4) replace proposed 

§ 43.4(e)(2). 

280Certain clarifying language was added to the 

provision found in proposed § 43.4(e)(2). 

281Further, the statute requires that all swaps, 

including bespoke swaps, be publicly disseminated 

so long as the identity, business transactions and 

market positions of the parties to the swap are not 

disclosed. See CEA sections 2(a)(13)(C) and 

2(a)(13)(E)(i). 

282 In determining the appropriate time delay, the 

Commission also focuses on asset class and place 

of execution. 

283See CL–Coalition for Derivatives End-Users. 

284See infra discussion in section II.F. 

(‘‘Appendix A to Part 43 (‘‘Data Fields for Public 

Dissemination’’)’’). 

§ 43.4(e)(1) with non-substantive 

clarifying changes.278

As adopted, § 43.4(d)(2) requires that 

reporting parties, SEFs and DCMs report 

the actual description of the underlying 

assets and tenor to the SDR.279 The SDR 

must then publicly disseminate the 

swap transaction and pricing data 

related to the swap pursuant to 

appendix A to part 43. The SDR is 

responsible for applying the appropriate 

time delay, rounding convention, and 

notional cap prior to the public 

dissemination of the swap transaction 

and pricing data. Section 43.4(d) 

eliminates the need for the reporting 

party to report a generalized description 

of the underlying asset to the SDR. 

Further, the Commission anticipates 

that reporting parties will utilize the 

data connections that will be required to 

report regulatory data to an SDR, as 

described in proposed part 45, and that 

requiring additional fields may create 

confusion. However, although reporting 

parties may use the same data stream for 

reporting regulatory data and real-time 

data, § 43.4(d)(2) clarifies the intent of 

the Proposing Release: The reporting 

requirements for SEFs, DCMs and 

reporting parties for real-time reporting 

purposes are separate from the 

requirement to report to an SDR for 

regulatory reporting purposes.280

In response to commenters who 

contended that swaps involving endusers should be treated differently to 

protect anonymity, the Commission 

acknowledges that end-users may enter 

bespoke or customized swaps more 

often than non-end-users. The 

Commission nonetheless believes it is 

unnecessary to differentiate by swap 

counterparties in promulgating a rule to 

protect anonymity.281 Rather, as 

explained below, it is more appropriate 

to focus on the asset class, the liquidity 

of certain types of swaps and the 

execution venue (i.e., SEF, DCM, offfacility) in determining whether a 

specific description of the underlying 

asset should be publicly 

disseminated.282 In response to 

commenters who claimed that the 

public dissemination of swap 

transaction and pricing data for certain 

swaps entered into by end-users serves 

no price discovery function, the 

Commission disagrees; there is price 

discovery value in publicly 

disseminating all arm’s-length 

transactions. Publicly disseminating 

such data will provide market 

participants and the public with a 

clearer understanding of the depth of a 

particular market, the frequency of 

trading in the market and the pricing of 

transactions with the same or similar 

underlying assets. 

With respect to financial swaps, the 

Commission has considered comments 

and discussions with market 

participants, and does not believe that 

disclosure of information relating to the 

underlying asset, reference price or 

index will compromise anonymity. 

Financial swaps do not have underlying 

assets with specific delivery or pricing 

points (such as swaps with underlying 

physical commodities). Further, the 

liquidity to hedge such financial swaps, 

either in the swaps markets or in 

alternative markets (i.e., futures, cash 

markets, etc.), reduces concerns that the 

public dissemination of such swap 

transaction and pricing data pursuant to 

part 43 will reveal specific information 

about market participants. 

One commenter asserted that the 

public dissemination of an interest rate 

swap in connection with a bond 

issuance could identify the end-user to 

the swap.283 This commenter contended 

that because bond issuances are a matter 

of public record, real-time reporting 

would enable market participants to 

identify the end-user to the swap by 

matching the terms of the swap with the 

bond issuance that is being hedged. In 

the circumstance described by the 

commenter, the hedge of interest rate 

risk after a bond issuance is a routine 

transaction that market participants 

expect. The Commission believes that 

there is sufficient liquidity in the 

interest rate, credit, equity and foreign 

exchange asset classes to protect the 

anonymity of market participants in 

such asset classes. Further, in the 

Commission’s view, the rounding 

convention and notional caps provided 

in §§ 43.4(g) and (h) will help to protect 

the counterparties’ identities, business 

transactions and market positions for all 

swaps, regardless of asset class. 

Therefore, the Commission believes that 

the public dissemination of the full 

information relating to financial swaps, 

such as swaps executed in connection 

with a bond issuance, will enhance 

price discovery and will not 

compromise the anonymity of market 

participants. 

Accordingly, § 43.4(d)(3), as adopted, 

requires that the actual underlying asset 

and tenor be publicly disseminated for 

all swaps in the interest rate, credit, 

foreign exchange and equity asset 

classes, regardless of whether a swap is 

executed on or pursuant to the rules of 

a SEF or DCM or is an off-facility swap. 

The rounding convention and notional 

caps provide sufficient protection to 

ensure the anonymity of the identities, 

business transactions and market 

positions of market participants with 

respect to financial swaps. 

Some commenters asserted that to 

protect the identities of the 

counterparties, the actual tenor of the 

swap should not be publicly 

disseminated (i.e., use of a tenor ladder 

or use of current market convention). 

The Commission has considered the 

implications of publicly disseminating 

the various data fields on disclosing the 

anonymity, business transactions and 

market positions of swap counterparties. 

As further explained in the discussion 

of appendix A to part 43, the 

Commission is clarifying the data fields 

in order to protect the identities, 

business transactions and market 

positions of market participants while 

enhancing price discovery to market 

participants and the public. The 

Commission agrees with the commenter 

who stated that the tenor of a financial 

swap is a primary economic term of the 

swap. Because the tenor is material to 

the pricing of a swap, the Commission 

is requiring that the actual tenor for all 

swaps be publicly disseminated.284

The Commission agrees that there are 

bespoke, off-facility transactions in 

which the underlying asset is a physical 

commodity; these transactions carry a 

significantly increased likelihood that 

the public dissemination of the 

underlying asset may disclose the 

identity, business transactions or market 

positions of a counterparty. Several 

commenters focused on the lack of 

liquidity in certain ‘‘other commodity’’ 

markets, expressing the view that the 

public dissemination of the underlying 

asset or delivery point would reveal 

information about market participants. 


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285Additionally, one commenter urged that the 

fact that a swap may be cleared is not determinative 

of whether a swap is trading in an ‘‘illiquid’’ 

market. See CL–MS. The Commission believes that 

the interim time delays described in § 43.5(c) 

adequately address this commenter’s concerns, and 

the Commission intends to further address this 

comment in the block trade re-proposal. 

286Similar contracts are described in the Position 

Limits final rulemaking. See 76 FR 71626 (final rule 

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

public/@lrfederalregister/documents/file/2011- 

28809a.pdf, last visited Nov. 30, 2011). 

287The 28 Enumerated Physical Commodity 

Contracts are: ICE Futures U.S. Cocoa, ICE Futures 

U.S. Coffee C, Chicago Board of Trade Corn, ICE 

Futures U.S. Cotton No. 2, ICE Futures U.S. FCOJ– 

A, Chicago Mercantile Exchange Live Cattle, 

Chicago Board of Trade Oats, Chicago Board of 

Trade Rough Rice, Chicago Board of Trade 

Soybeans, Chicago Board of Trade Soybean Meal, 

Chicago Board of Trade Soybean Oil, ICE Futures 

U.S. Sugar No. 11, ICE Futures U.S. Sugar No. 16, 

Chicago Board of Trade Wheat, Minneapolis Grain 

Exchange Hard Red Spring Wheat, Kansas City 

Board of Trade Hard Winter Wheat, Chicago 

Mercantile Exchange Class III Milk, Chicago 

Mercantile Exchange Feeder Cattle, Chicago 

Mercantile Exchange Lean Hogs, Commodity 

Exchange, Inc. Copper, New York Mercantile 

Exchange Palladium, New York Mercantile 

Exchange Platinum, Commodity Exchange, Inc. 

Gold, Commodity Exchange, Inc. Silver, New York 

Mercantile Exchange Light Sweet Crude Oil, New 

York Mercantile Exchange New York Harbor 

Gasoline Blendstock, New York Mercantile 

Exchange Henry Hub Natural Gas, New York 

Mercantile Exchange New York Harbor Heating Oil. 

288The 28 Enumerated Physical Commodity 

Contracts are traded on U.S. DCMs, while Brent 

Crude Oil (ICE) futures contracts are primarily 

traded in Europe. Nonetheless, Commission has 

determined that swaps that utilize a reference price 

based on Brent Crude Oil (ICE) futures have 

sufficient trading activity such that public 

dissemination of the actual underlying asset would 

not disclose the identities of counterparties or the 

business transactions and market positions of any 

person. 

289An ‘‘indirect’’ price link to an Enumerated 

Physical Commodity Contract or an Other Contract 

described in appendix B to part 43 includes 

situations where the swap reference price is linked 

to prices of a cash-settled contract described in 

appendix B to part 43 that itself is cash-settled 

based on a physical-delivery settlement price to 

such contract. 

290See 75 FR 76574. 

291As one commenter noted: ‘‘A strict set of realtime reporting rules could apply to all ‘‘benchmark’’ 

instruments that have significant price-discovery 

functions, while non-benchmark instruments could 

fall under a different set of real-time reporting 

requirements. In so doing, the Commission would 

achieve the majority of the price-discovery benefits 

without the danger of damaging the market 

structure for the non-benchmark transactions that 

do not have a meaningful price discovery function.’’ 

CL–Coalition for Derivatives End-Users at 4. 

292The Commission notes that a swap which is 

voluntarily executed on or pursuant the rules of a 

SEF or DCM may or may not be cleared at a DCO. 

293To the extent that counterparties avail 

themselves to the rules of a SEF or DCM, they will 

typically choose to do for the purpose of taking 

advantage of the liquidity of the SEF or DCM. 

Commenters’ concerns about illiquid 

swaps in the ‘‘other commodity’’ asset 

class may be valid; however, the 

Commission believes that for certain 

bilateral ‘‘other commodity’’ swaps, 

adequate liquidity exists such that the 

counterparty’s identity, business 

transactions and market positions will 

not be disclosed by the public 

dissemination of such swap transaction 

and pricing data.285

As discussed above, commenters 

recommended phasing in public 

reporting and dissemination based on 

liquidity, and the Commission agrees 

that, given the anonymity concerns, 

such an approach is appropriate. The 

Commission is phasing in the public 

dissemination requirements for ‘‘other 

commodity’’ swaps, as discussed 

directly below. 

As adopted, §§ 43.4(d)(4)(ii)(A) and 

(B) provide that for any publicly 

reportable swap transaction in the 

‘‘other commodity’’ asset class that 

references any of the 28 ‘‘Enumerated 

Physical Commodity Contracts’’ 

including ‘‘other commodity’’ swaps 

that are economically-related to such 

contracts,286 the actual underlying 

physical commodity or referenced price 

or index must be publicly disseminated 

by the SDR, regardless of execution 

method. Additionally, the Commission 

believes that the public dissemination of 

any swap that references Brent Crude 

Oil (ICE) (and any swaps that are 

economically-related thereto) must 

reference the actual underlying asset, 

regardless of execution method. 

The 28 Enumerated Physical 

Commodity Contracts have been 

identified by the Commission as (i) 

having high levels of open interest and 

significant cash flow; and (ii) serving as 

a reference price for a significant 

number of cash market transactions.287

These 28 Enumerated Physical 

Commodity Contracts are identical to 

those that will have federallyadministered limits imposed on them by 

the Commission’s part 151 rules 

(Position Limits) generally covering 

contracts based on the agricultural, 

metals and energy commodities. 

Additionally, using the same criteria 

enumerated above, the Commission is 

requiring that any swap that references 

Brent Crude Oil (ICE), or economicallyrelated to Brent Crude Oil (ICE), be 

reported and publicly disseminated by 

an SDR.288 The Commission has 

determined that these contracts and 

economically related contracts have 

sufficient liquidity to ensure that the 

public dissemination of swap 

transaction and pricing data for swaps 

based on these reference assets poses 

little risk of disclosing identities of 

parties, business transactions or market 

positions. 

Appendix B to part 43 (‘‘Enumerated 

Physical Commodity Contracts and 

Other Contracts’’) lists the 28 

Enumerated Physical Commodity 

Contracts and Other Contracts (i.e., 

Brent Crude Oil (ICE)) for which the 

actual underlying asset must be publicly 

disseminated. For the purposes of part 

43, swaps are economically related, as 

described in § 43.4(d)(4)(ii)(B), if such 

contract utilizes as its sole floating 

reference price the prices generated 

directly or indirectly 289 from the price 

of a single contract described in 

appendix B to part 43. 

For all off-facility swaps that 

reference an underlying asset(s) in the 

‘‘other commodity’’ asset class which 

are not listed on appendix B to part 43, 

the Commission intends to propose 

special accommodations for the public 

dissemination of transaction and pricing 

data in a future Commission release to 

be published for comment in the 

Federal Register. Until such time as the 

Commission adopts these special 

accommodations, those off-facility 

swaps not listed in appendix B to part 

43 will not be required to comply with 

the real-time reporting and public 

dissemination requirements under this 

part. However, such swaps will be 

subject to the regulatory reporting 

requirements, described in proposed 

part 45, when adopted.290 The 

Commission believes that the phasing in 

of these illiquid, off-facility swaps in the 

‘‘other commodity’’ asset class 

addresses commenters’ concerns that 

public dissemination of such 

information would disclose the 

identities of the parties, market 

positions or business transactions.291

The Commission is not persuaded by 

commenters’ concerns that public 

disclosure of ‘‘other commodity’’ swaps 

executed on or pursuant to the rules of 

a SEF or DCM could disclose the 

identities of the parties. Parties will 

execute swaps on or pursuant to the 

rules of a SEF or DCM because either (i) 

the swap is subject to the trade 

execution mandate of CEA section 

2(h)(8) and therefore must be traded on 

a SEF or DCM; or (ii) the swap is not 

subject to the trade execution mandate 

but the parties voluntarily execute the 

swap on or pursuant to the rules of a 

SEF or DCM.292 When counterparties 

voluntarily execute on or pursuant to 

the rules of a SEF or DCM, the parties’ 

choice to execute such swap evidences 

their belief that the market is 

sufficiently liquid and has a sufficient 

number of participants that the identity 

of the parties cannot be reverse 

engineered; thus counterparties’ 

business transactions or market 

positions would not be discernible.293


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294Section 43.4(d)(4)(ii)(C) includes the public 

dissemination of the actual underlying physical 

commodity or referenced price or index for all 

swaps executed on a SEF or DCM, not just those 

that are made available for trading, and any block 

trades executed pursuant to the rules of a SEF or 

DCM. 

295See CL–ICI. 

296See CL–MarkitSERV. 

297See Meeting with Credit Suisse (April 15, 

2011). 

298The Technology Advisory Committee 

Subcommittee on Data Standards is one such group 

that is working to develop unique product 

identifiers. 

299See CL–Coalition for Derivatives End-Users; 

CL–WMBAA; and CL–MFA. 

The Commission believes that by 

voluntarily executing a swap on a SEF 

or DCM, the swap counterparties are 

already consenting to price 

transparency, regardless of the manner 

in which such transaction is executed. 

If the parties believed that their 

identities, market positions and 

business transactions could be exposed, 

they may choose to enter into an offfacility swap. Accordingly, the 

Commission is adopting 

§ 43.4(d)(4)(ii)(C) which requires that 

the actual underlying physical 

commodity or referenced price or index 

must be publicly disseminated by an 

SDR for any swap that is executed on or 

pursuant to the rules of a SEF or 

DCM.294

The Commission’s Proposing Release 

did not address the manner in which a 

basis swap should be publicly 

disseminated and the Commission 

received no comments addressing the 

issue. Basis swaps are swaps that are 

cash-settled based on the difference in 

pricing of the same (or substantially the 

same) commodity at different delivery 

points. Since the parties to a basis swap 

price the difference between the same 

(or substantially the same) commodity 

in two different locations and not the 

underlying commodity itself, the 

Commission has not yet determined 

how such swaps that reference 

commodities with specific delivery 

points should be publicly disseminated. 

Accordingly, for this initial phase in 

period, the Commission is not requiring 

the public dissemination of basis swaps 

when such swap is not executed on or 

pursuant to the rules of a SEF or DCM 

and when at least one leg is not based 

on one of the 28 Enumerated Physical 

Commodity Contracts or Other 

Contracts listed in appendix B to part 

43. 

The Commission agrees that the 

Proposing Release did not provide 

adequate certainty as to the reporting 

requirements applicable to the reporting 

party to the swap. Accordingly, as 

described above, § 43.4 does not require 

the reporting party to a swap or a SEF 

or DCM to apply a standard which 

would ensure that transaction data 

would remain anonymous. Section 

43.4(d)(2) provides that for all swaps, 

the reporting party must report the 

actual underlying asset and tenor to an 

SDR. The SDR is responsible for 

applying the appropriate time delay, 

rounding convention and notional cap 

prior to the public dissemination of the 

swap transaction and pricing data. 

Furthermore, if the underlying asset of 

the swap reported is an ‘‘other 

commodity’’ which does not reference 

one of the Enumerated Physical 

Commodity Contracts or Other 

Contracts described in appendix B to 

part 43, and is not economically related 

to one of the 28 Enumerated Physical 

Commodity Contracts or Other 

Contracts, the SDR which receives such 

data shall not publicly disseminate such 

swap’s transaction and pricing data at 

this time. 

6. Unique Product Identifier (§ 43.4(e)) 

Proposed § 43.4(f) provided that if a 

unique product identifier is developed 

that sufficiently describes one or more 

data fields as set forth in appendix A to 

part 43, then the unique product 

identifier may be used in lieu of the data 

fields that it describes. An SDR could 

determine whether to publicly 

disseminate the UPI and may ask 

reporting parties, SEFs and DCMs to 

provide the UPI as part of the swap 

transaction and pricing data that must 

be reported to the SDR for public 

dissemination. 

Several commenters questioned this 

provision. One commenter stated that 

multiple unique identifiers could be 

assigned by different regulators to the 

same financial entity for the products 

traded by such entity, unnecessarily 

creating compliance burdens, 

operational difficulties, and 

opportunities for confusion.295 Another 

contended that any rule regarding 

product identifiers should require that 

they be made available on a 

‘‘commercially reasonable basis.’’ 296

Yet another stated that unique product 

identifiers should be in place before 

real-time public reporting begins.297 The 

commenter argued that it would be 

expensive to begin real-time public 

reporting without unique product 

identifiers and then have to change 

systems to account for new unique 

product identifiers. 

The Commission acknowledges that 

multiple unique identifiers could be 

assigned by different regulators to the 

same financial entity but notes as well 

that the industry, the Commission and 

prudential regulators are currently 

working to develop unique product 

identifiers for the industry.298 The 

Commission continues to work with 

other regulators and market participants 

to provide support during the 

development process for unique product 

identifiers. However, discussion of the 

assignment process for unique product 

identifiers is outside the scope of this 

rulemaking and the Commission does 

not find it appropriate to make 

compliance with the part 43 rules 

contingent upon the existence of unique 

product identifiers. 

For the reasons discussed above, the 

Commission has determined that no 

substantial modifications are necessary 

to proposed § 43.4(f). The Commission 

has made only technical and 

conforming changes to § 43.4(f). For 

example, the section was renumbered as 

§ 43.4(e), and the ‘‘43’’ was inserted 

after ‘‘of this part.’’ 

7. Reporting of Notional or Principal 

Amounts to a Registered Swap Data 

Repository (§ 43.4(f)) 

The information related to the ‘‘priceforming continuation data’’ that must be 

publicly disseminated is included in the 

definition for ‘‘publicly reportable swap 

transaction.’’ Accordingly, because such 

provision is redundant, the Commission 

is not adopting proposed § 43.4(g). 

8. Public Dissemination of Rounded 

Notional or Principal Amounts 

(§ 43.4(g)) 

Proposed § 43.4(i) established a 

rounding convention for the public 

dissemination of all swaps, as follows: 

The notional or principal amount data 

fields described in appendix A to this part 

shall be publicly disseminated as follows: 

(1) If the notional or principal amount is 

less than 1 million, round to nearest 100 

thousand; 

(2) If the notional or principal amount is 

less than 50 million but greater than 1 

million, round to the nearest million; 

(3) If the notional or principal amount is 

less than 100 million but greater than 50 

million, round to nearest 5 million; 

(4) If the notional or principal amount is 

less than 250 million but greater than 100 

million, round to the nearest 10 million; 

(5) If the notional or principal amount is 

greater than 250 million, round to ‘‘250+. 

Several commenters supported the 

rounding convention as an effective way 

to protect the anonymity of swap 

counterparties and recognized that 

rounding would provide a degree of 

protection against the front-running of 

larger transactions.299 Some 

commenters contended that because 

markets vary, so too should the 


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300See CL–WMBAA; CL–MFA; CL–MetLife; and 

CL–ISDA/SIFMA. 

301 Id. If market participants in an illiquid market 

know that a large swap has been executed, they may 

be able to identify at least one counterparty, as well 

as certain market positions or business transactions. 

302See CL–Coalition for Derivatives End-Users. 

303 Id. 

304See CL–ABC/CIEBA. 

305See CL–Chris Barnard. 

306Similarly, proposed part 45 requires that the 

actual notional or principal amount be reported for 

the purposes of regulatory reporting to registered 

swap data repositories. 

307The term ‘‘asset class’’ is defined in § 43.2 and 

discussed in section II.B.2. (‘‘Defined Terms’’). 

308Section 43.4(g) provides: 

‘‘Rounding of notional or principal amount. The 

notional or principal amount data fields, as 

described in appendix A to this part, shall be 

rounded as follows: 

(1) If the notional or principal amount is less than 

1,000, round to nearest five, but in no case shall a 

publicly disseminated notional or principal amount 

be less than five; 

(2) If the notional or principal amount is less than 

10 thousand but equal to or greater than 1 thousand, 

round to nearest 1 hundred; 

(3) If the notional or principal amount is less than 

100 thousand but equal to or greater than 10 

thousand, round to nearest 1 thousand; 

(4) If the notional or principal amount is less than 

1 million but equal to or greater than 100 thousand, 

round to nearest 10 thousand; 

(5) If the notional or principal amount is less than 

100 million but equal to or greater than 1 million, 

round to the nearest 1 million; 

(6) If the notional or principal amount is less than 

500 million but equal to or greater than 100 million, 

round to the nearest 10 million; 

(7) If the notional or principal amount is less than 

1 billion but equal to or greater than 500 million, 

round to the nearest 50 million; 

(8) If the notional or principal amount is less than 

100 billion but equal to or greater than 1 billion, 

round to the nearest 1 billion; 

(9) If the notional or principal amount is greater 

than 100 billion, round to the nearest 50 billion.’’ 

309Real-Time NPRM supra note 6, at 76174. 310See CL–ABC/CIEBA. (‘‘For instance, an 

interest rate swap with a 2 year duration may be 

highly liquid and thus the threshold of $250 million 

as the highest rounding threshold might be 

appropriate. However, an interest rate swap with a 

35 year duration may be off-market and illiquid, 

and typical trades may be significantly less than 

$250 million, and as such, a lower rounding 

threshold would be appropriate.’’). Id. at 9. See also 

CL–ISDA/SIFMA; CL–MetLife. 

311See CL–Coalition of Derivatives End-Users. 312See CL–SIFMA AMG (‘‘For instance, for a low 

duration, plain vanilla, highly liquid swap, $250 

million as the highest rounding threshold might be 

appropriate. For a higher duration, less 

standardized and more illiquid swap, a large trade 

is typically significantly less than $250 million in 

notional amount, and a much lower rounding 

threshold would be appropriate.’’). Id. at 5. 

rounding convention and notional caps 

in order to account for the differences in 

trade sizes and liquidities in different 

markets.300 These commenters asserted 

that these considerations would ensure 

that material information is not 

disclosed.301

One commenter supported the use of 

a rounding convention but did not 

believe the Proposing Release 

considered the particularity of specific 

categories of swaps.302 The commenter 

suggested that the Commission adopt a 

more nuanced and granular rounding 

convention that recognizes that various 

categories of swaps and their 

markets.303 Another commenter argued 

that the Proposing Release’s perceived 

failure to consider the liquidity, type 

and tenor of swaps would lead to 

increased costs for market participants 

who transact in bespoke swaps in 

illiquid markets.304 This commenter 

further stated that SDs’ concerns about 

the front-running of large transactions 

would cause them to include an 

additional premium in their swaps 

pricing, which ultimately would lead to 

increased costs of hedging in illiquid 

markets, and that such costs would, in 

turn, be passed on to end-users. In 

contrast, one commenter argued that a 

rounding convention should not be used 

and that the notional or principal 

amounts for all swaps should be 

publicly disseminated.305

The Commission believes that the 

actual notional or principal amount 

should be reported to an SDR by 

reporting parties, SEFs and DCMs. 

Accordingly, the Commission is 

adopting § 43.4(f), to assign 

responsibilities to reporting parties, 

SEFs and DCMs for reporting the 

notional or principal amount of a swap 

to an SDR. As adopted, § 43.4(f)(1) and 

(2) are similar to the provisions in 

proposed § 43.4(h)(1) and (2); however, 

certain conforming and clarifying 

changes have been made to these rules 

in light of changes to other provisions 

of the part 43 regulations.306

The Commission agrees that the 

rounding convention should be more 

nuanced to take into account the various 

types of swaps in different asset classes. 

However, the Commission does not 

believe it is necessary to have a different 

rounding convention for each asset class 

and sub-asset class. Rather, as explained 

below, the Commission is adopting 

different notional caps based on asset 

class as defined in § 43.2 and is 

separating the notional caps from the 

rounding convention.307 The rounding 

convention is intended to protect the 

anonymity of swap counterparties. In 

addition, the rounding convention, 

combined with the notional caps 

discussed below and adopted in 

§ 43.4(h), will inhibit parties who may 

seek to front-run a swap transaction, 

especially for large swap transactions. 

The Commission does not believe the 

actual notional or principal amounts 

should be publicly disseminated. The 

public dissemination of the exact 

notional or principal amount presents a 

risk that confidential information would 

be disclosed in violation of CEA section 

2(a)(13). In the Adopting Release, the 

Commission has revised its proposed 

rounding convention to adopt a more 

granular rounding convention in 

§ 43.4(g). This rounding convention will 

apply to all swaps and should be read 

in conjunction with the notional caps 

provided in § 43.4(h), which are asset 

class specific.308 The Commission 

believes that even with the rounding 

convention, price discovery will be 

enhanced, as market participants and 

the public will gain an understanding of 

the sizes of swaps in particular asset 

classes while the identities of the 

parties, market positions and business 

transactions are protected. 

9. Public Dissemination Caps on 

Notional or Principal Amounts 

(§ 43.4(h)) 

Proposed § 43.4(h)(2)(i) established a 

cap on the public dissemination of 

notional or principal amounts that were 

embedded in the proposed rounding 

convention. The notional caps in the 

Proposing Release provided that, for all 

swaps, regardless of asset class or place 

of execution, ‘‘[i]f the notional or 

principal amount is greater than 250 

million, round to ‘250+’’’ for public 

dissemination purposes.309 The 

Commission proposed the notional cap 

to ensure the anonymity of the parties 

to a large swap and maintain the 

confidentiality of business transactions 

and market positions. 

The majority of comments addressing 

notional caps supported their use. Many 

commenters suggested modifications to 

the Proposing Release based on the 

belief that notional caps should be more 

granular to account for the differences 

in tenor, asset class, types of swaps and 

liquidity of different markets.310

Many commenters criticized the 

proposed cap of $250 million as too 

high and contended that the 

Commission failed to consider market 

liquidity, duration and type of swap. 

One commenter stated that the notional 

cap was sufficient to permit the most 

liquid interest rate derivative products 

to be executed in very large sizes and to 

enable dealers to offset risk, confident 

that the market does not know the 

actual size of the transaction.311

Another believed that the proposed 

notional cap unfairly disadvantaged the 

natural hedgers in the marketplace. 

These market participants may have 

specific portfolio needs that require 

trading swaps with longer tenors, which 

are less standardized and are more 

illiquid.312

Others suggested that the Commission 

set the notional cap at the 


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313See CL–UBS; CL–SDMA; and CL–WMBAA. 

314See Real-Time NPRM supra note 6, at 76161; 

CL–WMBAA. 

315See CL–WMBAA. 

316See CL–ISDA/SIFMA. 

317See CL–JPM. The commenter calculated the 

suggested masking thresholds by ‘‘computing how 

much market risk is represented by the TRACE 

masking thresholds and using those numbers to 

map the masking thresholds into other asset 

classes.’’ Id. at 13. This commenter also suggested 

that the Commission should set masking levels near 

the level that represents the dividing line between 

retail and institutional trades. 

318 Id. In the Proposing Release, ‘‘social size’’ was 

defined to mean ‘‘the greatest of the mode, median 

and mean transaction sizes for a particular swap 

contract or swap instrument, as commonly observed 

in the marketplace.’’ Real-Time NPRM supra note 

6, at 76172. 

319See CL–PIMCO. 

320 Id. 

321See Meeting with PIMCO (February 4, 2011). 

322See CL–ISDA/SIFMA. 

323 Id. 

324See CL–FIA/FSF/ISDA/SIFMA. 

325See CL–ABC/CIEBA. 

326See CL–Chris Barnard; CL–SDMA. 

327See CL–GFXD. 

328See CL–JPM. 

329The Commission notes that many comments 

discussed ‘‘block trades’’ as being the only trades 

which would be able to avail themselves of the 

notional cap. The Commission did not intend the 

notional cap to be available only to swaps which 

would be considered ‘‘block trades’’ under the 

proposed rule, but rather intended that the notional 

cap be available to all swaps which were greater 

than a notional or principal amount of $250 MM. 

330The Commission’s block trade re-proposal will 

address the notional caps as they align with the 

appropriate minimum block sizes. 

predetermined, appropriate minimum 

block trade size.313 Several commenters 

agreed that the Commission should use 

FINRA’s Trade Reporting and 

Compliance Engine (‘‘TRACE’’) 

framework to establish caps for public 

dissemination of the notional or 

principal amounts of swaps.314 One 

commenter believed that a TRACE-like 

approach, whereby full trade 

information is provided to regulators 

and publicly disseminated within a size 

range, would sufficiently protect 

counterparty anonymity and preserve 

liquidity and price competition in the 

markets.315 Another commenter opined 

that the use of a TRACE-type volume 

dissemination cap would ensure endusers have sufficient sources of 

liquidity.316 Another wrote that if the 

Commission extended the TRACE 

masking framework to swaps, the 

masking thresholds for plain vanilla 

fixed-floating interest rate swaps would 

be: $8 Million for 2 year interest rate 

swaps; $3 million for 5 year interest rate 

swaps; and $1 million for 10-year and 

30-year interest rate swaps.317 However, 

this commenter recognized these 

notional caps were extremely low and 

suggested, as an alternative, that the 

Commission set the notional cap at the 

social size (as defined in proposed 

§ 43.2(x)).318

One commenter recommended that 

the Commission create a tiered system 

for different categories of swaps.319 This 

commenter suggested the following 

notional cap thresholds for interest rate 

swaps: $250 Million for swaps with 0– 

2 year tenors; $200 million for swaps 

with 2–5 year tenors; $100 million for 

swaps with 6–10 year tenors; $75 

million for interest rate swaps with 11– 

20 year tenors; and $50 million for 

swaps with tenors over 20 years.320 The 

commenter also suggested three to five 

year tenor buckets and differentiating 

between high yield and investment 

grade for credit index swaps.321

Another commenter advocated that 

notional amounts for commodity swaps 

be reported and disseminated by units 

of measure (e.g., MMBtus for gas, MWh 

for power, etc.) rather than in dollar 

amounts.322 This commenter asserted 

that the sizes of commodity trades are 

typically smaller than interest rate swap 

trades, and therefore the notional cap 

should be smaller to take into account 

this difference.323

One commenter suggested that the 

Commission could require end of day 

reporting of swap notional size to 

regulators until an appropriate 

minimum block size can be 

appropriately set, provided that all 

trades above a certain notional 

threshold would be reported as ‘‘$X or 

above.’’ This commenter recommended 

that the Commission revisit the 

threshold amounts periodically and that 

the effects on market liquidity be 

studied.324

Another commenter believed the 

Commission should set notional caps 

(embedded in the rounding convention) 

only after the Commission has had the 

opportunity to analyze data from an 

SDR.325 Two commenters objected to 

the Commission’s proposal to use 

notional caps on the ground that failure 

to report the actual notional or principal 

amount would result in underreporting 

and would fail to enhance price 

discovery.326 Another, citing the 

substantial volume of trading in the FX 

markets, suggested that the Commission 

set a notional floor threshold of $1 

million whereby all FX swaps which are 

smaller than the threshold would not be 

reported.327

A commenter stated that accurate 

aggregate trade volumes by instrument 

should be computed and disseminated 

by the end of the day, independent of 

the choice of masking threshold, and 

that un-masked trade-by-trade notional 

amounts should eventually be 

disseminated after the application of 

both the masking rule and timing delays 

in order to facilitate analysis of market 

trends by market participants and 

academics.328

The Commission agrees with many of 

the comments and has, for some asset 

classes, adjusted the notional caps to 

take into account the differences 

between various types of swaps.329 In 

§ 43.4(h), the Commission proposed 

notional caps for public dissemination 

purposes. The Commission agrees that a 

‘‘one-size-fits-all’’ notional cap was 

inappropriate, and accordingly has 

established notional caps according to 

each asset class. Additionally, the 

Commission extracted the notional caps 

from the rounding convention and made 

it a stand-alone section in the final rule 

to provide the flexibility to adjust the 

notional caps—as the Commission may 

determine is appropriate or when an 

appropriate minimum block size is 

determined—without having to also 

change the rounding convention. 

The notional caps provided in 

§ 43.4(h) will apply until an appropriate 

minimum block size is established for a 

particular group of swaps. However, 

when an appropriate minimum block 

size is established for a particular asset 

class, the notional cap will be adjusted 

to align with the appropriate minimum 

block size.330 The Commission also 

agrees with commenters that the 

appropriate minimum block size should 

have a direct relationship to the 

notional cap. The Commission believes 

that the notional cap for a publicly 

reportable swap transaction should 

never be less than the appropriate 

minimum block size for such swap. 

The Commission has provided 

notional caps because it believes that 

market participants’ anonymity should 

be protected during the period before 

appropriate minimum block trade sizes 

are established as well as after the 

establishment of appropriate minimum 

block sizes. The notional caps should be 

read in conjunction with the rounding 

convention of § 43.4(g) and the publicly 

reportable data fields provided in 

appendix A to part 43. The Commission 

believes that the notional caps, the 

rounding convention and the data fields 

required to be publicly disseminated 

will adequately protect counterparties’ 

identities, business transactions and 

market positions. The Commission 

further believes that the public 

dissemination of the capped notional 

amount, as opposed to the actual 

notional or principal amount, will help 

to prevent front-running of very large 

trades. In turn, the Commission expects 


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331Commenters’ concerns about front running are 

substantially mitigated by the time delays for public 

dissemination. See Time Delays discussion and 

§ 43.5. 

332As discussed above, pursuant to § 43.3(f)(1) 

and (2), reporting parties, SEFs and DCMs are 

required to send the actual notional or principal 

amount of a publicly reportable swap transaction to 

a SDR. The SDR is then responsible for publicly 

disseminating the rounded (and capped, if 

applicable) amount. 

333No commenters addressed this proposal with 

respect to notional caps for the equity and FX asset 

classes. 

334See § 43.4(h)(5). 

335Proposed § 43.2(l) defined the term ‘‘large 

notional swap.’’ This term has been modified in 

final § 43.2 to be called ‘‘large notional off-facility 

swap.’’ Accordingly, all references to ‘‘large 

notional swap’’ shall be interchangeable with the 

term ‘‘large notional off-facility swap’’ for the 

purposes of this final rule. 

336For example, those swaps that fall under CEA 

section 2(a)(13)(C)(i) and (iv)—swaps subject to the 

mandatory clearing requirement or otherwise 

required to be cleared. 

that the public dissemination of a 

notional cap for large trades will not 

adversely impact market liquidity 

because market participants will not 

have to exit the market over concerns 

that they will be unable to adequately 

offset their risk without being front 

run.331

The Commission has considered the 

specific examples and data provided by 

the commenters for interest rate swaps 

and agrees that interest rate swaps with 

different tenors should be provided with 

different notional caps. The differences 

take into account the fact that interest 

rate swaps with longer-dated tenors 

tend to have smaller notional amounts 

than those with shorter dated tenors. 

The difference in notional amounts 

between longer tenor interest rate swaps 

(e.g., 30 year) and shorter dated interest 

rate swaps (e.g., three months) can be 

attributed to the risk exposure that 

counterparties are willing to assume for 

such swaps. Because market 

participants are willing to assume larger 

notional sizes based on the durationadjusted risk of the swap, large trade 

sizes are more frequently executed for 

interest rate swaps with a short tenor, as 

compared to those interest rate swaps 

with a longer tenor. Therefore, the 

Commission believes that the notional 

cap for short term interest rate swaps 

should be greater than the notional cap 

for interest rate swaps with longer 

tenors. 

Accordingly, the Commission is 

providing the following ‘‘interim’’ 

notional caps until such time as an 

appropriate minimum block size is 

established. These notional caps are 

required to be applied by an SDR prior 

to the public dissemination of the swap 

transaction and pricing data.332

• For Short Term (0–2 year (including 

2 year)) interest swaps: $250 MM; 

• For Intermediate Term (2–10 year 

(including 10 year)) interest rate swaps: 

$100 MM; and 

• For Long Term (Greater than 10 

year): $75 MM. 

For credit swaps (broad-based group 

or index), pursuant to § 43.4(h)(2), the 

Commission considered specific 

examples provided by the commenters 

in establishing the notional caps for 

credit index swaps. In the Commission’s 

view, the proposed cap of $250 MM was 

too high as an interim cap for credit 

swaps. The Commission recognizes that 

while certain credit indices may trade at 

larger notional values than other 

indices, one cap for the asset class is 

appropriate for an interim notional cap. 

Accordingly, the Commission is setting 

the notional cap for all credit swaps 

(broad-based group or index) at $100 

MM. 

The Commission is retaining the $250 

MM notional cap for both the equity 

(broad-based group or index) and FX 

asset classes. The Commission is 

confident that a $250 MM notional cap, 

along with the rounding convention 

discussed above, will sufficiently 

protect the anonymity, business 

transactions and market positions of the 

counterparties who engage in trades of 

a large size in these markets.333

The Commission agrees that the 

notional cap for commodity swaps 

should be lower than for other swaps 

and is setting the interim notional cap 

for ‘‘other commodities’’ at $25 MM. 

The Commission made this 

determination after reviewing block 

trade sizes for various commodities in 

the futures markets, exchange of futures 

for swaps (‘‘EFS’’) data on futures, and 

net position change data in futures.334

The Commission believes that setting 

the interim notional cap at such a low 

notional or principal amount will allow 

traders entering into very large swaps in 

the various ‘‘other commodity’’ markets 

a sufficient opportunity to hedge a swap 

transaction in the market, and will 

protect the identities, business 

transactions and market positions of 

those counterparties who enter into 

large commodity swaps. 

For the ‘‘other commodity’’ asset 

class, the Commission agrees that ‘‘other 

commodity’’ swaps are typically smaller 

than interest rate swaps. However, the 

Commission does not agree that it is 

appropriate to determine the notional 

cap according to units for each 

particular ‘‘other commodity;’’ such a 

rule is unnecessarily complicated and 

will lead to inconsistency across the 

various types of commodities and across 

all asset classes. Thus, the Commission 

believes that, at this time, the notional 

cap should be expressed as a dollar 

amount that will apply to all ‘‘other 

commodities’’ and not by different units 

of measurement (e.g., barrels, MWh, 

etc.). The Commission anticipates that a 

determination of whether a swap is 

capped will depend on whether the 

price of the underlying commodity as 

multiplied by the number of units is 

above the notional cap. Further, the 

Commission anticipates that the 

publicly disseminated information for a 

particular underlying asset may be in 

units that are adjusted based on the $25 

MM cap described below. For example, 

if crude oil is priced at $100 a barrel and 

two parties enter into a swap with a 

notional value of 260,000 barrels, the 

SDR may publicly disseminate ‘‘$25 

MM+’’ or may publicly disseminate 

‘‘250,000 bbl+.’’ 

E. Section 43.5—Time Delays for Public 

Dissemination of Swap Transaction and 

Pricing Data 

CEA section 2(a)(13)(E)(iii) provides 

that, with respect to cleared swaps, the 

rule promulgated by the Commission 

shall contain provisions ‘‘to specify the 

appropriate time delay for reporting 

large notional swap transactions (block 

trades) to the public.’’ In exercising its 

authority under CEA section 2(a)(13)(B) 

to ‘‘make 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,’’ the Commission is 

authorized to prescribe rules reflecting 

those provisions in CEA section 

2(a)(13)(E)(iii) for uncleared swap 

transactions described in CEA sections 

2(a)(13)(C)(iii) and (iv). Consistent with 

the Commission’s statutory obligations, 

proposed § 43.5(k)(1) specified that the 

time delay for the public dissemination 

of swap transaction and pricing data for 

a block trade or large notional swap 

shall commence at the time of execution 

of such block trade or large notional 

swap.335

Proposed § 43.5(k)(2) set the time 

delay for public reporting of 

standardized block trades and large 

notional swaps 336 at 15 minutes from 

the time of execution. The Proposing 

Release did not provide specific time 

delays for customized large notional offfacility swaps. Instead, proposed 

§ 43.5(k)(3) provided that public 

dissemination of ‘‘customized’’ large 

notional swaps would be subject to a 

time delay that may be prescribed by the 

Commission. The Commission also 

noted in the preamble to the Proposing 

Release a presumption that large 

notional swaps in the equity, credit, 


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337The Commission asked specific questions 

regarding time delays for large notional off-facility 

swaps. See Real-Time NPRM supra note 6, at 76167. 

338See supra note 97. 

339See CL–BlackRock; CL–Coalition for 

Derivatives End-Users; CL–Chesapeake Energy; CL– 

PIMCO; CL–SIFMA AMG; CL–ATA; CL–Freddie 

Mac; CL–ICI; CL–Vanguard; CL–Working Group of 

Commercial Energy End-users; CL–MFA; CL– 

MetLife; CL–Fannie Mae; CL–Jackson; CL–Eris; and 

CL–Encana. 

340See CL–FHLBanks. 

341The Commission notes that although these 

commenters are suggesting time delays for block 

trades and large notional off-facility swaps, the 

Commission is not considering appropriate 

minimum block sizes in this Adopting Release. 

342See CL–JPM; CL–WMBAA; CL–Barclays; CL– 

MetLife; and CL–GS. 

343See CL–ATA. 

344See CL–MS. 

345See CL–Better Markets. 

346See, e.g., CL–JPM; CL–Barclays; CL–Coalition 

for Derivatives End-Users; CL–FHLBanks; CL– 

ISDA/SIFMA; CL–SIFMA AMG; CL–Freddie Mac; 

CL–GFXD; CL–ABC/CIEBA; CL–ATA; CL–Cleary; 

CL–ICI; and CL–MFA. 

347See CL–SIFMA AMG. 

348See CL–ATA; CL–Barclays; CL–MS; CL– 

GFXD; CL–ISDA/SIFMA; and CL–BlackRock. 

349See CL–Committee on Capital Markets 

Regulation. 

350See CL–SDMA. 

351See CL–ATA. 

352See, e.g., CL–Tradeweb; CL–CME; CL–Markit. 

353See CL–NFPEEU. 

354See CL–Tradeweb. The Commission notes 

that, since the data that is being required to be 

publicly disseminated under part 43 and reported 

for regulatory purposes (as described in proposed 

part 45) are substantially similar, the ability for 

SEFs and DCMs to report the data fields required 

for regulatory purposes indicates that SEFs and 

DCMs should be able to report the data to an SDR 

that is required for public dissemination under part 

43. 

foreign exchange and interest rate asset 

classes (i.e., financial swaps) would be 

subject to the same 15 minute time 

delay proposed for block trades. The 

Commission solicited comments 

addressing whether 15 minutes would 

be an appropriate time delay for large 

notional swaps in the ‘‘other 

commodity’’ asset class, but 

acknowledged that longer time delays 

for the ‘‘other commodity’’ asset class 

may be appropriate.337

Twenty-three commenters expressed 

the view that the time delays for 

publicly disseminating block trades and 

large notional off-facility swaps should 

be longer than those described in the 

Proposing Release. The commenters 

recommended several alternatives for 

various types of swaps. Specifically, 

commenters recommended a range of 

time delays for public dissemination of 

block trades and large notional offfacility swaps, including end-of-day, 24 

hours, T+1, T+2 for large notional 

swaps,338 a minimum of four hours and 

180 days.339 One commenter 

recommended beginning with a time 

delay for block trades of 75 minutes and 

then decreasing the time delay to 

between 15 minutes and 45 minutes.340

The approach described by this 

commenter would be similar to the 

method for reducing time delays 

utilized by TRACE. The same 

commenter recommended that the time 

delay for large notional swaps should be 

at least 24 hours.341 Five commenters 

advised the Commission to adopt tiered 

time delays based on average daily 

trading volume or appropriate minimum 

block size.342 One recommended that 

the time delay should be set at the lesser 

of time it takes a dealer to cover its risk 

and 24 hours after execution.343

Another commenter recommended that 

illiquid trades be allowed to report 

weekly; the same commenter 

recommended that the Commission 

conduct an exhaustive study of illiquid 

bilateral contracts before deciding on an 

appropriate time delay.344

A commenter recommended that the 

time delay for financial swaps should be 

one minute or, alternatively, that there 

should be no delay. This commenter 

argued that a time delay must be 

directly related to the market in which 

the block trade or large notional swap is 

executed.345

Several commenters cautioned that 

the Commission needs more data before 

it can set time delays for block trades 

and large notional swaps.346 For 

example, one commenter noted that 

there is currently insufficient trading 

data available on which to base the 

determinations for block trades and 

public dissemination delays.347 This 

commenter suggested waiting until 

SDRs have collected the relevant data 

for the Commission to analyze. 

In its Proposing Release, the 

Commission solicited comments on the 

appropriate time delays for 

‘‘customized’’ large notional swaps, 

particularly for commodity swaps with 

physical underlying assets. Several 

commenters stated that different 

markets should have different time 

delays for public dissemination of block 

trades and large notional swaps. 

Specifically, one commenter stated that 

time delays should be based on asset 

class, two commenters advised that 

longer time delays are appropriate for 

swaps with underlying physical risk 

(e.g., large notional customized 

commodities trades); two commenters 

argued that reporting should be tailored 

for illiquid markets; and one commenter 

stated that time delays should be 

tailored within the foreign exchange 

asset class.348 Another commenter 

stated that time delays should initially 

be based on current market practices.349

One commenter contended that time 

delays should not be based on the 

method of execution or market 

participant and that a 15 minute time 

delay is adequate.350 This commenter 

expressed concern that the voice or 

hybrid systems would be allowed a 

longer delay over their electronic 

competitors and recommended that 

there be one universal time delay. 

A commenter argued that smaller 

transactions in illiquid markets should 

be handled similarly to block trades 

with respect to time delay.351 This 

commenter stated that, in illiquid 

markets, the notional or principal size of 

a swap may be lower and therefore may 

not qualify as a block trade or large 

notional swap. The commenter further 

explained that time delays for swaps 

with lower notional or principal 

amounts in illiquid markets may be just 

as important as the time delays for very 

large trades in more liquid markets. 

Commenters addressed harmonization 

between the CFTC and SEC time delay 

provisions. Some of these commenters 

asserted that the failure to harmonize 

the two Commissions’ rules could create 

arbitrage opportunities.352 One 

commenter asserted that differences in 

market structure for swaps and SBS, 

particularly with regard to end-user 

participation in the commodity swap 

markets, should be reflected in the 

rules.353

After considering the comments 

discussed above, the Commission is 

adopting § 43.5 to address time delays 

for the public dissemination of swap 

data as described below. As adopted, 

§ 43.5 incorporates the language from 

proposed § 43.5(k)(1) and replaces the 

language in proposed § 43.5(k)(2) and 

(3) in order to address commenters’ 

concerns and recommendations and to 

clarify the time delays for public 

dissemination of real-time data in 

consideration of the type of market 

participant, method of execution and 

asset class. Additionally, § 43.5 adopts 

interim time delays for all swaps until 

such time as appropriate minimum 

block sizes are finalized in a 

forthcoming Commission release. 

One commenter indicated that SEFs 

and DCMs should have the 

technological capability to 

electronically report the data fields 

described in proposed part 45.354 To 

ensure consistency and reduce reporting 

costs to market participants, the 

Commission has coordinated the time 

delays in this rule with the timeframes 

for regulatory reporting in the proposed 

part 45 (‘‘Swap Data Recordkeeping and 


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Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 1217 

355See 75 FR 76574. 

356However, the Commission notes that although 

the same data stream for reporting may be utilized 

by reporting parties, SEFs and DCMs, real-time data 

for public dissemination and regulatory data 

required to be sent to an SDR are viewed as separate 

regulatory requirements. 

357Appendix A to part 43 describes the 

‘‘execution timestamp’’ requirement for public 

dissemination. See discussion, infra. 

358See CL–JPM. 

359See comments relating to Implementation and 

Phase in discussed in section IV (‘‘Effectiveness/ 

Implementation and Interim Period’’) below. 

360 In addition to the initial temporary time 

delays for all swaps without appropriate minimum 

block sizes, as provided in final § 43.5(c), § 43.4(g) 

and (h) provide a rounding convention and caps on 

the public dissemination of notional or principal 

amounts to be applied to all swaps in order to help 

protect counterparties’ anonymity and the parties’ 

ability to hedge very large transactions. See 

discussion above. 

361The Commission recognizes that the 

establishment of appropriate minimum block sizes 

may be an ongoing process. Swaps that do not have 

appropriate minimum block sizes would continue 

to receive time delays pursuant to § 43.5(c), 

however once a swap has an appropriate minimum 

block size, only block trades and large notional offfacility swaps will receive the time delays § 43.5. 

362TRACE, which introduced post-trade 

transparency into the corporate bond market, 

followed a similar approach by reducing the 

amount of time delay for public dissemination over 

time. See CL–JPM. 

363Compliance dates are described below in 

section III (‘‘Effectiveness/Implementation and 

Interim Period’’). 

364See CL–Tradeweb. 

365To the extent that an appropriate minimum 

block trade size is established after the compliance 

date of the rule, the time delays for the block trades 

(and large notional off-facility swaps, as described 

immediately below) would be reduced after the one 

year period expires. For example, if the compliance 

date for an interest rate swap is July 1, 2012 and 

an appropriate minimum block size for interest rate 

swaps is effective on September 15, 2012, from June 

Continued 

Reporting Requirements’’) rules.355 The 

Commission anticipates that reporting 

parties may use one data reporting 

stream for both regulatory and real-time 

reporting to reduce costs and optimize 

efficiency.356 Accordingly, § 43.5, as 

adopted, harmonizes the time delays 

between the two regulatory 

requirements. 

The Commission has added § 43.5(b) 

to clarify the SDR’s responsibilities to 

publicly disseminate swap transaction 

and pricing data that is subject to a time 

delay. Section 43.5(b) provides that, 

with respect to any time delay that is 

associated with a particular swap, the 

SDR shall publicly disseminate the 

swap transaction and pricing data upon 

the precise expiration of the time delay 

specified in § 43.5 and as further 

described in appendix C to part 43 

(‘‘Time Delays for Public 

Dissemination’’). The time delay period 

is measured from the time of execution 

of the swap transaction; in this regard, 

all publicly reportable swap 

transactions are required to have an 

execution timestamp. An SDR must 

hold the data for public dissemination 

for the precise amount of time specified 

in § 43.5, as measured from the 

execution timestamp.357 For any 

publicly reportable swap transaction 

that is not subject to a time delay 

pursuant to § 43.5 or that is received by 

an SDR after a time delay has expired, 

such publicly reportable swap 

transactions shall be publicly 

disseminated by the SDR ‘‘as soon as 

technologically practicable’’ after the 

SDR receives the swap transaction and 

pricing data. 

One commenter recommended that 

the Commission require end of day 

reporting of aggregate trade volumes in 

order to facilitate analysis of market 

trends by market participants and the 

academic community.358 Several other 

commenters recommended that the 

Commission phase in the real-time 

public reporting of swap transaction and 

pricing data.359 The Commission 

acknowledges the commenter’s concern 

that certain swaps in illiquid markets 

may have small notional sizes, but may 

still need a time delay. In response, the 

Commission in adopting § 43.5(c) which 

provides interim time delays for all 

swaps, not just block trades and large 

notional off-facility swaps, but only to 

the extent that such swaps do not have 

an appropriate minimum block size.360

As previously discussed, the 

Commission intends to address 

appropriate minimum block sizes in its 

block trade re-proposal. Accordingly, it 

is possible that compliance with part 43 

may be required before the 

establishment of appropriate minimum 

block sizes for certain asset classes and/ 

or groupings of swaps within an asset 

class. In order to address this situation, 

§ 43.5(c) allows all swaps that do not 

have established appropriate minimum 

block sizes to utilize the time delays set 

forth in final § 43.5(d)–(h). As 

appropriate minimum block sizes are 

established for a particular category of 

swap, all swaps in such category that 

are below the appropriate minimum 

block size must be publicly 

disseminated ‘‘as soon as 

technologically practicable’’ after 

execution.361 Those swaps that are at or 

above the appropriate minimum block 

size will continue to receive the time 

delays set forth in § 43.5(d)–(h). 

In response to commenters’ arguments 

that the time delays for public 

dissemination of block trades and large 

notional off-facility swaps should be 

longer than 15 minutes, the Commission 

is phasing in the time delays for public 

dissemination. The Commission 

recognizes that it may take time for 

SEFs, DCMs and SDRs to ensure that the 

appropriate technology is in place; and 

market participants may need some 

phase in time to modify trading 

strategies to accommodate the new realtime public reporting rules. Thus, the 

Commission believes that providing 

longer time delays for public 

dissemination during the first year or 

years of real-time reporting will enable 

market participants to perfect and 

develop technology and to adjust 

hedging and trading strategies in 

connection with the introduction posttrade transparency.362

As adopted, § 43.5(d) describes the 

time delays for the public dissemination 

of swap transaction and pricing data 

relating to block trades executed 

pursuant to the rules of a SEF or DCM. 

With respect to such swaps, the 

Commission is imposing an initial time 

delay of 30 minutes for the one year 

beginning on the compliance date 363

(‘‘Year 1’’) and a 15-minute delay 

beginning on the first anniversary of the 

compliance date. These time delays will 

be assigned to all block trades executed 

pursuant to the rules of a SEF or DCM 

regardless of asset class or whether such 

trade was made available for trading on 

the SEF or DCM. The Commission 

believes that SEFs and DCMs will have 

the technology available to ensure 

compliance to report data to SDRs 

within the time delays for public 

dissemination described in this 

section.364

Further, until the Commission 

establishes an appropriate minimum 

block size for a swap or group of swaps, 

the time delays set forth in § 43.5(d) 

shall apply to all swaps executed on or 

pursuant to the rules of a SEF or DCM 

that do not have an appropriate 

minimum block size (including swaps 

that are not made available for trading 

on the SEF or DCM, but are executed on 

or pursuant to the rules of a SEF or 

DCM), so that all such swaps will be 

subject to a 30 minute time delay for 

public dissemination for Year 1 and a 15 

minute time delay beginning on the first 

anniversary of the compliance date, as 

described in § 43.5(c)(2). When an 

appropriate minimum block size is set 

for a swap or group of swaps, and such 

swap is executed on or pursuant to the 

rules of a SEF or DCM, swap 

transactions that fall below the 

appropriate minimum block size are 

required to be publicly disseminated ‘‘as 

soon as technologically practicable’’ and 

only block trades would be subject to a 

30- or 15-minute time delay.365 The 


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1, 2012—September 14, 2012, all swaps in the 

interest rate asset class would receive the time 

delays for ‘‘Year 1.’’ From September 15, 2012— 

June 30, 2013 only block trades and large notional 

off-facility swaps in the interest rate asset class will 

receive the time delays described under ‘‘Year 1,’’ 

while any swap in the interest rate asset class that 

is not a block trade or large notional off-facility 

swap must be reported and publicly disseminated 

‘‘as soon as technologically practicable.’’ In this 

example, beginning on July 1, 2013 block trades and 

large notional off-facility swaps in interest rates will 

receive the time delay described for beginning on 

the first or second anniversary (depending on the 

type of execution and market participants) and nonblock trades/non-large notional off-facility swaps in 

the interest rate asset class would be required to be 

reported and publicly disseminated ‘‘as soon as 

technologically practicable’’ after execution. 

366The price transparency with respect to SEFs 

and DCMs may be in the form of pre-trade price 

transparency (depending on the execution method) 

and post-trade price transparency (through sharing 

swap execution data with those that have trading 

privileges on the SEF or DCM). 

367Such large notional off-facility swaps will only 

be executed when there is an exception to the 

mandatory clearing requirement and to the trade 

execution mandate. 

368Additionally, the Commission believes that 

off-facility swaps that are excepted from the 

mandatory clearing requirement pursuant to CEA 

section 2(h)(7) and those swaps that are determined 

to be required to be cleared under CEA section 

2(h)(2) but are not cleared should not be included. 

369The description of these two scenarios is 

derived from the language in CEA Section 

2(a)(13)(C). 

370Accordingly, the Commission has sought to 

substantially align the time delays for public 

dissemination with the timeframes for regulatory 

reporting. 

371As mentioned above, § 43.5(e)(1) excludes 

such swaps from this category of time delays for 

public dissemination. § 43.5(e)(1) also excludes 

swaps that are required to be cleared under CEA 

section 2(h)(2) but are not cleared because no DCO 

is available to clear. 

Commission believes that parties that 

choose to execute on or pursuant to the 

rules of a SEF or DCM consent to such 

price transparency; 366 therefore shorter 

time delays for public dissemination 

(i.e., post-trade transparency) are 

appropriate as compared to certain offfacility swaps. 

The Commission agrees that swaps in 

less liquid markets, as well as large 

notional off-facility swaps, may be 

subject to longer time delays, while 

shorter time delays are appropriate for 

swaps in more liquid markets. Swaps in 

the ‘‘other commodity’’ asset class and 

swaps in which non-SDs/non-MSPs are 

counterparties tend to be less liquid 

(particularly when such parties are endusers) and may require additional time 

to offset risk. The Commission also 

believes that large notional off-facility 

swaps that are subject to the mandatory 

clearing requirement (i.e., swaps that are 

not executed on or pursuant to the rules 

of a SEF or DCM but are required to be 

cleared pursuant to CEA section 2(h)(1) 

and Commission action) will tend to be 

more liquid than other large notional 

off-facility swaps.367

For large notional off-facility swaps 

subject to the mandatory clearing 

requirement, the Commission believes 

that a distinction should be made 

between different classes of reporting 

parties for the purposes of time delays 

for public dissemination.368 Large 

notional off-facility swaps that are 

subject to mandatory clearing and that 

have at least one SD or MSP as a 

counterparty, should have the same 

time delays as block trades executed 

pursuant to the rules of a SEF or DCM. 

The Commission believes that SDs and 

MSPs will have the ability to report realtime data to SDRs within the time delay 

periods. Further, the Commission 

believes that a difference in the time 

delay between swaps executed offfacility that are subject to the mandatory 

clearing requirement and those executed 

on or pursuant to the rules a SEF or 

DCM could discourage SDs and MSPs 

from executing such swaps on or 

pursuant to the rules of a trading 

platform, which would inhibit the 

enhancement of price discovery. 

As adopted, § 43.5(e) provides time 

delays for large notional off-facility 

swaps that are subject to the mandatory 

clearing requirement. Section 43.5(e)(1) 

provides that the time delays in § 43.5(e) 

do not apply to (i) off-facility swaps that 

are excepted from the mandatory 

clearing requirement in accordance with 

CEA section 2(h)(7) and the 

Commission’s regulations; and (ii) those 

swaps that are subject to the clearing 

mandate under CEA section 2(h)(2) but 

which are not cleared.369 The swaps 

that are not covered by § 43.5(e) are 

subject to the longer time delays 

described in final § 43.5(f)–(h). 

Section 43.5(e)(2) applies to large 

notional off-facility swaps that are 

subject to the mandatory clearing 

requirement, in which at least one party 

to such swap is an SD or MSP. Real-time 

data relating to such swaps shall be 

subject to a time delay for public 

dissemination of 30 minutes for the first 

year beginning on the compliance date. 

Section 43.5(e)(2)(B) specifies that the 

time delay shall be reduced to 15 

minutes beginning on the first 

anniversary of the compliance date of 

part 43. These time delays correspond to 

the time delays established in § 43.5(d) 

for block trades. The Commission 

believes that SDs and MSPs will have 

the technology to ensure these swaps 

are reported to an SDR prior to the 

expiration of the time delays for public 

dissemination.370

With respect to large notional offfacility swaps subject to the clearing 

mandate in which neither party is an SD 

or MSP, such swaps will receive a 

longer time delay for public 

dissemination than those swaps in 

which an SD or MSP is a counterparty. 

The Commission believes that reporting 

parties that are not SDs or MSPs and 

that do not invoke the end-user 

exception pursuant to CEA section 

2(h)(7) and Commission regulations,371

may not have the same level of 

infrastructure or reporting technology as 

SDs and MSPs. Large notional offfacility swaps that are subject to the 

mandatory clearing requirement will 

tend to be liquid and generally should 

be reported sooner than those not 

subject to the mandatory clearing 

requirement. Making such swap 

transaction and pricing data available to 

market participants quickly and 

efficiently will enhance price discovery 

in these markets, while the longer time 

delays for public dissemination in less 

liquid markets will provide market 

participants with a longer period in 

which to hedge the risk associated with 

their liquid large notional off-facility 

swaps. 

Accordingly, § 43.5(e)(3), as adopted, 

provides longer time delays for large 

notional off-facility swaps that are 

subject to mandatory clearing and in 

which neither party is an SD or MSP. 

Specifically, § 43.5(e)(3)(A) provides 

that for Year 1, which begins on the 

compliance date, such large notional 

off-facility swaps shall be subject to a 

four hour time delay from the time of 

execution to the time of public 

dissemination by the SDR. Section 

43.5(e)(3)(B) provides that beginning on 

the first anniversary of the compliance 

date of part 43 and for the year 

following (‘‘Year 2’’), the time delay for 

public dissemination will be reduced to 

two hours from the time of execution; 

§ 43.5(e)(3)(C) provides that beginning 

on the second anniversary of the 

compliance date and thereafter, the time 

delay for large notional off-facility 

swaps will be reduced to one hour after 

execution. 

Additionally, § 43.5(c)(3) provides 

that, until the Commission establishes 

an appropriate minimum block size for 

a particular swap or group of swaps, the 

time delays set forth in § 43.5(e) shall 

apply to publicly reportable swap 

transactions that do not have 

appropriate minimum block sizes, with 

respect to (i) off-facility swaps that are 

subject to the mandatory clearing 

requirement, excluding those off-facility 

swaps that are excepted from the 

mandatory clearing requirement 

pursuant to CEA section 2(h)(7); and (ii) 

those swaps that are determined to be 

required to be cleared under CEA 


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372CEA section 2(h)(7)(C)(i) provides the 

financial entity definition as it relates to Section 

723 of the Dodd-Frank Act. Specifically, the 

definition states that for the purposes of paragraph 

2(h), the term ‘‘financial entity’’ means: ‘‘(I) a swap 

dealer; (II) a security-based swap dealer; (III) a 

major swap participant; (IV) a major security-based 

swap participant; (V) a commodity pool; (VI) a 

private fund as defined in section 202(a) of the 

Investment Advisers Act of 1940 (15 U.S.C. 80–b– 

2(a)); (VII) an employee benefit plan as defined in 

paragraphs (3) and (32) of section 3 of the Employee 

Retirement Income Security Act of 1974 (29 U.S.C. 

1002); (VIII) a person predominantly engaged in 

activities that are in the business of banking, or in 

activities that are financial in nature, as defined in 

section 4(k) of the Bank Holding Company Act of 

1956.’’ Additionally, CEA section 2(h)(7)(C)(ii) 

provides exclusions to the definition by stating that 

‘‘the Commission shall consider whether to exempt 

small banks, savings associations, farm credit 

system institutions, and credit unions, including— 

(I) depository institutions with total assets of 

$10,000,000,000 or less; (II) farm credit system 

institutions with total assets of $10,000,000,000 or 

less; or credit unions with total assets of 

$10,000,000,000 or less.’’ CEA section 2(h)(7)(C)(iii) 

further provides an important limitation to the 

definition of financial entity by stating that ‘‘such 

definition shall not include an entity whose 

primary business is providing financing, and uses 

derivatives for the purpose of hedging underlying 

commercial risks related to interest rate and foreign 

currency exposures, 90 percent or more of which 

arise from financing that facilitates the purchase or 

lease of products, 90 percent or more of which are 

manufactured by the parent company or another 

subsidiary of the parent company.’’ 

373Proposed part 45 recognizes that certain endusers may not have an ability to verify trade 

information electronically which may increase the 

time for the reporting party to verify the primary 

economic terms and real-time data and 

consequently, the time for the reporting party to 

report such data to an SDR pursuant to proposed 

part 45. See 75 FR 76574. 

section 2(h)(2) but which are not 

cleared. Those off-facility swaps that are 

subject to (i) and (ii), immediately 

above, will follow the time delay set 

forth in § 43.5(e)(2) (i.e., 30 minutes for 

the year beginning on the compliance 

date and 15 minutes beginning on the 

first anniversary of the compliance 

date). Those off-facility swaps that are 

subject to the mandatory clearing 

requirement in which neither party is an 

SD or MSP will follow the time delay 

set forth in § 43.5(e)(3) (i.e., four hours 

for the year beginning on the 

compliance date, two hours for the year 

beginning on the first anniversary of the 

compliance date and one hour 

beginning on the second anniversary of 

the compliance date). Once an 

appropriate minimum block size is 

established for a particular swap or 

group of swaps, all swaps described in 

§ 43.5(e) that are below the appropriate 

minimum block size shall be reported 

‘‘as soon as technologically practicable’’ 

and only large notional off-facility 

swaps shall receive the time delays for 

public dissemination described in 

§ 43.5(e). 

The Proposing Release stated a 

presumption that the time delay for 

financial bilateral swaps would be 

shorter than the time delay for nonfinancial bilateral swaps. In this regard, 

two commenters asserted that 

commodity swaps should have longer 

time delays for public dissemination 

than swaps in other asset classes; one 

stated that financial swaps should have 

shorter time delays than ‘‘other 

commodity’’ swaps. The Commission 

agrees and believes that a distinction 

should be made between swaps that are 

in the interest rates, equity, credit and 

foreign exchange asset classes (i.e., 

financial swaps) and swaps in the 

‘‘other commodity’’ asset class, since 

such ‘‘other commodity’’ swaps 

generally have physical commodities as 

the underlying asset or reference price/ 

index. The Commission believes a 

longer time delay for the ‘‘other 

commodity’’ swaps is necessary because 

(i) such swaps reference underlying 

physical commodities; and (ii) the 

hedging strategies for swaps in the 

‘‘other commodity’’ asset class are 

generally more complex and may take 

longer than financial swaps (e.g., 

interest rate swaps, which can be 

quickly hedged in the swaps, futures or 

treasury markets). 

As adopted, § 43.5(f) provides the 

time delays for public dissemination of 

large notional off-facility swaps in the 

interest rate, credit, foreign exchange 

and equity asset classes, that are not 

subject to the mandatory clearing 

requirement (or are excepted from such 

requirement pursuant to CEA section 

2(h)(7)), in which at least one party is 

an SD or MSP. Section 43.5(f)(1) 

provides that the time delay for such 

large notional off-facility swaps for Year 

1 shall last for one hour following 

execution of such large notional offfacility swap. However, § 43.5(f)(1) 

includes a provision applicable to those 

large notional off-facility swaps in the 

interest rate, credit, foreign exchange 

and equity asset classes in which the 

non-SD/non-MSP counterparty is not a 

financial entity, as defined in CEA 

section 2(h)(7)(C) and Commission 

regulations.372 Under this provision, for 

situations where real-time swap 

transaction and pricing data is received 

by the SDR later than one hour after the 

time of execution, the SDR must 

publicly disseminate such data ‘‘as soon 

as technologically practicable’’ after it 

receives such data. The purpose of this 

accommodation is to align the time 

delays for public dissemination with the 

timeframes provided in the regulatory 

reporting requirements in order to 

reduce reporting costs to market 

participants and to avoid 

inconsistencies between the reporting 

rules.373

Section 43.5(f)(2) establishes a time 

delay for public dissemination of such 

large notional off-facility swaps in the 

interest rate, credit, foreign exchange 

and equity asset classes of 30 minutes 

following the execution such swap for 

Year 2. Section 43.5(f)(2) provides the 

same accommodation for large notional 

off-facility swaps in the interest rate, 

credit, foreign exchange and equity asset 

classes in which the non-SD/non-MSP 

counterparty is not a financial entity, as 

defined in CEA section 2(h)(7)(C) and 

Commission regulations. Section 

43.5(f)(3) states that beginning on the 

second anniversary of the compliance 

date, the time delay for public 

dissemination for all large notional offfacility swaps in the interest rate, credit, 

foreign exchange and equity asset 

classes in which at least one 

counterparty is an SD or MSP shall be 

30 minutes, regardless of the status of 

any non-SD/non-MSP counterparty. 

Section 43.5(c)(4) provides that until 

the Commission establishes an 

appropriate minimum block size for a 

particular swap or group of swaps, the 

time delays set forth in § 43.5(f) shall 

apply to publicly reportable swap 

transactions that do not have 

appropriate minimum block sizes, with 

respect to off-facility swaps in the 

interest rate, credit, foreign exchange 

and equity asset classes that are not 

subject to the mandatory clearing 

requirement, and in which at least one 

counterparty is an SD or MSP. These 

time delays shall be one hour for Year 

1 and reduced to 30 minutes beginning 

on the first anniversary of the 

compliance date. However, those offfacility swaps in the interest rate, credit, 

foreign exchange and equity asset 

classes, in which the non-SD/non-MSP 

counterparty is not a financial entity as 

defined in CEA section 2(h)(7)(C) and 

Commission regulations, shall receive 

the same accommodation to the time 

delay for public dissemination for Year 

1 and Year 2, as described in § 43.5(f)(1) 

and (2). Once an appropriate minimum 

block size is established for a particular 

swap or group of swaps, all swaps 

described in § 43.5(f) that are below the 

appropriate minimum block size shall 

be publicly disseminated ‘‘as soon as 

technologically practicable’’ and only 

large notional off-facility swaps shall 

receive the time delays for public 

dissemination described in § 43.5(f). 

As previously noted, the Commission 

believes that large notional off-facility 

swaps in the ‘‘other commodity’’ asset 

class should receive longer time delays 

for public dissemination, as it may take 

longer to hedge such swap transactions 

involving physical underlying assets. 

The Commission believes that the 


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374Section 43.2 defines ‘‘business hours’’ to mean 

consecutive hours during on one or more business 

days. Section 43.2 also defines ‘‘Business day’’ to 

mean the twenty-four hour day, on all days except 

Saturdays, Sundays and legal holidays, in the 

location of the reporting party or registered entity 

reporting data for the swap. 

‘‘other commodity’’ asset class will 

likely have more non-SDs/non-MSPs 

that are excepted pursuant to CEA 

section 2(h)(7) (i.e., non-financial endusers) than the other defined asset 

classes. Market participants and 

commenters have expressed concern 

about the ability to hedge physical 

commodity swaps and suggested that 

longer time delays may be appropriate 

for such swaps. Accordingly, in 

§ 43.5(g), the Commission has 

established longer time delays for large 

notional off-facility swaps in the ‘‘other 

commodity’’ asset class. 

Section 43.5(g) establishes the time 

delays for the public dissemination of 

large notional off-facility swaps in the 

‘‘other commodity’’ asset class that are 

not subject to the mandatory clearing 

requirement (or are excepted from such 

requirement pursuant to CEA section 

2(h)(7)), in which at least one party is 

an SD or MSP. Specifically, § 43.5(g)(1) 

provides that for Year 1, the time delay 

for public dissemination is four hours 

following the execution of the large 

notional off-facility swap. However, 

final § 43.5(g)(1) includes a provision 

similar to that in § 43.5(f)(1) and (2), for 

those large notional off-facility swaps in 

the ‘‘other commodity’’ asset class that 

are not subject to the mandatory 

clearing requirement and in which the 

non-SD/non-MSP counterparty is not a 

financial entity as defined in CEA 

section 2(h)(7)(C) and Commission 

regulations. For such swaps, where the 

real-time swap transaction and pricing 

data is received by the SDR more than 

four hours after execution, the SDR 

must publicly disseminate such data ‘‘as 

soon as technologically practicable’’ 

after it receives such data. As noted 

above with respect to § 43.5(f)(1) and 

(2), the purpose of the provision in 

§ 43.5(g)(1) is to align the time delays for 

public dissemination with the 

timeframes for regulatory reporting in 

order to reduce reporting costs to market 

participants and to avoid 

inconsistencies between the reporting 

rules. 

Section 43.5(g)(2) provides a two-hour 

time delay for the public dissemination 

of large notional off-facility swaps in the 

‘‘other commodity’’ asset class, in which 

at least one party is an SD or MSP, for 

Year 2. Section 43.5(g)(2) provides a 

similar accommodation to § 43.5(f)(1) 

and (2) for large notional off-facility 

swaps in the ‘‘other commodity’’ asset 

class in which the non-SD/non-MSP 

counterparty is not a financial entity, as 

defined in CEA section 2(h)(7)(C) and 

Commission regulations. Section 

43.5(g)(3) specifies that the time delay 

for public dissemination, beginning on 

the second anniversary of the 

compliance date, for all large notional 

off-facility swaps in the ‘‘other 

commodity’’ asset class, in which at 

least one counterparty is an SD or MSP, 

shall be two hours, regardless of the 

status of any non-SD/non-MSP 

counterparty. 

Section 43.5(c)(5) additionally 

provides that until the Commission 

establishes an appropriate minimum 

block size for a particular swap or group 

of swaps, the time delays set forth in 

§ 43.5(g) shall apply to publicly 

reportable swap transactions that do not 

have appropriate minimum block sizes, 

with respect to off-facility swaps in the 

‘‘other commodity’’ asset class that are 

not subject to the mandatory clearing 

requirement and in which at least one 

counterparty is an SD or MSP. 

Specifically, the time delays shall be 

four hours for Year 1 and two hours 

beginning on the first anniversary of the 

compliance date. However, those offfacility swaps in the ‘‘other commodity’’ 

asset class in which the non-SD/nonMSP counterparty is not a financial 

entity, as defined in CEA section 

2(h)(7)(C) and Commission regulations, 

shall receive the same accommodation 

to the time delay for public 

dissemination during Year 1 and Year 2, 

as described in § 43.5(g)(1) and (2). Once 

an appropriate minimum block size is 

established for a particular swap or 

group of swaps, all swaps described in 

§ 43.5(g) that are below the appropriate 

minimum block size shall be reported 

‘‘as soon as technologically practicable’’ 

and only large notional off-facility 

swaps shall receive the time delays for 

public dissemination described in 

§ 43.5(g). 

Several commenters recommended 

that end-user to end-user large notional 

swaps have longer time delays. The 

Commission agrees: Such swaps tend to 

be customized and the reporting party 

for such swaps may be less 

sophisticated and have less ability to 

leverage existing and new technology as 

compared to an SD or MSP. The longer 

time delays for public dissemination 

ensures consistency to allow the 

reporting party to mitigate reporting 

costs by sending real-time swap data at 

the same time that regulatory data is 

sent to an SDR. 

Section 43.5(h) prescribes the time 

delay for the public dissemination of 

large notional off-facility swaps in 

which neither counterparty is an SD or 

MSP. Pursuant to § 43.5(h)(1), for Year 

1, the time delay for public 

dissemination of swap transaction and 

pricing data for such swaps shall be 48 

business hours after execution of the 

swap.374 Pursuant to § 43.5(h)(2) the 

time delay for such swaps will reduce 

to 36 business hours for Year 2. Finally, 

pursuant to § 43.5(h)(3), beginning on 

the second anniversary of the 

compliance date for part 43, the time 

delay for such swaps will be 24 business 

hours. 

Additionally, § 43.5(c)(6) provides 

that until the Commission establishes an 

appropriate minimum block size for a 

particular swap or group of swaps, the 

time delays set forth in § 43.5(h) shall 

apply to publicly reportable swap 

transactions that do not have 

appropriate minimum block sizes, with 

respect to off-facility swaps in which 

neither counterparty is an SD or MSP. 

Once an appropriate minimum block 

size is established for a particular swap 

or group of swaps, all swaps described 

in § 43.5(h) that are below the 

appropriate minimum block size shall 

be reported ‘‘as soon as technologically 

practicable’’ and only large notional offfacility swaps shall receive the time 

delays for public dissemination 

described in § 43.5(h). 

With respect to the comment that 15 

minutes is a sufficient time delay for all 

swaps, the Commission believes 15 

minutes is a sufficient time delay for 

swaps executed on or pursuant to the 

rules of a SEF or DCM and those swaps 

subject to mandatory clearing in which 

at least one party is an SD or MSP. 

However, the Commission has 

determined to phase in time delays over 

a two year period and, consistent with 

comments received and in order to 

minimize implementation costs, has 

adopted § 43.5(d) and (e)(2). Further, as 

discussed above, the Commission 

believes that large notional off-facility 

swaps should be provided longer time 

delays based on market participant and 

asset class. 

The Commission is also adopting 

§ 43.5(c)(7), which provides that, upon 

the establishment of an appropriate 

minimum block size for a particular 

swap or category of swaps, all publicly 

reportable swap transactions that are 

below the appropriate minimum block 

size shall be publicly disseminated ‘‘as 

soon as technologically practicable’’ 

after execution pursuant to § 43.3. The 

Commission believes that § 43.5(c)(7) 

clarifies that, as an appropriate 

minimum block size becomes effective 

for a swap or group of swaps, registered 

entities, market participants and swap 


tkelley on DSK3SPTVN1PROD with RULES2
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375See CL–Better Markets. 

376Commenters include: FHL Banks; IPAA; IECA; 

MFA; Working Group of Commercial Energy Firms; 

ISDA/SIFMA; ABC/CIEBA; GFXD; Better Markets; 

Committee on Capital Markets Regulation; COPE; 

Coalition of Energy End-Users; NFPEEU; Markit; 

Tradeweb; DTCC; TriOptima; Reval; MarkitSERV; 

Cleary; Argus; Professor Darrell Duffie; Coalition for 

Derivatives End-Users; Barclays; API; and AGA. 

counterparties should anticipate that 

public dissemination of swap data for 

transactions below the appropriate 

minimum block size will occur 

significantly sooner (i.e., ‘‘as soon as 

technologically practicable’’) following 

execution of a publicly reportable swap 

transaction. 

With respect to the contention that 

shorter or no time delays are 

appropriate, the Commission notes that 

CEA section 2(a)(13)(E)(iii) explicitly 

requires the Commission to promulgate 

rules establishing time delays for 

reporting large notional swaps (block 

trades). While the Commission agrees 

that financial swaps should have shorter 

time delays, the Commission believes 

that one minute—as suggested by one 

commenter—is insufficient for many 

large trades, particularly where 

transparency is being introduced into 

the swaps market for the first time.375

As noted above, the appropriate 

minimum block size for swaps will be 

addressed in the block trade re-proposal 

that will be published for comment in 

the Federal Register. Until an 

appropriate minimum block size is set 

for a swap or grouping of swaps, all 

such swaps will receive time delays for 

public dissemination. As explained 

above, the Commission is initially 

adopting longer time delays and is 

reducing those time delays over time in 

an effort to allow market participants to 

become accustomed to reporting and 

publicly disseminating, to minimize 

costs to market participants and 

registered entities and to ensure that 

market participants have adequate time 

to hedge their large swap transactions. 

Several commenters advised that the 

Commission needs more data before it 

can set appropriate minimum block 

sizes and time delays for public 

dissemination of block trades and large 

notional off-facility swaps. The 

Commission agrees that these concerns 

are valid with respect to the 

determination of appropriate minimum 

block sizes, but does not believe that 

additional data is needed for setting 

time delays for public dissemination. 

The Commission has considered all 

comments relating to the time delays for 

public dissemination, and as discussed 

above, § 43.5 takes into account the 

liquidity of swaps; the ability for certain 

reporting parties to report to SDRs; the 

cost-benefit considerations of reporting 

real-time swap pricing and transaction 

data; the cost-benefit considerations of 

publicly disseminating swap pricing 

and transaction data; and the statutory 

mandate to provide post-trade 

transparency and enhance price 

discovery in the swaps markets. 

In its final rule, the Commission has 

added appendix C to part 43 to further 

clarify the time delays discussed in 

§ 43.5(d)–(h) as well as the interim time 

delays described in § 43.5(c); appendix 

C to part 43 provides Tables C1–C6, 

each of which represent the time delays 

for a particular type of swap or swaps 

described in § 43.5. 

Several commenters requested that 

the SEC’s and the Commission’s 

respective public dissemination time 

delay rules be harmonized. The 

Commission has routinely coordinated 

with the SEC regarding the time delays 

for public dissemination of certain swap 

transaction and pricing data; however, 

the two Commissions have jurisdiction 

over different types of swaps and, as a 

result, a different concentration of 

market participants. For example, the 

‘‘other commodity’’ asset class will tend 

to have significantly more non-SD/nonMSP counterparties than the credit or 

equity asset classes. 

By initially providing time delays for 

the public dissemination of all swaps, 

the Commission will ensure that some 

public dissemination occurs from the 

outset, prior to the adoption of rules for 

appropriate minimum block sizes. Once 

the appropriate minimum block sizes 

for particular swaps or swap categories 

are adopted, only swaps that have a 

notional or principal amount at or above 

the appropriate minimum block size 

threshold will receive a time delay for 

public dissemination, and all other 

swaps in the asset class (or sub-asset 

class or grouping of swaps) must be 

publicly disseminated by an SDR ‘‘as 

soon as technologically practicable.’’ 

Providing post-trade price transparency 

in the swaps markets, even if initially 

delayed during an interim period, will 

enhance price discovery and increase 

transparency. Additionally, as 

appropriate minimum block sizes are 

finalized, transparency and price 

discovery in the swaps markets will be 

further enhanced as swap transaction 

and pricing data for swaps below the 

appropriate minimum block size is 

publicly disseminated ‘‘as soon as 

technologically practicable.’’ 

F. Appendix A to Part 43 

CEA section 2(a)(13)(B) ‘‘authorizes 

the Commission to make 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.’’ Consistent with this 

authorization, the Commission 

proposed appendix A to proposed part 

43. That provision established the 

appropriate form and manner in which 

swap transaction and pricing data shall 

be publicly disseminated. Specifically, 

appendix A to proposed part 43 

included: (1) Data fields to be publicly 

disseminated; (2) a description of the 

type of information to be captured in the 

data fields; (3) an example of how the 

data fields may be reported; and (4) the 

application of the data fields. 

To account for the differences in 

publicly reportable swap transactions 

among asset classes, the descriptions of 

the data fields in the Proposing Release 

were not intended to be prescriptive; 

rather, the data fields were intended to 

provide flexibility to report various 

types of swaps while achieving 

consistency in the data. Further, certain 

data fields described in the Proposing 

Release may not be relevant to certain 

types of transactions; for such 

transactions, such data fields would not 

be publicly disseminated. For example, 

the swap transaction and pricing data 

that is publicly disseminated with 

respect to an uncleared off-facility swap 

will likely be different than those swaps 

that are executed on a SEF or DCM. 

Appendix A to proposed part 43 was 

intended to ensure that the swap 

transaction and pricing data that is 

publicly disseminated is sufficient to 

give meaning to the price of the publicly 

reportable swap transaction, while 

protecting the anonymity of the 

counterparties and considering both the 

potential effects of the proposal on 

market liquidity and the cost burden of 

reporting. 

The Commission requested general 

comments regarding all aspects of the 

data fields, and asked specific questions 

related to specific data field including 

(i) whether to add or delete data fields; 

(ii) effects on market liquidity; and (iii) 

the appropriate format for data and 

manner of public dissemination. 

Twenty-six commenters addressed 

various issues related to the data 

fields.376 These commenters focused on 

specific data fields, the value of 

reporting data, the Commission’s ability 

to modify data fields, pricing 

information for customized swaps, enduser to end-user reporting of data and 

harmonization with the SEC with regard 

to data fields that must be publicly 

disseminated. 

Two commenters asserted that endusers will face a greater burden in 


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377See CL–COPE; CL–IECA. 

378See CL–Coalition of Energy End-Users; CL– 

IPAA. 

379See CL–Coalition of Energy End-Users. 

380See CL–NFPEEU; CL–Coalition of Energy EndUsers. 

381See CL–MarkitSERV. 

382See CL–ABC/CIEBA. 

383See CL–Coalition for Derivatives End-Users; 

CL–Working Group of Commercial Energy Firms; 

and CL–ISDA/SIFMA. 

384See CL–DTCC; CL–FHLBanks; and CL–Reval. 

385See CL–MarkitSERV. 

386See CL–ISDA/SIFMA. The ISDA and SIFMA 

joint comment letter further argued that bilaterally 

executed trades may contain a premium over 

market which would also need to be excluded from 

public dissemination to prevent the price from 

being misinterpreted by market observers. 

387See CL–Working Group of Commercial Energy 

Firms. 

388See CL–MarkitSERV. 

389See CL–Working Group of Commercial Energy 

Firms; CL–GFXD; and CL–ISDA/SIFMA. 

390See, e.g., CL–ISDA/SIFMA; CL–Working 

Group of Commercial Energy Firms. 

391See CL–ISDA/SIFMA. 

392See CL–Working Group of Commercial Energy 

Firms. 

393See CL–ISDA/SIFMA. The FRBNY’s 

guidelines are included under ‘‘Line Item 

Instructions for Derivatives and Off-Balance Sheet 

Items Schedule HC–L’’ in the Board of Governors 

of the Federal Reserve System’s ‘‘Instructions for 

Preparation of Consolidated Financial Statements 

for Bank Holding Companies Reporting Form FR Y– 

9C,’’ available at http://www.federalreserve.gov/ 

reportforms/forms/FR_Y-9C20110630_i.pdf (last 

visited Nov. 9, 2011). 

reporting the real-time data for public 

dissemination since end-users only 

maintain trading capabilities and 

associated information technology to 

meet their current commercial needs.377

These commenters argue that the 

burden placed on end-users for 

reporting end-user to end-user trades 

(i.e., neither party is an SD or MSP) is 

not justified by the limited value of the 

data. These commenters argued that 

under the Proposing Release end-users 

would be required to create systems, 

hire additional personnel and purchase 

technology, which may compel such 

end-users to only enter into transactions 

with SDs and MSPs. According to the 

commenters, these requirements would 

hinder the ability of end-users to 

manage commercial risk and increase 

their costs, which they would then pass 

on to their consumers. 

Similarly, two commenters argued 

that data for off-facility swaps involving 

end-users do not have value for the 

purposes of price discovery; in their 

view, the cost burdens to send the swap 

transaction and pricing data for public 

dissemination would be substantial.378

They contend that off-facility end-user 

swaps should not be subject to Section 

727 of the Dodd-Frank Act. One 

commenter contended that if the 

Commission were to subject off-facility 

end-user swaps to real-time reporting 

requirements, end-users should be 

allowed to utilize a number of options 

for compliance with the real-time 

reporting requirements and only core 

commercial terms applicable to the 

swap should be reported.379

Two additional commenters similarly 

argued that until certain other 

definitions are finalized (e.g., swap, SD, 

MSP, non-financial commodity), it is 

premature to comment on the data fields 

described in appendix A with respect to 

energy commodity swaps.380

One commenter argued that the 

Commission should follow the approach 

taken by the SEC in its proposal to allow 

SDRs to define the relevant fields based 

on general guidelines so that real-time 

reporting can be flexible enough to track 

market trends.381 Another commenter 

expressed concern that the SDR may not 

have sufficient knowledge to identify all 

information in its possession and could 

inadvertently disclose the identity of a 

swap counterparty; the commenter 

therefore requested more guidance on 

what should and what should not be 

publicly disseminated.382

Three commenters asserted that credit 

terms should not be publicly 

disseminated. One of these commenters 

contended that the public dissemination 

of such terms could cause confusion, 

while the other commenters wrote that 

public dissemination could have a 

negative impact since market 

participants could determine a 

counterparty’s view on the 

creditworthiness of another 

counterparty.383

Three commenters argued that the 

public dissemination of an indication 

that a swap is bespoke could confuse 

the market since all of the other terms 

of the bespoke swap that make up the 

price would not be publicly 

disseminated.384 The commenters stated 

that since the public dissemination of 

bespoke swaps does not enhance price 

discovery, such swap transaction and 

pricing data should not be required to 

be reported. One commenter suggested 

that condition flags may be needed in 

the swaps markets to provide 

indications of established 

conventions.385

Several commenters addressed 

specific data fields set forth in appendix 

A to proposed part 43. The comments 

on these specific data fields are 

summarized as follows: 

• Additional Price Notation—One 

commenter indicated that the 

‘‘Additional Price Notation’’ field 

should not be publicly disseminated 

since it will provide information on one 

party’s creditworthiness to another 

party.386 Another commenter argued 

that the ‘‘Additional Price Notation’’ 

data field is likely to have little 

application for most commodity 

transactions and that it will be 

challenging to compute and populate 

such field in real-time.387 Another 

commenter stated that the pricing and 

separate display of an ‘‘Additional Price 

Notation’’ data field could make the 

price of publicly reported swaps more 

meaningful; however, the commenter 

cautioned that the implementation of a 

standardized approach for calculating 

the amount in the ‘‘Additional Price 

Notation’’ data field would be 

challenging, would take time and could 

confuse the market if parties took 

different approaches toward calculating 

this data field.388

• Tenor—Three commenters 

responded to the Commission’s request 

for specific comment regarding whether 

date information (i.e., tenor information) 

should be rounded to the nearest 

month.389 One of the commenters stated 

that in illiquid markets, the rounding of 

tenor would be necessary to protect 

anonymity of parties to a trade. The 

commenter further suggested that with 

respect to illiquid foreign exchange 

markets, the tenor could map to one or 

two years, rather than to a specific 

month and year. Another commenter 

argued that public dissemination should 

follow market conventions for reporting. 

Yet another commenter stated that by 

not reporting the actual tenor of the 

swap, one of the primary economic 

terms of the swap would be 

manipulated and would therefore 

reduce post-trade price transparency. 

• Timestamp—Commenters argued 

that requiring that the timestamp be 

reported to the second is not reasonable 

and not consistent with current market 

practice.390 One commenter argued that 

the value derived of moving the 

industry to UTC appears minimal when 

compared to the costs involved.391

• Notional Amount—One commenter 

stated that reporting the notional 

amount in total dollar value for 

commodities provides little value in 

terms of price discovery value in the 

market.392 Therefore, the commenter 

recommended that the reporting of 

notional quantity in the units of the 

underlying quantity would provide 

more relevant information. Similarly, 

another commenter suggested that since 

there is not a universal definition of 

notional amount, the Commission 

should provide guidelines on how to 

publicly disseminate notional amount 

similar to the guidelines provided by 

the Federal Reserve Bank of New York 

(‘‘FRBNY’’).393 Another commenter 


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394See CL–MFA. 

395See CL–Working Group of Commercial Energy 

Firms. 

396See Meeting with Markit (June 26, 2011). 

397See Meeting with Barclays (January 24, 2011); 

CL–Working Group of Commercial Energy Firms. 

398See CL–Working Group of Commercial Energy 

Firms. 

399See CL–GFXD. 

400See CL–ISDA/SIFMA. 

401See CL–Barclays; CL–DTCC; CL–TriOptima; 

and CL–Better Markets. 

402See CL–ISDA/SIFMA; CL–DTCC; CL– 

Committee on Capital Markets Regulation; and CL– 

MarkitSERV. 

403See CL–GFXD. 

404The Commission notes that CEA section 

2(a)(13)(F) explicitly permits that agents to the 

parties to a swap may report swap transaction and 

pricing information: ‘‘Parties to a swap (including 

agents of the parties to a swap) shall be responsible 

for reporting swap transaction information to the 

appropriate registered entity in a timely manner as 

may be prescribed by the Commission.’’ See supra 

§ 43.3 discussion, which discusses the use of third 

parties for reporting and public dissemination. 

405See supra discussion in section II.E (‘‘Section 

43.5—Time Delays for Public Dissemination of 

Swap Transaction and Pricing Data’’). 

406See supra discussion in section II.B.2 

(‘‘Defined Terms’’). 

407See supra discussion in section II.A, regarding 

the scope of part 43. 

argued that the notional amount field 

should not be publicly disseminated for 

non-standardized swaps.394

• Indication of Other Price Affecting 

Terms—One commenter argued that this 

field, which applies only to nonstandardized or bespoke ‘‘reportable 

swap transactions,’’ should be deleted 

and only price and volume should be 

required, if anything, for bespoke swaps. 

The commenter further argued that 

there would be little price discovery 

value in reporting this field.395 Another 

commenter suggested that the 

Commission require that certain 

condition flags be publicly disseminated 

with respect to bespoke transactions 

that would provide market participants 

and the public with more information 

about the bespoke swap.396

• Price-Forming Continuation Data— 

Commenters stated that novations and 

partial novations should not be 

‘‘reportable swap transactions’’ since 

they do not have a material impact on 

the primary economic terms of the 

transaction.397

• Contract Type—One commenter 

suggested that the ‘‘Contract Type’’ data 

field be modified to delete ‘‘options’’ (to 

the extent the Commission is referring 

to physical options) and ‘‘forwards’’ 

given that the Commission has no 

jurisdiction over physical 

transactions.398

One commenter emphasized the 

importance of maintaining flexibility in 

the data fields described in appendix A 

to proposed part 43, which may mean 

that no information at all may be 

reported for certain fields.399 In 

contrast, another commenter 

recommended that the data elements be 

made more specific to provide clarity 

and avoid the risk of inconsistencies 

when specifying the data elements.400

Four commenters recommended that a 

standardized data format be required for 

the reporting and public dissemination 

of swap transaction and pricing data. 

These four commenters argued that a 

single data format would maximize 

efficient and cost-effective access to the 

information by the greatest number of 

users.401

Several commenters also requested 

that the Commission and the SEC 

harmonize the data fields that are 

required to be publicly disseminated so 

that there can be an accurate depiction 

of prices within the same asset 

classes.402

The Commission received comments 

discussing the ‘‘Swap Instrument’’ data 

field. The Commission is not including 

this data field in appendix A to part 43, 

as it intends to address this concept in 

the block trade re-proposal. 

Additionally, one commenter 

interpreted that Table A2 would only 

relate to embedded options and as a 

result the primary economic terms for 

options were not covered by appendix 

A to part 43.403

After considering the comments, the 

Commission has determined to adopt 

appendix A to proposed part 43 as 

described below. 

The Commission agrees with concerns 

expressed by some commenters 

regarding the costs and burdens that 

end-users will face in reporting the data 

fields described in appendix A to 

proposed part 43. Accordingly, the 

Commission is adopting data fields in 

appendix A to part 43 that provide 

sufficient flexibility for reporting both 

standardized and bespoke swap 

transactions in all asset classes. While 

the Commission recognizes that there 

will be costs associated with reporting 

the data fields described in appendix A 

to part 43, the Commission does not 

believe that a distinction should be 

made for swaps in which an end-user is 

a reporting party. The Commission 

believes that swaps with similar 

characteristics must have the same 

standards for public dissemination, 

regardless of the type of reporting party, 

so that identical data fields will be 

publicly disseminated for similar swaps. 

Such consistency in public 

dissemination will provide market 

participants and the public with 

uniform public reporting and enhanced 

transparency and price discovery. To 

the extent that non-SD/non-MSPs are 

reporting parties, these parties may use 

industry solutions, such as third-party 

reporting agents or web-based data 

reporting, to assist in reporting such 

swap transaction and pricing data to an 

SDR.404 The Commission believes that 

industry solutions, combined with the 

longer initial time delays for public 

dissemination,405 the flexibility of the 

data fields and the flexibility of the 

meaning of ‘‘as soon as technologically 

practicable’’ 406 will mitigate the costs 

that may be incurred by non-SD/nonMSP reporting parties. 

The Commission disagrees with 

commenters that stated that off-facility 

end-user swaps should not be publicly 

disseminated or alternatively should be 

permitted to report less information 

than the data fields required in 

appendix A to part 43. As noted in the 

previous discussion related to the scope 

of part 43,407 the Commission interprets 

CEA section 2(a)(13)(C) to cover all 

swap transactions, including bespoke 

swaps. The Commission nonetheless 

recognizes that there are differences 

among various types of swap 

transactions based on asset class and 

whether a swap is subject to mandatory 

clearing, standardized or bespoke. As 

further discussed below, the 

Commission believes that the reporting 

of swap transaction and pricing data for 

bespoke transactions, including offfacility end-user transactions, enhances 

price discovery by bringing 

transparency to the market. Requiring 

that certain data fields be reported— 

such as ‘‘Indication of Other Price 

Affecting Term’’ and ‘‘Additional Price 

Notation’’—adds value to the swap 

transaction and pricing data that is 

publicly disseminated without 

compromising the anonymity of the 

swap counterparties. It is possible that 

some of the data fields listed in Tables 

A1 and A2 in appendix A to part 43 

may not be relevant to the terms of a 

particular publicly reportable swap 

transaction and therefore need not be 

publicly disseminated. However, to the 

extent that a data field for a particular 

swap is a relevant term of the publicly 

reportable swap transaction, the 

reporting party, SEF or DCM must 

provide the SDR with sufficient 

information to publicly disseminate 

such swap transaction and pricing data. 

The Commission notes that the data 

fields described in appendix A to part 

43 only reflect data that is to be publicly 

disseminated by an SDR. The 

Commission has added introductory 

language to appendix A to part 43 to 

clarify that reporting parties, SEFs and 


tkelley on DSK3SPTVN1PROD with RULES2
1224 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 

408See Commission, Reopening and Extension of 

Comment Periods for Rulemakings Implementing 

the Dodd-Frank Wall Street Reform and Consumer 

Protection Act, 76 FR 25274 (May 4, 2011). 

409See supra discussion in section II.D.5 

(‘‘Anonymity of Parties to a Publicly Reportable 

Swap Transaction (§ 43.4(d)’’). 

DCMs must report to an SDR ‘‘as soon 

as technologically practicable’’ after 

execution of the publicly reportable 

swap transaction, the swap transaction 

and pricing data that is needed to 

publicly disseminate the relevant data 

fields described in Tables A1 and A2. 

The Commission acknowledges the 

comment that it is premature to 

comment on the data fields described in 

appendix A to proposed part 43 since 

certain definitions have not been 

finalized; however, the Commission 

disagrees that the absence of such 

definitions would preclude an 

interested party from commenting on 

the data fields in appendix A to 

proposed part 43. Further, in response 

to similar comments, the Commission 

previously re-opened the comment 

period for the Proposing Release so that 

market participants and interested 

parties would have an opportunity to 

comment after seeing the entire mosaic 

of proposed rules.408 The Commission 

did not receive any additional 

comments on the proposed data fields 

during the re-opened comment period. 

The Commission sees merit in the 

suggestion that SDRs have discretion to 

determine how to publicly disseminate 

data fields. As discussed, § 43.3(a) 

requires that all swap transaction and 

pricing data be reported by reporting 

parties, SEFs and DCMs to an SDR for 

public dissemination. Accordingly, the 

Commission anticipates that the SDRs 

will have discretion to publicly 

disseminate the swap transaction and 

pricing data in a form and manner that 

covers all of the information described 

in appendix A to part 43. The 

introductory language to appendix A to 

part 43 now makes clear that the form 

and manner in which an SDR publicly 

disseminates information should be 

consistent for swaps within a particular 

asset class. Such consistency will better 

enable market participants to compare 

prices for swaps within the same asset 

class. The data fields listed in appendix 

A to part 43 are intended to be 

informative and flexible to 

accommodate all types of publicly 

reportable swap transactions. 

Additionally, appendix A to part 43 

provides examples of how each data 

element may be publicly disseminated. 

These examples are not meant to be 

prescriptive and may not be applicable 

to certain types of swaps. The 

Commission believes that part 43 and 

appendix A to part 43 provide sufficient 

guidance to SDRs regarding information 

that should and should not be publicly 

disseminated. With respect to the public 

dissemination of swap transaction and 

pricing data related to certain off-facility 

swaps in the ‘‘other commodity’’ asset 

class, the Commission intends to 

provide further guidance in its block 

trade re-proposal.409

The Commission agrees with 

commenters that separate data fields 

that represent creditworthiness should 

not be publicly disseminated. The 

Commission does not agree, however, 

that reporting the value of 

creditworthiness as part of the 

‘‘Additional Price Notation’’ data field, 

as stated in the Proposing Release, will 

disclose the business transactions or 

market positions of any person. 

Creditworthiness is one of several 

factors that would comprise the amount 

set forth in the ‘‘Additional Price 

Notation’’ field. In the description of the 

‘‘Additional Price Notation’’ data field 

in the Proposing Release, the 

Commission stated that the field should 

include any premiums associated with, 

among other things, margin, collateral 

and independent amounts. To clarify, 

the actual amounts of variation margin 

and initial margin would not be 

included in this field; rather, any 

premiums associated with the presence 

of collateral that are factored into the 

price of the publicly reportable swap 

transaction would be included. The 

Commission believes that an indication 

whether an uncleared swap is 

collateralized should be publicly 

disseminated to provide greater 

meaning to the price of the swap in lieu 

of a separate field for creditworthiness. 

The Commission is therefore requiring 

that the margin, collateral and 

independent amount terms be reported 

as a separate field entitled ‘‘Indication 

of Collateralization.’’ The ‘‘Indication of 

Collateralization’’ field is only required 

for uncleared swaps, as, unlike cleared 

swaps, uncleared swaps have collateral 

arrangements. The inclusion of the 

‘‘Indication of Collateralization’’ data 

field in the final rule requires that 

reporting parties for uncleared swaps 

must provide the SDR with the 

appropriate information so that the SDR 

can publicly disseminate one of four 

descriptions of the terms of the swap 

relating to the collateral arrangement for 

such swap. The four descriptions to be 

publicly disseminated are as follows: 

(1) ‘‘Uncollateralized’’—An uncleared 

swap shall be described as 

‘‘Uncollateralized’’ when there is no 

credit arrangement between the parties 

to the swap or when the agreement 

between the parties states that no 

collateral (neither initial margin nor 

variation margin) is to be posted at any 

time. 

(2) ‘‘Partially Collateralized’’—An 

uncleared swap shall be described as 

‘‘Partially Collateralized’’ when the 

agreement between the parties states 

that both parties will regularly post 

variation margin. The word ‘‘regularly’’ 

is used to exclude situations where the 

parties may set a threshold amount(s) 

that is so high that one or both parties 

will rarely post variation margin, if at 

all. 

(3) ‘‘One-way Collateralized’’—An 

uncleared swap shall be described as 

‘‘One-way Collateralized’’ when the 

agreement between the parties states 

that only one party to such swap agrees 

to post initial margin, regularly post 

variation margin or both with respect to 

the swap. The word ‘‘regularly’’ is used 

to exclude situations where the parties 

may set a threshold amount(s) that is so 

high that one or both parties will rarely 

post variation margin, if at all. 

(4) ‘‘Fully Collateralized’’—An 

uncleared swap shall be described as 

‘‘Fully Collateralized’’ when the 

agreement between the parties states 

that initial margin must be posted and 

variation margin must regularly be 

posted by both parties. The word 

‘‘regularly’’ is used to exclude situations 

where the parties may set a threshold 

amount(s) that is so high that one or 

both parties will rarely post variation 

margin, if at all. 

The Commission does not agree that 

the public dissemination of bespoke 

swaps will confuse the market or fail to 

enhance price discovery. The public 

dissemination of bespoke swaps 

provides the public with the full scope 

of publicly reportable swap transactions 

that are being transacted in an asset 

class, which will inform market 

participants and the public of market 

depth and the execution of swaps with 

similar underlying assets. In the 

Commission’s opinion, the designation 

of such swaps as ‘‘bespoke’’ in the 

‘‘Indication of Other Price Affecting 

Term’’ data field (and the ‘‘Additional 

Price Notation’’ and ‘‘Indication of 

Collateralization’’ data fields) will 

provide information that enhances price 

discovery. While the Commission agrees 

with the comment that condition flags 

may provide greater clarity to the 

market as to the pricing of a bespoke 

swap, such indications may also 

disclose the identities, business 

transactions and/or market positions of 

the parties. Further, the Commission 

believes that the ‘‘Additional Price 

Notation,’’ ‘‘Indication of 


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410The use of UTC with regard to part 43 only 

refers to the execution timestamps that are publicly 

disseminated; reporting parties, SEFs and DCMs 

can agree to report different timestamps to the SDR 

that can then convert the time to UTC for public 

dissemination. 

411See § 43.4(g) and (h). 

Collateralization’’ and the ‘‘Indication of 

Other Price Affecting Term’’ data fields 

will provide sufficient information to 

the market to enhance price discovery 

with respect to these types of publicly 

reportable swap transactions. 

The Commission is modifying or 

adding certain data fields in response to 

comments received. 

• Additional Price Notation—The 

Commission believes that the 

Additional Price Notation field will not 

disclose the creditworthiness of the 

counterparty as one commenter 

suggested. This data field provides a 

single number that accounts for the 

combined premiums associated with the 

publicly reportable swap transaction. 

The actual content of what constitutes 

this number will not be publicly 

disseminated. As discussed earlier, the 

references to margin, collateral and 

independent amount are being replaced 

in the description of this field with the 

term ‘‘presence of collateral.’’ 

Additionally, the description of this 

data field in the final rule makes clear 

that ‘‘counterparty credit risk’’ would be 

included as part of the number. With 

respect to the comment that the 

Additional Price Notation field will 

have little application to commodity 

transactions, the final rule provides that 

to the extent that this data field does not 

apply, the data field would not need to 

be publicly disseminated. 

The Commission does not anticipate 

that computing this field should be 

difficult, even for transactions in the 

‘‘other commodity’’ asset class. The 

price of the swap should be known and 

the premium or spread is generally 

negotiated outside of the actual price of 

the swap. The Commission believes that 

the comment that a standardized 

approach for calculating the amount in 

the Additional Price Notation field 

would be challenging to achieve has 

merit. The Commission acknowledges 

that this field may be calculated slightly 

differently in different asset classes, by 

different swap counterparties, and even 

within the same asset class. 

Notwithstanding these potential 

discrepancies in the calculation of the 

‘‘Additional Price Notation’’ data field, 

the Commission believes that breaking 

out the premiums for a swap would 

enhance price discovery and allow for 

better comparison for all swaps within 

an asset class—both platform executed 

swaps and off-facility swaps. 

• Tenor—In response to comments 

regarding whether tenor should be 

reported as month and year, the 

Commission agrees with the commenter 

who stated that to not report the exact 

tenor of a swap would essentially mean 

not reporting a primary economic term 

of the swap. To not require the exact 

end date of swap would detract from the 

meaning of the price and therefore the 

Commission is requiring that the actual 

end date be required to be publicly 

disseminated for all swaps. The field 

that was called ‘‘Tenor’’ in the 

Proposing Release will be called ‘‘End 

Date’’ and the time between the 

‘‘Effective or Start Date’’ and the ‘‘End 

Date’’ will provide market participants 

and the public with the exact tenor of 

the swap. Similarly, the ‘‘Option 

Expiration Date’’ field should be 

reported as an actual date and not the 

month and year, as described in the 

Proposing Release. 

• Execution Timestamp—While the 

Commission understands that the 

reporting of the timestamp to the second 

is a shift from the standard practice in 

the previous OTC derivatives market, 

the Commission does not believe that 

this historical practice is persuasive on 

the point of whether swaps under the 

new regulatory regime established by 

the Dodd-Frank Act should receive 

execution timestamps to the second. A 

timestamp to the second is necessary for 

both audit trail and enforcement 

purposes, as well as to allow market 

participants and the public an 

opportunity to re-create a trading day. 

Different market participants and 

different types of execution may receive 

different time delays, so the timestamp 

will become critical in determining the 

order of execution of transactions 

within a particular market. The 

Commission will also use the 

timestamps to determine whether swaps 

are being reported by reporting parties, 

SEFs and DCMs ‘‘as soon as 

technologically practicable’’ and to 

compare the speed at which similar 

market participants report swap 

transaction and pricing data to an SDR 

for public dissemination. Additionally, 

the Commission can use the timestamp 

to determine how quickly SDRs are 

publicly disseminating the information 

that they receive for public 

dissemination. Further, SDRs will use 

the Execution Timestamp to measure 

the time delays for public dissemination 

to be applied to publicly reportable 

swap transactions, as described in § 43.5 

and appendix C to part 43. 

A commenter suggested that the 

benefit of moving the industry to UTC 

appears minimal when compared to the 

costs involved. The Commission 

believes that consistency across the 

global swaps market is important and 

requiring public dissemination in UTC 

will allow market participants and 

reporting parties to re-create the order of 

trades and will reduce the need for 

market participants to convert different 

times to understand the order of trades 

in a particular market.410 Further, the 

appendix A to part 43 combines the 

‘‘Execution Date’’ field to be included in 

the ‘‘Execution Timestamp’’ field so that 

both a time and date will be publicly 

disseminated to assist market 

participants and the public with 

understanding the trading of publicly 

reportable swap transactions. 

• Notional or Principal Amount—The 

Commission agrees with the comment 

that the notional quantity should be 

reported and publicly disseminated in 

the units of the underlying quantity, as 

it would provide more relevant 

information to enhance price discovery. 

The Commission, however, does not 

believe that the Commission needs to 

provide guidelines on how to publicly 

disseminate the notional or principal 

amount. The Commission believes that 

the SDR should have the discretion on 

how to publicly disseminate the 

notional amounts for certain types of 

commodity transactions that are traded 

in units. The Commission does not 

agree with the comment that the 

notional amount should not be 

disseminated for non-standardized 

swaps, as such public dissemination 

will enhance price discovery and 

provide information on market depth. 

The final rules provide for the rounding 

of the notional or principal amount as 

well as caps on the public 

dissemination of notional or principal 

amounts.411 Accordingly, the data fields 

in appendix A to part 43 indicate that 

it is the ‘‘Rounded Notional or Principal 

Amount’’ that is to be publicly 

disseminated. 

• Indication of Other Price Affecting 

Term—One commenter argued that the 

‘‘Indication of Other Price Affecting 

Term’’ data field should not be reported 

and only price and volume information 

should be reported for bespoke 

‘‘reportable swap transactions.’’ The 

Commission intends that this data field 

will merely serve as an indication that 

a swap is not standardized (i.e., 

bespoke). The Commission believes that 

such indication will provide market 

participants and the public with an 

opportunity to more easily discern the 

differences in prices of bespoke swaps 

with those swaps that are standardized 

(e.g., executed on a SEF or DCM and 

subject to the clearing mandate). An 

indication of other price affecting terms 

will allow market participants and the 


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1226 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 

412See entry for ‘‘price forming continuation 

data’’ in Table A1 (‘‘Data Fields and Suggested 

Form and Order for Real-Time Public Reporting of 

Swap Transaction and Pricing Data’’) in appendix 

A to this part. See Real-Time NPRM supra note 6, 

at 76179. Such price-forming continuation data may 

include: terminations, assignments, novations, 

exchanges, transfers, amendments and conveyances 

of extinguishing of rights that change the price of 

the swap. 

413The Commission notes that the title of Table 

A2 in the Proposing Release was ‘‘Additional realtime public reporting data fields for options, 

swaptions and swaps with embedded options.’’ 

Real-Time NPRM supra note 6, at 76181. 414See 75 FR 76574. 415 Id. 

public to look to other fields such as 

‘‘Indication of Collateralization,’’ 

‘‘Additional Price Notation’’ and ‘‘Day 

Count Convention’’ to better understand 

the price of the swap. The Commission 

has deleted the reference to common 

material price affecting terms to avoid 

confusion and has added a description 

under the example to indicate that the 

field should be utilized if there is a 

material price affecting term that is not 

otherwise publicly disseminated. 

• Price-Forming Continuation Data— 

The Commission agrees that novations 

and partial novations should not be 

publicly reportable swap transactions, 

but only to the extent that such swaps 

do not have a material effect on the 

price of the swap. To the extent there is 

any price effect from the novation (e.g., 

payments associated with the novation, 

changes to material terms of the swap, 

etc.), such novations would be publicly 

reportable swap transactions and an 

indication of the type of price forming 

continuation data would need to be 

publicly disseminated pursuant to part 

43. The final rule clarifies the types of 

transactions that may be included in the 

price forming continuation data field to 

match with the types of transactions in 

the definition of publicly reportable 

swap transaction.412

• Contract Type—In response to the 

comment that options and forwards 

should be deleted to the extent they 

relate to physical transactions, the 

Commission does not believe that any 

action is necessary regarding the data 

field. The extent to which certain 

products fall under the Commission’s 

jurisdiction will be defined in another 

Commission rulemaking. To that end, 

the list is meant to be illustrative and to 

ensure that all publicly reportable swap 

transactions would be included to the 

extent that they are under the 

Commission’s jurisdiction. 

In response to the comment that Table 

A2 only applies to embedded options, 

the Commission notes that Table A2 

applies to options, swaptions and 

embedded options; the Commission has 

added clarifying language to the 

description.413

It is the Commission’s intent to ensure 

harmonization between the data fields 

in appendix A to proposed part 43 and 

the data fields required to be reported to 

an SDR for regulatory purposes. In light 

of the changes to proposed § 43.3 that 

require reporting to an SDR, which in 

turn must publicly disseminate the data 

fields described in appendix A to part 

43, the Commission believes that 

reporting parties, SEFs and DCMs may 

report the data elements for real-time 

reporting and regulatory reporting in the 

same data stream. Accordingly, it is 

important that the data fields for both 

the real-time and regulatory reporting 

requirements work together. Further, 

certain changes to the final rules make 

the public dissemination of additional 

data fields important to provide market 

participants and the public with an 

understanding of the swap. For these 

reasons, the Commission is adding to 

appendix A the following data fields 

that were not included in the Proposing 

Release: 

• Indication of End-User Exception— 

Given the other changes in the final 

rules regarding the time delays for 

public dissemination, such indication is 

necessary to provide market participants 

and the public with information as to 

why such swap received a time delay 

for public dissemination as compared to 

other swaps with substantially similar 

terms. Additionally, such information 

would be required to be reported 

pursuant to the regulatory reporting 

requirements described in proposed part 

45, thus reducing the cost for reporting 

parties to provide such information.414

• Day Count Convention—The day 

count convention is a description of 

how interest accrues over time and is a 

material term that is necessary for 

pricing certain swaps. Common day 

count convention methods include the 

30/360 method and the Actual method. 

The day count convention is necessary 

to be publicly disseminated so that the 

public can better understand the price 

and the terms for how to value the 

swap. 

• Settlement Currency—The 

settlement currency is a necessary data 

field for foreign exchange transactions 

that physically settle. To the extent that 

such transactions are subject to the realtime reporting requirements of part 43, 

this field should be publicly 

disseminated to give meaning to the 

price of a publicly reportable swap 

transaction. The field would be required 

to be reported pursuant to the regulatory 

reporting requirements in proposed part 

45, thus reducing the cost for reporting 

parties to provide such information.415

All other data fields in appendix A to 

part 43 that are not discussed above are 

adopted as proposed with certain 

clarifying or conforming changes and 

certain changes to ensure that the 

language in the description is not 

unduly prescriptive. Some of the 

conforming or clarifying changes 

include matching changes to definitions 

and section numbers, describing the 

examples with a parenthetical and 

clarifying certain names of fields (e.g., 

‘‘Notional or principal amount 1’’ has 

been changed to ‘‘Rounded notional or 

principal amount 1’’ since only the 

rounded notional amount will be 

publicly disseminated, and changed the 

name of ‘‘Start Date’’ to ‘‘Effective or 

Start Date’’ for clarity). Additionally, the 

Commission has removed certain 

language from the descriptions of the 

data fields that might have been 

construed as prescriptive. For example, 

the final rule removed ‘‘[s]uch letter 

convention may be reported as follows: 

D (daily), W (weekly), M (monthly), Y 

(yearly)’’ from the payment frequency 

data fields to make clear that payment 

frequency may be publicly disseminated 

in a different manner as long as an SDR 

is consistent in the way that data fields 

are publicly disseminated. With respect 

to the ‘‘Execution Venue’’ data field, the 

Commission has made clear that the 

actual SEF or DCM name need not be 

reported. Further, the Commission has 

modified the ‘‘Price Notation’’ field to 

clarify that this field indicates the price 

(and not the premium), and the 

language relating to netting to a present 

value of zero at execution was removed 

since it might not be true in all cases. 

The Commission has also added 

clarification to the examples described 

for each data element. These examples 

are meant to provide guidance with 

respect to the public dissemination of 

swap transaction and pricing data. 

In response to commenters who 

recommended that the Commission 

harmonize the data fields with the SEC, 

the Commission notes that it has 

consulted with the SEC regarding the 

data fields for public dissemination. The 

Commission believes that the data fields 

described in appendix A to part 43 are 

sufficiently flexible to cover swaps in all 

asset classes. The Commission has 

determined that the data elements 

described in Tables A1 and A2 of 

appendix A to part 43 are necessary to 

enhance price discovery. 


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Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 1227 

416The Commission received comments 

specifically addressing the implementation of part 

43 and additionally received general 

implementation comments in response to the Public 

Roundtable Discussion on Dodd-Frank 

Implementation. 

417See CL–ISDA/SIFMA. 

418See CL–ISDA/SIFMA; CL–DTCC; CL–GFXD; 

CL–WMBAA; and CL–Cleary. 

419See CL–Barclays; CL–Committee on Capital 

Markets Regulation; CL–DTCC; CL–Cleary; and CL– 

Working Group of Commercial Energy Firms. 

420See CL–UBS; CL–Barclays; and CL–DTCC. 421See CL–Barclays; CL–AIMA; and CL– 

MarkitSERV. 422See CL–JPM; CL–MS. 423Commenters include: Barclays; GS; UBS; 

Cleary; Freddie Mac; FHL Banks; MFA; GFXD; 

ISDA/SIFMA; Better Markets; ABC/CIEBA; SIFMA 

AMG; WMBAA; Coalition for Derivatives EndUsers; FIA/SIFMA/ISDA/FSR; AII; Vanguard; 

MarkitSERV; JPM; ATA; MFA; WMBAA; Vanguard; 

MS; and SIFMA AMG. 

424See CL–Cleary. 425See CL–ABA. As discussed throughout this 

Adopting Release, the Commission has determined 

not to adopt certain rules relating to block trades 

and other off-facility swaps in the ‘‘other 

commodity’’ asset class in this Adopting Release. 

426See CL–MFA; CL–UBS; CL–Reval; and 

Meeting with Markit (Jan. 13, 2011). 

427See CL–Cleary. 

428See CL–Commodity Markets Council; and CL– 

MarkitSERV. 

429See CL–DTCC; CL–ABC–CIEBA; and CL– 

Working Group of Commercial Energy Firms. 

430See CL–ABC/CIEBA. 

431See CL–MarkitSERV. 

432See CL–Working Group of Commercial Energy 

Firms. 

433See CL–Dominion. 

434See CL–Dominion; CL–DTCC; and CL– 

Working Group of Commercial Energy Firms. 

III. Effectiveness/Implementation and 

Interim Period 

In its Proposing Release the 

Commission solicited responses to 

specific questions regarding the 

implementation of real-time public 

reporting, including whether (i) 

different reporting parties should have 

different implementation timeframes; 

(ii) different types of execution should 

have different reporting phase in 

timeframes; (iii) different asset classes, 

markets, or contracts should have 

different timeframes; and (iv) public 

dissemination of block trades should be 

implemented according to a different 

schedule than non-block trades. 

The Commission received responsive 

comments from 47 market participants, 

including SDs, non-financial end-users, 

financial end-users, industry groups/ 

associations, asset managers, trading 

platforms and data vendors.416

Commenters discussed the following 

issues relating to implementation: (1) 

Timing for real-time reporting vis-a-vis 

other rules; (2) a phase in approach 

based on liquidity/standardization/asset 

class; (3) harmonization with the SEC 

and foreign regulators; (4) 

implementation schedules; (5) a testing 

phase; (6) technology challenges; (7) 

comparison to TRACE phase in; (8) large 

notional swaps/customized swaps; (9) 

end-users should be phased in last; and 

(10) re-proposal and re-open comment 

period. 

Twenty-seven comments supported a 

phase in approach with regard to realtime reporting requirements for the 

rules set forth in the Proposing Release. 

Commenters’ proposed approaches to 

phasing in the rules varied in timing 

and scope. One commenter further 

suggested that a phase in be adopted 

similar to that proposed in the SD/MSP 

Recordkeeping NPRM.417 Five 

commenters recommended that in 

implementing the part 43 rules the 

Commission follow the manner in 

which FINRA phased in TRACE; 418

some supported a testing phase in 

period during which compliance would 

not be required.419 These commenters 

further suggested that such a phase in 

period would provide an opportunity to 

both address anticipated technology 

challenges and allow parties to become 

familiar with the reporting process. 

Other comments advised the 

Commission to subject more liquid/ 

standardized contracts to public realtime reporting first and phase in less 

liquid contracts later.420 Still others 

recommended beginning with reporting 

of more advanced asset classes with 

established infrastructure for reporting 

(e.g., credit) or by entity/market 

participants.421 In addition, commenters 

stated that real-time reporting for large 

notional swaps should be phased in.422

Twenty-six commenters contended 

that the Commission must first collect 

and analyze data per the Commission’s 

data recordkeeping and reporting and 

SDR registration rules, before adopting 

final rules addressing certain aspects of 

the block trade rules (e.g., calculations 

and time delay).423 Consistent with this 

approach, four commenters asserted that 

the entire rulemaking should be reproposed after the Commission has had 

the opportunity to review and analyze 

the data collected by SDRs. One 

commenter requested that the 

Commission wait until it publishes the 

standardized computer-readable 

algorithmic study before developing 

real-time reporting rules.424 One 

commenter urged the Commission to repropose this rule, and all other rules 

establishing the new framework for 

swaps regulation, in the order in which 

they will be implemented—preferably 

starting with data gathering in order to 

capture most effectively the appropriate 

products and market participants. This 

commenter recommended a minimum 

sixty-day comment period for each of 

the re-proposed rules. While this 

process would delay implementation by 

some months, the commenter believed 

that the desire for an accelerated and/or 

premature regulatory certainty should 

not outweigh the need for 

comprehensive consideration of the 

market impact and potential market 

disruptions prior to finalizing the 

regulatory requirements.425

Several commenters stated that the 

Commission should adopt an 

implementation timeline similar to 

those of other federal regulators, 

including the SEC.426 One commenter 

observed that inconsistencies between 

the Commissions’ proposals would, if 

adopted, significantly complicate 

implementation.427 Two additional 

commenters recommended that the 

Commissions harmonize their phase in 

approaches.428

The Commission received comments 

from several commenters that 

recommended specific implementation 

schedules for the Commission’s 

consideration.429

One of these comments supported reproposing the rule after data are 

collected.430 As discussed throughout 

this Adopting Release, the Commission 

has determined not to adopt certain 

aspects of the block trade rules pending 

further collection and analysis of data. 

One commenter stated that the 

Commission’s implementation period 

and process should be broadly 

consistent with the proposed European 

implementation; in its view such 

consistency would foster consistency 

across regions and minimize regulatory 

arbitrage.431

The Commission also received several 

comments asserting that end-user swap 

data reporting should be delayed. For 

example, one of these commenters 

commented that non-bank SDs and endusers should be able to establish 

information technology systems related 

to business process for approximately 

one year before reporting is required.432

Another commenter stated that endusers should not begin reporting until 

an SDR has been registered and the 

systems between the SDR and end-user 

can be set up and tested.433 Other 

comments contended that end-users 

should be phased in last.434

A number of other commenters 

responded, directly or indirectly, to the 

Commission’s decision to reopen the 

comment periods for all Dodd-Frank Act 

rulemakings and specific request for 

comment on the order in which the 

Commission should consider final 

rulemakings under the Dodd-Frank 


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1228 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 

435See CL–ABA; CL–ABC/CIEBA; CL–COPE; CL– 

Citadel; CL–DC Energy; CL–BP; CL–Alice; CL– 

FHLBanks; CL–Cleary; CL–GFXD; CL–NFPEEU; 

CL–Working Group of Commercial Energy Firms; 

CL–FIA/FSR/IIB/IRI/ISDA/SIFMA/Chamber; and 

Meeting with Citi, MS and JPM (May 17, 2011). 

Act.435 Six commenters challenged the 

sequencing and timing of the Proposing 

Release in relation to the publication of 

the final entity and/or product 

definitions rulemakings published after 

the Proposing Release. These 

commenters contended that the 

Commission’s failure to sequence the 

proposals deprived them of the 

opportunity for meaningful, informed 

comment on the Proposing Release; they 

suggested that the Commission extend 

the comment periods on all 

rulemakings. 

Consistent with section 754 of the 

Dodd-Frank Act, part 43 of the 

Commission’s Regulation will be 

effective on March 9, 2012 (‘‘Effective 

Date’’). In that regard, however, the 

Commission wishes to emphasize that 

implementation or compliance dates for 

various regulatory requirements in part 

43 are contingent upon the adoption 

and effective dates of other, related, 

regulatory provisions and definitions. In 

consideration of these contingencies 

and in response to commenters, the 

Commission is adopting a three-phase 

schedule for compliance with part 43, 

along with several new procedures. 

Compliance Date 1 

On the first compliance date 

(‘‘Compliance Date 1’’), all SEFs, DCMs, 

SDs and MSPs will be required to 

comply with all part 43 requirements 

with respect to publicly reportable swap 

transactions in the interest rate and 

credit asset classes, including reporting 

such transactions to an SDR pursuant to 

the rules of part 43. On Compliance 

Date 1, all publicly reportable swap 

transactions in the interest rate and 

credit asset classes that are either (1) 

executed on or pursuant to the rules of 

a SEF or DCM, or (2) ‘‘off-facility 

swaps’’ in which at least one party to 

the swap is an SD or MSP (collectively, 

‘‘Compliance Date 1 transactions’’), 

must be reported to an SDR for public 

dissemination, pursuant to part 43. In 

addition, on Compliance Date 1, all 

SDRs for the interest rate and credit 

asset classes will be required to accept 

and publicly disseminate real-time swap 

transaction and pricing data for the 

Compliance Date 1 transactions 

pursuant to part 43 and appendix A to 

part 43. With respect to swaps in the 

interest rate and credit asset classes that 

are executed on or pursuant to the rules 

of a SEF or DCM, Compliance Date 1 

will be the date that is the later of (1) 

July 16, 2012, or (2) 60 calendar days 

after the publication in the Federal 

Register of Commission regulations 

defining the term ‘‘swap’’ pursuant to 

sections 721 and 712(d)(1) of the DoddFrank Act. With respect to swaps in the 

interest rate and credit asset classes that 

are not executed on or pursuant to the 

rules of a SEF or DCM and that have at 

least one party that is an SD or MSP, 

Compliance Date 1 will be the date that 

is the later of (1) July 16, 2012 of this 

Adopting Release in the Federal 

Register, or (2) 60 calendar days after 

the publication in the Federal Register 

of the last Commission regulations 

defining the terms ‘‘swap,’’ ‘‘swap 

dealer’’ and ‘‘major swap participant’’ 

pursuant to sections 721 and 712(d)(1) 

of the Dodd-Frank Act. 

Compliance Date 2 

On the second compliance date 

(‘‘Compliance Date 2’’), all SEFs, DCMs, 

SDs and MSPs will be required to 

comply with all part 43 requirements 

with respect to publicly reportable swap 

transactions in the foreign exchange, 

equity and ‘‘other commodity’’ asset 

classes, including reporting such 

transactions to an SDR pursuant to the 

rules of part 43. On Compliance Date 2, 

all publicly reportable swap 

transactions in the foreign exchange, 

equity and ‘‘other commodity’’ asset 

classes that are either (1) executed on or 

pursuant to the rules of a SEF or DCM, 

or (2) off-facility swaps in which at least 

one party to the swap is an SD or MSP 

(collectively, ‘‘Compliance Date 2 

transactions’’), must be reported to an 

SDR for public dissemination, pursuant 

to part 43. Consequently, on 

Compliance Date 2, all SDRs for the 

interest rate, credit, equity, foreign 

exchange and ‘‘other commodity’’ asset 

classes will be required to accept and 

publicly disseminate the Compliance 

Date 2 transactions pursuant to part 43. 

Compliance Date 2 shall begin 90 

calendar days after the commencement 

of Compliance Date 1. 

Compliance Date 3 

On the third compliance date 

(‘‘Compliance Date 3’’) all publicly 

reportable swap transactions in all asset 

classes will be required to comply with 

all part 43 requirements. Compliance 

Date 3 will require, among other part 43 

requirements, the reporting and public 

dissemination of all publicly reportable 

swap transactions in all asset classes by 

all SEFs, DCMs and reporting parties, 

including reporting parties that are nonSDs or non-MSPs. Compliance Date 3 

shall begin 90 calendar days after the 

commencement of Compliance Date 2. 

If no SDR for a particular asset class 

is registered or provisionally registered 

at the commencement of one or more 

compliance dates, compliance for swaps 

in such asset class shall not be required 

until registration or provisional 

registration of an SDR occurs in the 

asset class. Reporting parties, SEFs and 

DCMs may share and publicly 

disseminate swap transaction and 

pricing data without restriction until an 

SDR is registered or provisionally 

registered in an asset class. Further, the 

Commission notes that the compliance 

dates relating to the implementation of 

part 43 are not contingent on the 

publication of Commission regulations 

implementing Section 733 of the Dodd 

Frank Act relating to registration and 

compliance with core principles for 

SEFs. 

In addition to the compliance dates, 

the Commission is adopting a number of 

phasing procedures in response to 

commenters’ concerns. As discussed 

above, the Commission expects to repropose for comment a rulemaking to 

address the appropriate minimum block 

size criteria and determination. 

Consequently, until such time as an 

appropriate minimum block size is 

established for particular swaps, the 

Commission is providing initial time 

delays for all swaps subject to the 

reporting requirement in § 43.5. Further, 

the Commission will be phasing in the 

time delays over time so that market 

participants can adjust hedging 

strategies and secure the technology or 

make arrangements necessary to comply 

with part 43. The Commission has 

provided longer time delays for the 

‘‘other commodity’’ asset class, since 

such parties using such swaps tend to 

follow more complex hedging strategies 

to lay off risk. In response to comments 

regarding end-users, the Commission is 

providing longer time delays for public 

dissemination of swaps in which a nonSD/non-MSP is the reporting party since 

such parties may not have the 

technology available to report swap 

transaction and pricing data. 

Additionally, the Commission expects 

to address in the block trade re-proposal 

the reporting of publicly reportable 

swap transactions in the ‘‘other 

commodity’’ asset class that are not 

executed on or pursuant to a SEF or 

DCM and that do not reference one of 

the contracts listed in appendix B to 

part 43 or a swap that is economically 

related to such contracts. Until rules 

regarding such ‘‘other commodity’’ 

swaps are adopted, such swaps will not 

be subject to the real-time reporting 

requirements of part 43. 


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436 44 U.S.C. 3501 et seq. 

437See CL–Dominion. 

438 Id.; The Commission notes that its estimates 

regarding the costs related to ‘‘collections of 

information’’ required by the Proposing Release can 

be found in the supporting statement and form 83– 

I posted on the Office of Management and Budget’s 

Web site, which can be found at http:// 

www.reginfo.gov/public/do/PRAMain. The revised 

supporting statement and form 83–I can be found 

at the same Web site. 

439See CL–GXFD. 

440CL–OMB Notice of Action (received 04/01/11). 

441Rules related to block trades and large 

notional off-facility swaps will be addressed in a 

separate rulemaking. 

442At the time of the Proposing Release there 

were 17 DCMs; there are now 18 DCMs. 

443 75 FR 76169. 

444CFTC, President’s Budget and Performance 

Plan Fiscal Year 2012 (Feb. 2011), p. 13–14, 

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

public/@newsroom/documents/file/ 

cftcbudget2012.pdf. The estimated 140 SDs 

includes ‘‘[a]pproximately 80 global and regional 

banks currently known to offer swaps in the United 

States;’’ ‘‘[a]pproximately 40 non-bank swap dealers 

currently offering commodity and other swaps;’’ 

and ‘‘[a]pproximately 20 new potential market 

makers that wish to become swap dealers.’’ Id. 

445Letter from Thomas W. Sexton, Senior Vice 

President and General Counsel, NFA to Gary 

Barnett, Director, Division of Swap Dealer and 

Intermediary Oversight, CFTC (Oct. 20, 2011) (NFA 

Cost Estimates Letter). 

446Part 43 no longer uses the term end-user, but 

uses the term ‘‘non-SD/non-MSP’’ to represent a 

reporting party who is not an SD or MSP. 

IV. Paperwork Reduction Act 

The Paperwork Reduction Act 

(‘‘PRA’’) imposes certain requirements 

on federal agencies in connection with 

their conducting or sponsoring any 

collection of information as defined by 

the PRA.436 This final rulemaking 

contains information collection 

requirements. An agency may not 

conduct or sponsor, and a person is not 

required to respond to, a collection of 

information unless it displays a 

currently valid control number issued 

by the Office of Management and 

Budget (‘‘OMB’’). The Commission 

submitted its proposing release and 

supporting documentation to OMB for 

review, and requested that OMB 

approve, and assign a new control 

number for, the collections of 

information covered by the Proposing 

Release, both in an information 

collection request associated with this 

rulemaking and the part 49 rulemaking 

that would establish requirements for 

SDRs. The Commission invited the 

public and other federal agencies to 

comment on any aspect of the 

information collection requirements 

discussed in the Proposing Release. 

The Commission received comments 

from two interested parties on its 

burden estimates or on other aspects of 

the information collection requirements 

contained in its Proposing Release. One 

commenter asserted that the actual 

burden imposed on end-users to report 

swap data was significantly higher than 

the Proposing Release’s estimate, and 

suggested that the actual burden would 

be several orders of magnitude higher 

than the Commission estimated.437 This 

same commenter said that the 

Commission failed to estimate the 

financial impact that would be imposed 

on the swap industry because of this 

rule, particularly those costs associated 

with end-users.438 Another commenter 

stated that when promulgating rules and 

estimating costs, the Commission 

should take into consideration ‘‘issues 

of scale in participants and 

volumes.’’ 439

OMB issued a notice of action 

providing that the Commission should 

examine the comments received and 

submit a revised supporting statement, 

including ‘‘a description of how the 

agency has responded to any public 

comment on the [information collection 

request], including comments on 

maximizing the practical utility of the 

collection and minimizing the 

burden.’’ 440

The title for the collection of 

information under part 43 is ‘‘Real-Time 

Public Reporting of Swap Transaction 

Data.’’ OMB has assigned OMB control 

number 3038–0070 to this collection of 

information, but OMB is withholding its 

approval of this collection of 

information pending the submission of 

the revised supporting statement. The 

Commission has revised some of its 

assumptions and estimates as a result of 

changes in the requirements imposed by 

part 43 and after considering the 

comments received. The revised 

estimates are being submitted to OMB 

and can be found in the updated form 

83–I and supporting statement, which 

can be found at http://www.reginfo.gov/ 

public/do/PRAMain. 

The Proposing Release described the 

new collections of information in terms 

of four broad categories of requirements: 

Reporting, public dissemination, 

recordkeeping and determining 

appropriate minimum block size. As 

further described below, the 

Commission revised some of its 

estimates regarding the reporting, public 

dissemination and recordkeeping 

estimates from the Proposing Release. 

The Commission notes that part 43 does 

not require an SDR to determine an 

appropriate minimum block size.441

Additionally, part 43 no longer permits 

a SEF, DCM or reporting party to report 

swap transaction and pricing data to a 

third-party service provider for 

purposes of satisfying the public 

dissemination obligations under part 43 

(i.e., all real-time swap data must be 

reported to an SDR for public 

dissemination). 

A. Burden Estimates for Reporting 

Requirements 

The Commission estimated in the 

Proposing Release that annual hourly 

burdens for SEFs and DCMs to report 

swap transaction and pricing data to a 

real-time disseminator would be 

approximately 2,080 hours per SEF and 

DCM. In addition, the Commission 

anticipated there would be 40 SEFs and 

17 DCMs who may be required to report 

pursuant to part 43’s obligations.442

For those swaps executed off-facility, 

the Proposing Release estimated the 

reporting burdens associated with SDs 

and MSPs to be approximately 2,080 

annual burden hours. In the Proposing 

Release, the Commission took ‘‘a 

conservative approach’’ to calculating 

the burden hours for this information 

collection by estimating that as many as 

250 SDs and 50 MSPs would register.443

Since publication of the Proposing 

Release in November 2010, the 

Commission has had ample opportunity 

to meet with industry participants and 

trade groups, to discuss extensively the 

universe of potential registrants with the 

National Futures Association (‘‘NFA’’), 

and to review public market information 

about dealers active in the market and 

certain trade groups. Over time, and as 

the Commission has gathered more 

information on the swaps market and its 

participants, the estimated number of 

SDs and MSPs has decreased. In its FY 

2012 budget drafted in February 2011, 

the Commission estimated that 140 SDs 

might register with the Commission.444

After recently receiving additional 

specific information from NFA on the 

regulatory program it is developing for 

SDs and MSPs,445 however, the 

Commission believes that 

approximately 125 Swaps Entities, 

including only a handful of MSPs, will 

register. Therefore, the information 

collection’s proposed total burden hour 

estimate of 624,000 burden hours for 

SDs and MSPs will decrease to 260,000 

burden hours, assuming there are 125 

respondents and no adjustments to the 

response times for the registration 

forms. 

When an off-facility swap is executed 

and neither an SD nor MSP is a 

counterparty (e.g., an end-user to enduser swap), the reporting responsibility 

would fall on one of the end-users to the 

swap.446 For that reason, the 

Commission estimated that the total 

number of swap end-users that would 

be required to report their swap 


tkelley on DSK3SPTVN1PROD with RULES2
1230 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 

447 In the Proposing Release, the Commission 

requested comment on the number of swap endusers that would be required to report their swap 

transaction and pricing data pursuant to proposed 

Section 43.3. The Commission estimated that there 

would be a total of 30,000 swap market participants 

and that 1,500 of those participants would engage 

in end-user-to-end-user swap transactions (5% of 

30,000) requiring at least one of those participants 

to report such swap transaction and pricing data. 

448This estimate included the expectation that 

end users who participate in end-user-to-end-user 

swaps will contract with other entities to report the 

swap transaction and pricing data to an SDR or 

third-party service provider. 

449See CL–Dominion. 

450This is a change from the Proposing Release 

which estimated that 1,500 end-users (5% of 

30,000) would be required to report swap 

transaction and pricing data to an SDR or thirdparty service provider. 

451Non-SDs/non-MSPs reporting parties that 

contract with a third party to report swap 

transaction and pricing data to an SDR may still be 

required to submit corrected data to a SEF, DCM or 

SDR when they become aware of an error or 

omission. 

452Because the Commission has not regulated the 

swap market, the Commission was unable to collect 

data relevant to the Proposing Release’s estimates. 

For that reason, the Commission requested 

comment on these estimates. 

453See supra note 442. 

transaction and pricing data would be 

1,500 entities or persons.447 The 

Commission estimated that swap endusers (i.e., non-SD/non-MSPs) would 

expend four (4) annual burden hours 

per reporting party or person, for a total 

of 6,000 aggregate annual burden 

hours.448

In the Proposing Release, the 

Commission assumed that end-users 

who would be required to report 

pursuant to part 43 would contract with 

a third party to satisfy their obligations. 

However, as one commenter indicated, 

some end-users may choose not to 

contract with a third party, but will 

build infrastructure and hire personnel 

for purposes of reporting swap 

transaction and pricing data to an 

SDR.449

After consideration of the comments 

received and further discussions with 

the Commission’s technology experts, 

the Commission is retaining its 

estimates related to SEFs, DCMs, SDs 

and MSPs reporting burdens, but is 

revising its estimates as they relate to 

non-SDs/non-MSPs reporting burdens. 

The Commission cannot estimate with 

precision the number of non-SDs/nonMSPs that will be obligated to report 

under this rule, how many will conduct 

their own reporting or contract with a 

third party, or how many transactions 

they will have to report. Moreover, there 

will be significant deviations in 

reporting burdens on a reporting partyby-reporting party basis, based upon the 

type and transactional activity of each 

individual reporting party. 

Consequently, of the estimated 30,000 

non-SDs/non-MSPs who will transact in 

the swaps markets, the Commission is 

estimating that only 1,000 non-SDs/nonMSPs will be required to report in a 

year.450 Of those 1,000 non-SDs/nonMSPs, the Commission continues to 

believe a majority, estimated now at 

75%, will contract with third parties to 

satisfy their reporting obligations. For 

those non-SDs/non-MSPs who are 

required to report swap transaction and 

pricing data to an SDR and contract 

with a third party, the Commission 

estimates that such non-SDs/non-MSPs 

will expend 22 annual burden hours per 

reporting party or entity for reporting 

errors and omissions. Thus, the 

Commission estimates that 750 nonSDs/non-MSPs that will contract with a 

third party will expend a total of 16,500 

aggregate annual burden hours 

complying with the reporting 

requirements.451

Conversely, for the 250 non-SDs/nonMSPs that the Commission estimates 

will not contract with a third party, the 

Commission estimates such non-SDs/ 

non-MSPs will expend 676 annual 

burden hours per reporting party or 

entity, for a total of 169,000 aggregate 

annual burden hours. 

B. Burden Estimates for Public 

Dissemination Requirements 

Proposed § 43.3 required an SDR to 

publish, through an electronic medium, 

swap transaction and pricing data 

received from reporting parties as soon 

as technologically practicable, unless 

such publicly reportable swap 

transaction is subject to a time delay. 

Moreover, SDRs would be required to 

receive and publicly disseminate realtime swap transaction and pricing data 

at all times, 24-hours a day. The 

Commission estimated that there would 

be approximately 15 SDRs.452 In its 

Proposing Release, the Commission 

estimated that compliance with the 

public dissemination requirements 

would cause an SDR to expend 6,900 

annual burden hours, resulting in 

estimated aggregate annual burden 

hours of 103,500 for all SDRs. The 

Commission received no comments on 

its proposed public dissemination 

estimates, and the Commission is not 

revising them. 

C. Burden Estimates for Recordkeeping 

Requirements 

Under proposed § 43.3(i), SEFs and 

DCMs (an estimated 57 entities or 

persons),453 SDRs (an estimated 15 

entities or persons) and reporting parties 

would be required to retain all data 

relating to a reportable swap transaction 

for a period of not less than five years 

following the time at which such 

reportable swap transaction is publicly 

disseminated in real-time. With respect 

to SEFs, DCMs and real-time 

disseminators, the Commission 

estimated in the Proposing Release that 

the proposed recordkeeping 

requirement would be 250 annual 

burden hours per SEF, DCM and SDR. 

The Commission anticipated that 1,500 

swap end-users would be reporting 

parties for the purposes of this part of 

the Commission’s regulations. Since the 

Commission anticipated that there 

would be lower levels of activity 

relating to the requirement for swap 

end-users, the Commission estimated 

that there would be two (2) annual 

burden hours per swap end-user. 

Commenters on the substantive 

aspects of the proposed rulemaking 

argued that these recordkeeping 

requirements were duplicative of 

existing Commission regulations and 

provisions of other proposed 

rulemakings. In consequence, these 

recordkeeping requirements have been 

omitted from the final rulemaking, and 

thus the Commission will be 

withdrawing the burden estimates 

associated with them. 

The only remaining recordkeeping 

requirements retained from the Proposal 

Release are the timestamping 

requirements in § 43.3(h). Specifically, 

timestamps will be required for all 

publicly reportable swap transactions 

and must be applied by SEFs, DCMs, 

SDRs, SDs and MSPs. Non-SDs/nonMSPs who are required to report will 

not be obligated to comply with the 

timestamping requirements. 

Accordingly, the Commission is revising 

downward the estimated burden 

associated with recordkeeping. 

For the estimated 57 SEFs and DCMs 

who must comply with the 

timestamping requirements with respect 

to receipt of certain swap transactions 

and transmission of all transactions, 

which the Commission expects will be 

conducted electronically, the 

Commission estimates 25 annual burden 

hours per entity, which accounts for any 

system programming that may be 

required and periodic maintenance, for 

an aggregate of 1,425 annual burden 

hours. For the estimated 300 SDs and 

MSPs who must comply with the 

timestamping requirements only on 

transmission, which the Commission 

also expects to be conducted 

electronically, the Commission 

estimates that such entities will expend 

20 annual burden hours per entity, for 

an aggregate of 6,000 annual burden 

hours. Finally, for the estimated 15 

SDRs who must comply with the 


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Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 1231 

454SDRs may pass on costs of public 

dissemination through equitable and nondiscriminatory fees to the real-time reporting 

market participants. See § 43.3(i). 

455As the Commission noted in the Proposing 

Release, the supporting statement submitted in 

connection with the proposal may be obtained by 

visiting RegInfor.gov. See Real-Time NPRM supra 

note 6, at 76170. 

456 In so doing, the Commission at times has 

utilized wage rate estimates based on salary 

information for the securities industry compiled by 

the Securities Industry and Financial Markets 

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

derived from an industry-wide survey of 

participants and thus reflect an average across 

entities; the Commission notes that the actual costs 

for any individual company or sector may vary from 

the average. 

The Commission estimated the dollar costs of 

hourly burdens for each type of professional using 

the following calculations: 

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

professional type, 2009–2010)] = Estimated 2010 

total annual compensation.] The most recent data 

provided by the SIFMA report describe the 2009 

total compensation (salary + bonus) by professional 

type, the growth in base salary from 2009 to 2010 

for each professional type, and the 2010 base salary 

for each professional type; thus, the Commission 

estimated the 2010 total compensation for each 

professional type, but, in the absence of similarly 

granular data on salary growth or compensation 

from 2010 to 2011 and beyond, did not estimate 

dollar costs beyond 2010. 

[(Estimated 2010 total annual compensation)/ 

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

professional type.] 

[Hourly wage) * (Adjustment factor for overhead 

and other benefits, which the Commission has 

estimated to be 1.3)] = Adjusted hourly wage per 

professional type.] 

[(Adjusted hourly wage) * (Estimated hour 

burden for compliance)] = Dollar cost of compliance 

for each hour burden estimate per professional 

type.] 

The sum of each of these calculations for all 

professional types involved in compliance with a 

given element of part 43 represents the total cost 

for each reporting party, SD/MSP, SEF, DCM or 

SDR, as applicable to that element of part 43. 

457The capital and start-up costs for part 43’s 

reporting requirements for high activity 

respondents is estimated as 5% of the entity’s 

estimated average total capital and start-up cost of 

$6 million. 

458See, e.g., CL–NFPEEU. 

459 Depending on the number of swap asset 

classes in which a reporting party transacts (or that 

a SEF or DCM lists), and the number of SDRs that 

accept the resulting swap transaction and pricing 

data in such asset class, multiple connections to 

different SDRs may be necessary or desirable. As 

the regulatory structure develops and the swap 

markets evolve, the average number of SDR 

connections established and maintained by each 

reporting party, registered SEF and DCM may be 

different and fluid. 

460The aggregate estimate represents the sum 

total of the following initial non-recurring costs: 

[$26,689 for 355 personnel hours to develop an 

internal order management system] + [$12,824 for 

172 burden hours to establish connectivity with an 

SDR] + [$14,793 for 180 burden hours to develop 

written policies and procedures to comply with 

reporting requirements of part 43] + [$2,063 for 26 

burden hours to establish a program for reporting 

errors and omissions] = $56,369. 

461This estimate is the aggregate annual cost 

burden for 15 SDRs, including the costs for burden 

hours, operational costs and annualized capital and 

start-up costs. 

timestamping requirements on the 

receipt of transaction data as well as on 

its public dissemination, the 

Commission estimates that such entities 

will have 76 annual burden hours per 

entity, for an aggregate of 1140 annual 

burden hours. 

D. Cost Burden 

In addition to the hour burdens 

identified above, reporting parties, SEFs 

or DCMs where swaps are executed, and 

SDRs that must accept and ensure the 

public dissemination of real-time swap 

transaction and pricing data in their 

selected asset class will incur cost 

burdens in connection with reporting, 

public dissemination and recordkeeping 

obligations.454 The direct, quantifiable 

costs imposed on reporting parties, SEFs 

and DCMs will take the forms of (i) nonrecurring expenditures in technology 

and personnel; and (ii) recurring 

expenses associated with systems 

maintenance, support, and compliance. 

Although the Commission is retaining 

the cost burden estimates described in 

connection with the Proposing Release 

in substantial part, after reviewing 

comments received and consulting with 

market participants, the Commission 

has revised some of these estimates.455

Specifically, the Commission has 

revised its wage rate calculation from 

the wage rate used to calculate cost 

burdens in the Proposing Release.456

Additionally, the Commission has 

revised its cost burden estimates with 

respect to non-SD/non-MSP reporting 

parties. With respect to the cost burden 

estimates related to such non-SD/nonMSP reporting parties, the Commission 

has assumed a non-financial end-user 

lacking the technical capability and 

other infrastructure to comply with the 

part 43 requirements as the reference 

point for its cost burden estimates—in 

other words, a new market entrant with 

no prior swaps market participation or 

infrastructure. Further, the Commission 

has revised its estimates with respect to 

recordkeeping requirements, since part 

43 now only requires recordkeeping 

with respect to timestamps. SDs, MSPs, 

non-SDs/non-MSPs, SEFs, DCMs and 

SDRs will incur initial and recurring 

costs, including capital and start-up 

costs related to reporting and public 

dissemination of swap transaction and 

pricing data pursuant to part 43. The 

Commission did not receive comments 

regarding the cost burden estimates for 

initial non-recurring costs for reporting 

with respect to SDs, MSPs, SEFs, DCMs 

and SDRs. The Commission is therefore 

retaining its estimates that the initial 

non-recurring costs for each SD, MSP, 

SD, SEF and DCM to be $300,000; 

however, the Commission has estimated 

that, annualized over a useful life of 6 

years, and accounting for the total 

operational cost per year associated 

with these initial non-recurring costs, 

the annual total cost of these initial nonrecurring costs will be $200,000.457

With respect to non-SDs/non-MSPs, 

the Commission estimates that the 

initial non-recurring costs for its 

reference point, a non-financial enduser that does not contract with a third 

party to report swap data (‘‘nonfinancial end-user’’), will likely consist 

of (i) developing an internal Order 

Management System (‘‘OMS’’) capable 

of capturing all relevant swap data in 

real-time; (ii) establishing connectivity 

with an SDR that accepts data; (iii) 

developing written policies and 

procedures to ensure compliance with 

part 43; and (iv) compliance with error 

correction procedures. Based on 

comments received and meetings with 

market participants, the Commission 

estimates that many non-financial endusers will likely engage in swap 

transactions in only one asset class.458

Accordingly, for purposes of estimating 

relevant cost burdens, the Commission 

estimates that a non-financial end-user 

will establish connectivity with one 

SDR.459 The Commission estimates that 

the total initial non-recurring costs to 

each non-financial end-user to be 

$56,369.460 Further, if non-SDs/nonMSPs utilize a third party to assist in 

reporting real-time swap transaction and 

pricing data to an SDR, the Commission 

estimates the initial non-recurring costs 

per non-SD/non-MSP to be $2,063. 

The recurring cost burden estimates 

with respect to reporting and public 

dissemination of real-time swap 

transaction and pricing data have been 

revised from the estimates provided in 

connection with the Proposing Release, 

with respect to SDRs, SDs, MSPs, SEFs, 

DCMs and non-SDs/non-MSPs. The 

revisions to the cost burden estimate for 

recurring costs associated with reporting 

and public dissemination for SDRs have 

been adjusted to take into account the 

changes to the wage rate calculation. 

Accordingly, the Commission estimates 

the aggregate annual recurring costs for 

reporting and public dissemination for 

SDRs to be $23,255,210.461

The Commission has also revised its 

cost burden estimate for recurring costs 

for SEFs, DCMs, SDs and MSPs with 

respect to reporting and public 

dissemination. These estimates have 

been revised to take into account 

changes in the estimates for the number 

of entities, as well as changes to the 

wage rate calculation. Accordingly, the 


tkelley on DSK3SPTVN1PROD with RULES2
1232 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 

462This estimate is the aggregate annual cost 

burden for 40 SEFs, including $100,000 per DCM 

to maintain connectivity to an SDR, costs for 

burden hours, operational costs and annualized 

capital and start-up costs. 

463This estimate is the aggregate annual cost 

burden for 18 DCMs, including $100,000 per DCM 

to maintain connectivity to an SDR, costs for 

burden hours, operational costs and annualized 

capital and start-up costs. The number of DCMs was 

changed from 17 to 18 to reflect the designation of 

an additional contract market since the publication 

of the NPRM in the Federal Register. As of 

December 13, 2011. See http://sirt.cftc.gov/SIRT/

SIRT.aspx?Topic=TradingOrganizations&

implicit=true&type=DCM&CustomColumn

Display=TTTTTTTT. 

464This estimate is the aggregate annual cost 

burden for 125 SDs/MSPs, including $100,000 per 

SD/MSP to maintain connectivity to an SDR, costs 

for burden hours, operational costs and annualized 

capital and start-up costs. 

465The cost burden estimate represents the 

aggregate recurring costs relating to reporting and 

public dissemination for 250 non-SDs/non-MSPs 

that do not utilize third parties at a total estimated 

cost of $180,636 per non-SD/non-MSP. The 

estimated cost per non-SD/non-MSP represents the 

sum total of [$27,943 for 436 burden hours for 

capturing swap transaction and pricing data] + 

[$13,747 for 218 burden hours for maintenance of 

compliance and operational support programs] + 

[$1,366 for 22 burden hours to report errors and 

omissions] + [$100,000 to maintain connectivity to 

an SDR] + [$28,185 for operational costs] + [$9,395 

for annualized capital and start up costs]. 

466This cost burden estimate represents the 

aggregate recurring costs relating for reporting and 

public dissemination requirements for 750 nonSDs/non-MSPs that utilize a third party for 

reporting requirements pursuant to part 43. The 

Commission recognizes that these costs may vary 

based on the level of swap activity by a non-SD/ 

non-MSP. 

467Non-SDs/non-MSPs do not have any 

recordkeeping obligations pursuant to part 43. 

468The Commission estimates 15 SDRs, 125 SDs/ 

MSPs, 40 SEFs and 18 DCMs. 

469 $150,017,837.00 (total) = $23,349,065 (SDRs) + 

$54,219,383 (SDs and MSPs) + $17,402,682. (SEFs) 

+ $7,831,207. (DCMs) + $45,159,000 (RP Non-SD/ 

non-MSP) + $2,056,500 (RP non-SD/non-MSP that 

contracts with a third party). 

470As the U.S. Senate Committee on Banking, 

Housing, and Urban Affairs explained concerning 

the 2008 financial crisis: 

Information on prices and quantities [in ‘‘overthe-counter,’’ or ‘‘OTC,’’ derivatives contracts] is 

opaque. This can lead to inefficient pricing and risk 

assessment for derivatives users and leave 

regulators ill-informed about risks building up 

throughout the financial system. Lack of 

transparency in the massive OTC market intensified 

systemic fears during the crisis about interrelated 

derivatives exposures from counterparty risk. These 

counterparty risk concerns played an important role 

in freezing up credit markets around the failures of 

Bear Stearns, AIG, and Lehman Brothers. 

S. Rep. No. 111–176, at 30 (2010). More 

specifically with respect to credit default swaps 

(‘‘CDSs’’), the Government Accountability Office 

found that ‘‘comprehensive and consistent data on 

the overall market have not been readily available,’’ 

that ‘‘authoritative information about the actual size 

of the CDS market is generally not available,’’ and 

that regulators currently are unable ‘‘to monitor 

activities across the market.’’ Government 

Accountability Office, Systemic Risk: Regulatory 

Oversight and Recent Initiatives to Address Risk 

Posed by Credit Default Swaps, GAO–09–397T 

(March 2009) at 2, 5, 27. 471See Congressional Research Service Report for 

Congress, The Dodd-Frank Wall Street Reform and 

Consumer Protection Act: Title VII, Derivatives, by 

Mark Jickling and Kathleen Ann Ruane (August 30, 

2010); Dep’t of the Treasury, Financial Regulatory 

Reform: A New Foundation: Rebuilding Financial 

Supervision and Regulation 1 (June 17, 2009) at 47– 

48. 

472CEA section 2(a)(13)(B) authorizes the 

Commission to ‘‘make 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.’’ CEA 

sections 2(a)(13)(C) and (E) authorize and require 

the Commission ‘‘to provide by rule for the public 

availability of swap transaction and pricing data.’’ 

These provisions specify that the rules shall, with 

respect to the swaps that are subject to the clearing 

mandate (or excepted from such mandate pursuant 

to CEA section 2(h)(7)) or that are voluntarily 

cleared, provide for the ‘‘real-time public reporting’’ 

of such transactions in a manner that: (1) Preserves 

swap counterparty anonymity; (2) takes into 

account whether the public dissemination will 

materially reduce market liquidity; and (3) specifies 

the appropriate criteria and time delays for 

reporting large notional swaps (block trades). With 

respect to certain uncleared swaps, CEA section 

2(a)(13)(C)(iii) requires that the rules require realtime public reporting for such transactions in a 

manner that does not disclose the business 

transactions and market positions or any person. 

CEA section 2(a)(13)(A) defines ‘‘real-time public 

reporting’’ as ‘‘to report data relating to a swap 

transaction, including price and volume, as soon as 

technologically practicable after the time at which 

the swap transaction has been executed.’’ In 

addition, section 721(b) of the Dodd-Frank Act 

authorizes the Commission to define certain terms 

added to the CEA by the Dodd-Frank Act, including 

the term ‘‘as soon as technologically practicable.’’ 

Commission estimates the aggregate 

annual recurring costs for reporting and 

public dissemination for SEFs to be 

$17,245,242.462 Additionally, the 

Commission estimates the aggregate 

annual recurring costs for reporting and 

public dissemination for DCMs to be 

$7,760,359.463 Further, the Commission 

estimates the aggregate annual recurring 

costs for reporting and public 

dissemination for SDs/MSPs to be 

$28,891,383.464

With respect to non-SDs/non-MSPs, 

the Commission estimates that the 

recurring cost burdens for a nonfinancial end-user will likely consist of 

(i) capturing swap transaction and 

pricing data in a manner sufficient to 

comply with part 43; (ii) maintaining 

connectivity to an SDR; (iii) maintaining 

compliance and operational support 

programs; and (iv) reporting of errors 

and omissions. The Commission 

estimates the aggregate annual recurring 

costs for reporting and public 

dissemination for a non-financial enduser to be $45,159,000.465 Further, if 

non-SDs/non-MSPs utilize a third party 

to assist in reporting real-time swap 

transaction and pricing data to an SDR, 

the Commission estimates the aggregate 

annual recurring costs for reporting and 

public dissemination for such non-SD/ 

non-MSP reporting parties to be 

$2,056,500.466

In addition to the costs burdens 

associated with reporting and public 

dissemination, part 43 imposes costs on 

SDRs, SDs, MSPs, SEFs and DCMs with 

respect to recordkeeping.467 These 

estimated cost burdens have been 

adjusted downward from the estimates 

associated with the Proposing Release 

since the part 43 rules only require 

recordkeeping in connection with 

timestamps. The Commission estimates 

the total aggregate non-recurring and 

recurring costs for recordkeeping as 

follows:468 $93,855 for SDRs; $328,000 

for SDs/MSPs; $157,440 for SEFs; and 

$70,848 for DCMs. 

Accordingly, the estimated aggregate 

cost burden for all market participants 

to comply with part 43 is 

$150,017,837.00.469

For further information relating to the 

revised cost burden estimates, please 

refer to the updated form 83–I and 

supporting statement submitted to 

OMB, which can be found at http:// 

www.reginfo.gov/public/do/PRAMain. 

V. Cost-Benefit Considerations 

A. Introduction 

The swaps markets, which have 

grown exponentially in recent years, are 

now an integral part of the nation’s 

financial system. As the financial crisis 

of 2008 demonstrated, the absence of 

transparency in the swaps markets can 

pose systemic risk to this system.470 In 

part, the Dodd-Frank Act seeks to 

promote the financial stability of the 

United States by improving financial 

system accountability and transparency. 

More specifically, Title VII of the DoddFrank Act directs the Commission to 

promulgate regulations to increase 

swaps markets’ transparency and 

thereby reduce the potential for 

counterparty and systemic risk.471

Transaction reporting is a 

fundamental component of the 

legislation’s objective to reduce risk, 

increase transparency, and promote 

market integrity within the financial 

system generally, and the swaps market 

in particular. Title VII designates the 

Commission to oversee the swaps 

markets and develop appropriate 

regulations. Specifically, section 727 of 

the Dodd-Frank Act amends the 

Commodity Exchange Act by inserting 

new section 2(a)(13), which requires 

that swap transaction and pricing data 

be made publicly available. The DoddFrank Act specifies that swap price and 

volume data be reported to the public as 

soon as technologically practicable after 

the swap has been executed, i.e., realtime public reporting, and at the same 

time requires that public dissemination 

not identify the participants to the swap 

transaction.472


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473Part 43 covers all swaps under the 

Commission’s jurisdiction (i.e., interest rate, foreign 

exchange, equity, credit and ‘‘other commodity’’), 

cleared and uncleared, regardless of the method of 

execution (e.g., executed on a SEF, DCM or 

bilaterally negotiated). 

474Section 43.3(a)(1) states that for purposes of 

part 43, a ‘‘registered swap data repository’’ shall 

include swap data repositories that are 

provisionally registered pursuant to the 

Commission’s part 49 rules. 

475Section 43.4 and appendix A to part 43 specify 

the data an SDR is required to publicly disseminate. 

Consistent with its obligations under the statute, the 

Commission considered whether the public 

dissemination of such data would compromise the 

anonymity of the parties to a swap, or would 

disclose the business transactions and market 

positions of any party to an uncleared swap. 

476 7 U.S.C. 19(a). 

477See SDR Final Rule. 76 FR 54538 at 54572. 

478Section 43.3(i) authorizes an SDR to charge 

fees to persons reporting the real-time data, so long 

as such fees are equitable and non-discriminatory. 

479The term ‘‘off-facility swap’’ is defined in 

§ 43.2. 

480Such responsible counterparty would be the 

‘‘reporting party,’’ as defined in § 43.2. 

481See discussion regarding § 43.3(c)(2). 

In promulgating part 43 of its 

regulations, the Commission 

implements Congress’ mandate that 

swap transaction and pricing data be 

made available to the public in realtime. Together, the statute and 

Commission’s rules promote 

transparency and enhance price 

discovery while protecting the 

anonymity of market participants.473

Part 43 achieves the statutory objectives 

of transparency and enhanced price 

discovery by, inter alia, requiring that 

market participants ultimately report 

swap transaction and pricing data to an 

SDR 474 and by requiring SDRs to ensure 

the public dissemination of such data in 

real time.475 The Commission expects 

that the increased transparency 

achieved by the increased availability of 

pricing information will enhance the 

price discovery process and improve 

financial market systemic risk 

management. In the sections that follow, 

the Commission considers the costs and 

benefits of part 43 as required by CEA 

section 15(a). 

1. Background 

CEA section 15(a) requires the 

Commission to consider the costs and 

benefits of its actions in light of five 

broad areas of market and public 

concern: (1) Protection of market 

participants and the public; (2) 

efficiency, competitiveness, and 

financial integrity of futures markets; (3) 

price discovery; (4) sound risk 

management practices; and (5) other 

public interest considerations.476 The 

Commission, in its discretion, may give 

greater weight to any one of the five 

enumerated areas and may determine 

that, notwithstanding costs, a particular 

rule protects the public interest. 

To the extent that these new rules 

reflect the statutory requirements of the 

Dodd-Frank Act, they will not create 

costs and benefits beyond those 

mandated by Congress in passing the 

legislation. However, the rules may 

generate costs and benefits attributable 

to the Commission’s determinations 

regarding implementation of the DoddFrank Act’s statutory requirements. 

Moreover, as this rulemaking is a 

reporting rule, many of the costs of the 

rulemaking are associated with 

collections of information. The 

Commission is obligated to estimate the 

burden of and provide supporting 

statements for any collections of 

information it seeks to establish under 

considerations contained in the PRA, 44 

U.S.C. 3501 et seq., and to seek approval 

of those requirements from the OMB. 

Therefore, the estimated burden and 

support for the collections of 

information in this this rulemaking, as 

well as the consideration of comments 

thereto, are discussed in the PRA 

section of this rulemaking and the 

information collection requests filed 

with OMB as required by that statute. 

Otherwise, the costs and benefits of the 

Commission’s determinations are 

considered in light of the five factors set 

forth in CEA section 15(a). 

To aid in fulfilling its statutory 

responsibility to consider the costs and 

benefits of its proposed rules, the 

Commission sought comment on its 

proposed rulemaking for a period of 60 

days, and specifically requested that 

commenters submit any data or other 

information quantifying or qualifying 

the costs and benefits of the proposal 

with their comment letters. The 

Commission received approximately 60 

comments addressing the costs and 

benefit considerations of the proposed 

rule, which addressed primarily 

regulatory alternatives and the costs 

associated with the proposed 

information collection requirements, 

which are covered in the PRA section of 

this rulemaking and in the supporting 

statements that were filed and will be 

filed with OMB, as required under that 

statute. Nevertheless, wherever 

reasonably feasible, the Commission has 

endeavored to quantify the costs and 

benefits of the final rules, and did so in 

the proposed rule to the extent that the 

costs of the rulemaking were related to 

collections of information for which the 

Commission must account under the 

PRA. In a number of instances, however, 

it is not reasonably feasible to quantify, 

particularly with regard to the benefits 

of the final rules. Where quantification 

is not feasible, the Commission has 

considered the costs and benefits of the 

final rule in qualitative terms. 

In the paragraphs the follow, the 

Commission, after explaining its cost 

estimation methodology, discusses the 

economic effects of part 43 along the 

two major drivers of the costs and 

benefits of the rulemaking: (1) Reporting 

and public dissemination; and (2) 

recordkeeping and timestamping. 

2. Cost Estimation Methodology 

The Commission recognizes that the 

costs of complying with part 43 are 

largely attributable to reporting, the 

costs for which are covered in the 

Commission’s PRA analysis, as required 

by that statute. With respect specifically 

to SDRs, the Commission has estimated 

their incremental costs to comply with 

the real-time reporting and public 

dissemination requirements of this 

rulemaking above the base operating 

costs reflected in a separate rulemaking 

and the PRA analysis associated with 

it.477 The Commission expects SDRs to 

recover these incremental costs in the 

form of fees assessed on reporting 

parties, SEFs and DCMs for use of the 

SDRs’ public dissemination services.478

B. Reporting and Public Dissemination 

Requirements of Part 43 

CEA section 2(a)(13)(F) provides the 

Commission with the authority to 

determine the reporting requirements 

for parties to a swap. Consistent with 

this authority, § 43.3(a)(2) provides that 

a reporting party satisfies its obligation 

to report real-time swap transaction and 

pricing data when it executes a swap on 

or pursuant to the rules of a SEF or 

DCM. In turn, § 43.3(b)(1) requires SEFs 

and DCMs to report data related to 

publicly reportable swap transactions to 

an SDR for public dissemination. For 

‘‘off-facility swaps,’’479 § 43.3(a)(3) 

establishes a protocol for determining 

counterparty responsibility to report 

real-time swap transaction and pricing 

data to an SDR.480 Further, § 43.3(c)(2) 

specifies that an SDR must accept and 

publicly disseminate swap transaction 

and pricing data in real-time for all 

swaps in its selected asset class, unless 

otherwise prescribed by the 

Commission.481 Thus, depending on the 

place of execution and the 

counterparties to a swap, the reporting 

obligation may fall on a SEF, DCM, SD, 

MSP, or a non-SD/non-MSP. 

CEA section 2(a)(13)(D) provides that 

‘‘[t]he Commission may require 

registered entities to publicly 

disseminate the swap transaction and 

pricing data required to be reported 

under this paragraph.’’ Pursuant to this 

authority, the Commission is adopting 


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1234 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 

482Section 43.4(b) provides ‘‘Any registered swap 

data repository that accepts and publicly 

disseminates swap transaction and pricing data in 

real-time shall publicly disseminate the information 

described in appendix A to this part.’’ 

483Congress recognized the competitive pricing 

benefit of real-time information in the related 

context of swap exchange trading. See S.Rep. No. 

111–176, at 34 (2010) (‘‘‘the relative opaqueness of 

the OTC market implies that bid/ask spreads are in 

many cases not being set as competitive as they 

would be on exchanges’’’) (quoting Stanford 

University Professor Darrel Duffie). 

484Congressional Research Service Report for 

Congress, The Dodd-Frank Wall Street Reform and 

Consumer Protection Act: Title VII, Derivatives, by 

Mark Jickling and Kathleen Ann Ruane (August 30, 

2010). 

485At least six commenters cited at least 13 

studies by institutional, academic and industry 

professionals. See, e.g., CL–JPM; CL–Better Markets; 

CL–ATA; CL–FINRA; CL–Cleary; and CL–ISDA/ 

SIFMA. 

486See Kyle, Albert S., Continuous Auctions and 

Insider Trading, Econometrica 53, no. 6 (1985): 

1315–1335. This study is also cited in 

Bessembinder et al. (2008). See infra note 497. See 

also, CL–JPM. 

rules requiring an SDR to ensure the 

public dissemination of all swap 

transaction and pricing data it accepts 

pursuant to part 43. Specifically, 

§ 43.3(b)(2) requires an SDR to ensure 

that swap transaction and pricing data 

for all publicly reportable swap 

transactions within an asset class are 

publicly disseminated as soon as 

technologically practicable, unless the 

transaction is subject to a time delay 

described in § 43.5. In addition, 

§ 43.4(b) prescribes the manner in 

which an SDR must publicly 

disseminate the data to comply with 

part 43.482

1. Benefits of the Reporting and Public 

Dissemination Requirements 

The Commission anticipates that part 

43 will generate several overarching, if 

presently unquantifiable, benefits to 

swaps market participants and the 

public generally. These include: 

Improvements in market quality; price 

discovery; improved risk management; 

economies of scale and greater 

efficiencies; and improved regulatory 

oversight. 

The Commission believes these 

benefits, made possible by the public 

dissemination of comprehensive and 

timely swap transaction data, will 

accrue to market participants in a 

number of ways: 

• Enhanced price discovery made 

possible by the comprehensive and 

timely swap transaction data that the 

part 43 requires be reported and 

publicly disseminated. 

• Enhanced ability to manage risk as 

a result of the greater visibility into 

swap market risk pricing, made possible 

by the comprehensive and timely swap 

transaction data that the part 43 requires 

be reported and publicly disseminated. 

• Enhanced swap market price 

competition made possible by the 

comprehensive and timely swap 

transaction data that the part 43 requires 

be reported and publicly 

disseminated.483

• Market price transparency provides 

a check against SDs or other market 

participants trading at noncompetitive 

prices; provides post-trade information 

market participants may use to negotiate 

lower transaction costs; and facilitates 

price competition between swap 

dealers. 

• More robust risk monitoring and 

management capabilities as a result of 

the systems required under part 43 

which, concurrent with real-time 

reporting capability, will monitor the 

participant’s current swap market 

position. 

• New tools to process transactions at 

a lower expense per transaction 

attributable to the systems required 

under part 43. These tools will enable 

participants to handle increased 

volumes of swaps with less marginal 

expense, or existing volumes of swaps 

with greater efficiency. 

• Furthers the development of 

internationally recognized standards for 

the financial services industry by 

utilizing UTC. 

Transaction reporting and public 

dissemination under part 43 also 

benefits the public generally by 

supporting the Commission’s 

supervisory function over the swaps 

market, as well as the broader 

supervisory responsibilities of U.S. 

financial regulators to protect against 

financial market systemic risk. Realtime public reporting provides a means 

for the Commission to gain a better 

understanding of the swaps market— 

including the pricing patterns of certain 

commodities. The public dissemination 

of swap transaction and pricing data 

will further enable the Commission, 

market participants and the public to 

observe the effects of transparency on 

the swaps markets. 

Public dissemination of swap 

transaction and pricing data will 

enhance the Commission’s ability to 

detect anomalies in the market. For 

example, the availability of such data in 

real-time will help Commission monitor 

the markets subject to its jurisdiction. 

Transparency facilitated by real-time 

transaction reporting also will help 

provide a check against a reoccurrence 

of the type of systemic risk build-up that 

occurred in 2008, when ‘‘the market 

permitted enormous exposure to risk to 

grow out of the sight of regulators and 

other traders [and d]erivatives 

exposures that could not be readily 

quantified exacerbated panic and 

uncertainty about the true financial 

condition of other market participants, 

contributing to the freezing of credit 

markets.’’ 484

While the Commission believes that 

part 43 will yield significant benefits to 

the public and swaps market 

participants, the Commission 

acknowledges that the final rules will 

entail costs. As discussed more fully 

below, the Commission is mindful of 

the costs of its rules and has carefully 

considered comments regarding the 

same. To the extent possible and 

consistent with the statutory and 

regulatory objectives of this rulemaking, 

the Commission has incorporated 

comments presenting cost-mitigating 

alternatives. 

2. Costs of the Reporting and Public 

Dissemination Requirements 

The Commission has not identified 

quantifiable costs of data collection that 

are not associated with an information 

collection subject to the PRA. These 

costs therefore have been accounted for 

in the PRA section of this rulemaking 

and the information collection requests 

filed with OMB, as required by the PRA. 

3. Reporting and Public Dissemination: 

Consideration of Studies, Alternatives 

and Cost-Mitigation 

i. Studies 

Several commenters cited economic 

or academic studies in their comment 

letters or submitted studies relating to 

the introduction of transparency 

resulting from the public reporting of 

trade data.485 The comments and 

studies generally discussed the effects of 

transparency on liquidity and the costs 

to market participants. 

None of these studies explicitly 

address the issue of market transparency 

as it pertains to the real-time public 

dissemination of swap transaction and 

pricing data and as adopted in part 43. 

Five of the studies cited by commenters 

addressed issues that were tangential to 

the issue of market transparency as it 

relates to part 43, since they did not 

analyze the effects of market 

transparency directly. One study 

identified, and differentiated among, a 

number of related concepts of market 

quality that fall under the umbrella of 

‘‘liquidity.’’ 486 One commenter 

analogized the benefits of transparency 

to the financial sector and the reticence 

of market participants to acknowledge 

those benefits to the energy and 

industrial sector of the early 1970s, 

citing a study that addressed the 


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487See Porter, Michael E., and Claas van der 

Linde, Green and Competitive: Ending the 

Stalemate, Harvard Business Review 73, no. 5 

(1995): 120–134. See also CL–Better Markets. 

488See Cobbs, Richard, and Alex Wolf, Jet Fuel 

Hedging Strategies: Options Available for Airlines 

and a Survey of Industry Practices (2004). See also 

CL–ATA. 

489See Kirilenko, Andrei, Kyle, Albert S., Samadi, 

Mehrdad, and Tugkan Tuzun, The Flash Crash: The 

Impact of High Frequency Trading on an Electronic 

Market (2011). See also CL–Better Markets. 

490See CFTC staff, Derivatives Reform: 

Comparison of Title VII of the Dodd-Frank Act to 

International Legislation (2010). See also CL– 

Cleary. 

491See CL–FINRA. 

492TRACE enables real-time reporting and public 

dissemination in the corporate bond market. 

Currently, TRACE requires public dissemination to 

occur within 15 minutes of the time of execution 

for most trades. Congress was cognizant of TRACE 

in passing the Dodd-Frank Act. See S. Rep. No. 

111–176, at 34 (2010) (‘‘‘empirical evidence 

appearing in the academic literature has not given 

much support’’’ to claims of resistant bond dealers 

that ‘‘‘more price transparency would reduce the 

incentives of dealers to make markets and in the 

end reduce market liquidity’’’) (quoting Stanford 

University Professor Darrell Duffie). 

493See Edwards, Amy K., Harris, Lawrence E., 

and Michael S. Piwowar, Corporate Bond Market 

Transaction Costs and Transparency, The Journal of 

Finance 62, no. 3 (2007): 1421–1451. 

494See Cici. Gjergji, Gibson, Scott, and John J. 

Merrick, Working Paper, Missing the Marks? 

Dispersion in Corporate Bond Valuations Across 

Mutual Funds (2010). 

495See Duffie, Darrell, Li, Ada, and Theo Lubke, 

Federal Reserve Bank of New York Staff Reports, 

Policy Perspectives on OTC Derivatives Market 

Infrastructure (2010). 

496See Goldstein, Michael A., Hotchkiss, Edith S., 

and Erik R. Sirri, Transparency and liquidity: A 

controlled experiment on corporate bonds, The 

Review of Financial Studies 20, no. 2 (2007): 235– 

273. 

497See Hendrik Bessembinder, William Maxwell, 

and Kumar Venkataraman, Market transparency, 

liquidity externalities, and institutional trading 

costs in corporate bonds, Journal of Financial 

Economics 82 (2006): 251–288. See also, CL–Cleary, 

CL–FINRA, CL–ISDA/SIFMA, and CL–JPM. 

498 Id. at 284. 

499The study indicates that this can be 

extrapolated by calculating a trading cost reduction 

of approximately $1 billion across the entire market 

for TRACE-eligible bonds. 

500Bessembinder et al. at 283. 

501 Id. 

502See Bessembinder, Hendrik and Maxwell, 

William F., Transparency and the Corporate Bond 

Market, Journal of Economic Perspectives, 22, no. 

2 (2008): 217–234. 

503As one commenter noted, ‘‘most studies of 

TRACE have focused only on its effect on spreads 

(particularly in smaller transaction sizes) and have 

not examined its effect on either market depth or 

resiliency, particularly in the case of large-sized 

transactions.’’ CL–Cleary. See also supra note 492. 

504Bessembinder and Maxwell at 232. 

505See CL–JPM. 

benefits of environmental regulation to 

the energy and industrial sectors.487

One cited study addressed the manner 

in which airlines use jet fuel swaps to 

hedge risk.488 Another addressed the 

impacts of high-frequency trading on 

the marketplace, which the commenter 

cited in a discussion of high frequency 

and algorithmic trading.489 Another 

commenter cited a study that addressed 

differences in reporting obligations in 

domestic and foreign jurisdictions when 

discussing the real-time public reporting 

of cross-border transactions.490 The 

remaining studies cited by commenters 

addressed the general effects of 

transparency on the marketplace. 

One commenter 491 cited five studies 

that addressed the benefits of the 

introduction of transparency through 

the Transaction Reporting and 

Compliance Engine (‘‘TRACE’’) system, 

which provides the real-time transaction 

reporting and public dissemination in 

the corporate bond market.492

Acknowledged differences between the 

swaps market and the corporate bond 

market notwithstanding, the 

Commission believes that to the extent 

the study discusses the benefits of 

transparency in the corporate bond 

market, such benefits may be relevant to 

the discussion of transparency in the 

swaps market. One study of TRACE 

cited by the commenter suggests that, 

according to transaction data, the 

transaction costs of bonds fell following 

the introduction of transparency to the 

corporate bond market.493 Another 

study suggests that the implementation 

of TRACE played a part along with other 

factors in reducing the dispersion of the 

valuation of corporate bonds.494 The 

commenter cited another study that 

suggests that post-trade transparency 

alone, while less beneficial than the full 

transparency (pre-trade and post-trade) 

offered by exchanges, could serve as a 

partial substitute for the price 

transparency offered by exchanges. This 

study further stated that the 

implementation of a TRACE-like price 

reporting system could ‘‘offer 

substantial improvements in market 

efficiency’’ for many actively-traded 

derivative products.495

Another study implied that the 

implementation of TRACE had either no 

effect or a positive effect on liquidity for 

BBB corporate bonds, and that spreads 

on newly transparent bonds declined 

relative to bonds that did not experience 

a change in transparency. The study 

further implied that additional 

transparency is not associated with 

greater trading volume.496

Another study discussing TRACE 

indicated that TRACE presented a 

number of important benefits to the 

corporate bond marketplace.497 As the 

authors note: 

The results * * * are important because 

they verify that market design, and in 

particular decisions as to whether to make 

the market transparent to the public, have 

first-order effects on the costs that customers 

pay to complete trades. Further, since the 

sample employed * * * consists of 

institutional trades, these results indicate 

that public trade reporting is important not 

only to relatively unsophisticated small 

traders, but also to professional investors 

who make multi-million dollar 

transactions.498

In examining the effects of 

introducing transparency through 

TRACE, the same authors identify a 

‘‘remarkable’’ average decrease in 

execution costs of 50% for TRACEeligible bonds.499 Bessembinder et al. 

state that the magnitude of that estimate, 

which reflects the impact of 

implementing transparency in the 

corporate bond market through TRACE, 

‘‘emphasizes the potential economic 

importance of designing market 

mechanisms optimally.’’ 500 Indeed, it is 

entirely plausible that, should a similar 

savings effect be realized in the swaps 

markets as a result of real-time public 

reporting required under part 43, such 

savings would ultimately be passed on 

to the end-users of the swaps. 

Bessembinder et al. further identify a 

decrease of 20% in the execution costs 

of non-TRACE-eligible bonds. The 

authors state that this ‘‘likely reflects a 

liquidity externality by which better 

pricing information regarding a subset 

of bonds improves valuation and 

execution cost monitoring for related 

bonds.’’ 501 The Commission believes it 

is entirely plausible that a similar 

savings effect could be realized in the 

swaps markets as a result of part 43’s 

requirements. Improved pricing 

information for standardized swaps 

could improve the pricing of swaps, and 

thus reduce the transaction costs of nonstandardized swaps whose prices could 

be sufficiently and reliably correlated 

with the prices of the standardized 

swaps by market participants. 

In a subsequent work,502

Bessembinder and Maxwell 

acknowledge that liquidity can refer to 

a number of related but distinct 

concepts, but the literature regarding 

TRACE’s effects on the corporate bond 

market have focused primarily on a 

single one of these concepts: Customers’ 

trading costs.503 The study states that 

‘‘the cost of trading corporate bonds 

decreased [following the introduction of 

TRACE], but so did the quality and 

quantity of the services formerly 

provided by bond dealers.’’ 504 One 

commenter also stated that this study 

suggests that the implementation of 

TRACE reduced the market depth 

available to institutional customers.505

Bessembinder et al. state that 

‘‘consistent with the reasoning that 

market makers earned economic rents in 


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506Bessembinder et al. at 283. 

507See CL–FSR. 

508As one commenter noted: ‘‘[D]ue to their 

commercial interests, technological know-how and 

business relationships, swap dealers and MSPs are 

more appropriate reporting counterparties than U.S. 

end-users and are just as, if not more, capable of 

complying with reporting obligations. * * * In 

addition, swap dealers and MSPs will be best 

positioned to develop at the lowest cost the 

technological infrastructure or relationships with 

third-party service providers necessary to meet the 

reporting obligation.’’ CL–SIFMA AMG at 2. 

509Swaps executed ‘‘pursuant to the rules’’ of a 

SEF or DCM would include block trades. 

510See CL–Tradeweb. 

511See Proposed § 43.4(a). 75 FR 76174. 

512See CL–CME. 

513See CEA section 21(a)(1)(B), added by section 

728 of the Dodd-Frank Act: ‘‘A derivatives clearing 

organization may register as a swap data 

repository.’’ 

514See CL–Cleary. 

515 Id. 

516See CL–Shell. 

517See supra section II.B.2 for a discussion of 

definition of ‘‘publicly reportable swap transaction’’ 

in § 43.2 and section II.A.1 for a discussion of 

§ 43.1. 

518As discussed and referenced in this rule, 

internal swaps between wholly-owned subsidiaries 

of the same parent entity may include back-to-back 

swap transactions which are a combination of two 

or more swap transactions between or among 

affiliates to help manage the risks associated with 

a market-facing swap transaction. In general, a backto-back swap transaction effectively transfers the 

risks associated with a market-facing swap 

transaction to an affiliate that was not an original 

party to such transaction. Back-to-back swap 

transactions may occur in a number of different 

the opaque market, or that the costs of 

market making are lower in the more 

transparent environment,’’ trading costs 

were reduced for large institutional 

traders after the implementation of 

TRACE.506 With regard to the economic 

rents earned by market makers in the 

‘‘opaque market,’’ the authors’ findings 

imply that in an opaque marketplace, 

dealers are able to extract economic 

rents from customers, especially lessinformed customers, and that these 

rents are reduced after the introduction 

of transparency because customers are 

able to view more pricing information. 

In addition, the study suggests that 

introducing transparency could improve 

the ability of dealers to share risks, 

which may result in a decrease in 

inventory carry costs, translating into 

reduced costs of trading for customers. 

The Commission anticipates that, just 

as trading costs were reduced in the 

corporate bond market following the 

implementation of TRACE, the 

requirements of part 43 will similarly 

result in reduced trading costs and 

increased efficiency in the swaps 

market. 

ii. Alternatives and Cost Mitigation 

In response to the Commission’s 

Proposing Release, several commenters 

presented reasonable alternatives. The 

Commission carefully considered—and 

where reasonable, adopted—those in an 

effort to reduce the burden of its 

regulations while achieving the desired 

regulatory objective. Other alternatives 

presented, however, were not accepted 

because, in the Commission’s judgment 

they would not have achieved the 

regulatory objectives discussed 

throughout this rulemaking. 

The comments and alternatives 

presented can be classified along several 

broad themes: (1) Who reports; (2) what 

is (and is not) to be reported; (3) when 

the data is to be reported and made 

public; (4) how the data is to be reported 

(i.e., data fields); and (5) phasing of 

compliance. These categories are 

discussed in the paragraphs that follow. 

Who Reports 

Commenters requested that the 

Commission allow parties to negotiate 

independently who will report rather 

than follow the reporting hierarchy for 

off-facility swaps discussed in the 

Proposing Release.507 The Commission 

accepted this alternative and as adopted 

§ 43.3(a)(3) permits independent 

negotiation between counterparties of 

off-facility swaps to determine the 

reporting party for such swap. The 

Commission anticipates that the party 

with the most cost-effective means for 

reporting will take that role. 

The reporting protocol established in 

§ 43.3(a)(3), which requires the SD to 

report an off-facility swap with a nonSD counterparty when the reporting 

responsibility is not negotiated, is also 

cost-mitigating.508 Section 43.3(a)(2) 

requires that for any swap executed on 

or pursuant to the rules509 of a SEF or 

DCM, the SEF or DCM—not the 

transacting party—must report the 

transaction and pricing data to an SDR 

for public dissemination.510 The 

Commission anticipates that SEFs and 

DCMs, as part of their registration and 

ongoing compliance requirements, will 

be required to have the technological 

capability to transmit real-time swap 

transaction and pricing data to SDRs, 

thus reducing the costs of transmission 

for persons that execute publicly 

reportable swap transactions on the SEF 

or DCM. The Commission further 

anticipates that SDs and MSPs will be 

more capable than financial and nonfinancial end-users of implementing the 

necessary infrastructure and personnel 

to comply with part 43, thus reducing 

the costs of reporting amongst the 

parties to the transaction. 

To further reduce the financial burden 

of complying with part 43, particularly 

for end-users, the Commission is 

allowing reporting parties to contract 

with a third party—including a DCO 

that clears the swap—to report the data 

to an SDR. The Commission recognizes 

that the use of a third party service 

provider will likely result in costs to the 

reporting party. However, the 

Commission anticipates that the costs to 

the reporting party will be less 

burdensome than those that would be 

incurred by certain non-SD/non-MSP 

counterparties to establish infrastructure 

and hire personnel to comply with the 

part 43 real-time reporting 

requirements. The Commission does not 

agree, however, that reporting for all 

swaps should be required to be 

processed through a SEF or DCM. 

Rather, the Commission believes it more 

efficient to allow flexibility for those 

capable of directly reporting real-time 

swap transaction and pricing data to an 

SDR. 

The proposed rule permitted public 

dissemination to occur through either 

an SDR or a third-party service 

provider.511 The Commission received 

several comments regarding this aspect 

of its proposal: Some commenters 

agreed with the Proposing Release and 

others thought it would be more 

appropriate to permit only registered 

entities to publicly disseminate swap 

data. One commenter stated that 

because many DCOs already have the 

necessary infrastructure and will 

establish connectivity with SEFs and 

DCMs, the Commission should require 

that public dissemination occur through 

DCOs.512 There is nothing in part 43 

that would prevent a DCO from 

registering as an SDR513 and ensuring 

that swap transaction and pricing data 

is publicly disseminated, or from 

operating as a third party; however, the 

Commission is not requiring that such 

dissemination occur through DCOs. 

What Is (and Is Not) To Be Reported 

Commenters expressed concern that 

the costs of reporting swaps between 

affiliates would be high.514 Many of 

these same commenters asserted that the 

benefits to reporting swaps between 

affiliates are minimal or non-existent.515

Others contended that the public 

dissemination of swaps between 

affiliates would distort, rather than 

enhance, price discovery.516 To address 

these concerns, and as discussed 

previously in sections II.A.2 and II.B.2 

of this Adopting Release, the 

Commission’s definition of ‘‘publicly 

reportable swap transaction’’ does not, 

at this time, include certain swaps that 

are not arm’s length transactions.517 The 

Commission further clarified in an 

example that internal swaps518 between 


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ways. For example, an affiliate immediately may 

enter into a mirror swap transaction with its 

affiliate on the same terms as the marketing-facing 

swap transaction. By way of further example, a 

market-facing affiliate may enter into multiple 

transactions with affiliates that are not at arm’s 

length in order to transfer the risks associated with 

an arm’s length, market-facing transaction. 

519See CL–TriOptima. The definition of ‘‘publicly 

reportable swap transaction’’ also states that 

portfolio compression exercises would be excluded 

from the definition. The Commission agrees with 

those commenters who asserted the reporting of 

portfolio compression exercises would be costly 

without the public dissemination of such swap 

transaction and pricing data enhancing price 

discovery. 

520See section II.E. (‘‘Section 43.5—Time Delays 

for Public Dissemination of Swap Transaction and 

Pricing Data’’). 

521See CL–ISDA/SIFMA. 

522Reporting parties, SEFs and DCMs may agree 

to report different timestamps to the SDR or to 

record different timestamps pursuant to § 43.3(i). 

523See, e.g., CL–Coalition of Energy End-Users. 

524See supra section III. (‘‘Effectiveness/ 

Implementation and Interim Period’’). 

wholly-owned subsidiaries of the same 

parent entity and portfolio compression 

exercises are not subject to part 43 

because they fail to meet the definition 

of ‘‘publicly reportable swap 

transaction.’’ 519

When the Data Is To Be Reported and 

Made Public 

Section 43.5 provides the time delays 

for public dissemination of swap 

transactions and pricing data for (i) 

publicly reportable swap transactions 

that have notional or principal amounts 

that are equal to or greater than the 

appropriate minimum block sizes for 

such swaps; and (ii) publicly reportable 

swap transactions that do not have 

established appropriate minimum block 

sizes. The Commission anticipates there 

will be technology costs associated with 

ensuring that the correct time delay is 

applied to a swap that is publicly 

disseminated by the SDR, including the 

cost to an SDR in holding swap data 

until the appropriate time delay expires 

and costs associated with adjusting the 

time delay in accordance with § 43.5. In 

an effort to mitigate these costs, the 

Commission is phasing in the time 

delays for public dissemination. These 

time delays will reduce the potential for 

lost market liquidity by providing 

market participants adequate time to 

hedge prior to public dissemination. 

The Commission believes the phasing in 

of shorter time delays will support posttrade transparency in the swaps markets 

and will preserve market liquidity while 

enabling market participants to adjust 

trading strategies. 

Commenters offered numerous 

suggestions with respect to time delays 

for particular asset classes.520 However, 

the Commission does not believe that 

the direct costs associated with the 

various suggestions would be 

quantitatively significant (i.e., all the 

suggested time delays would require 

technological systems and operating 

systems). The Commission chose the 

time delays and phase in schedule 

adopted herein because it finds the 

approach reasonable in ensuring that all 

relevant swap data is eventually 

publicly disseminated, while 

minimizing the burden on the industry 

at the outset. 

How the Data Is To Be Reported (i.e., 

Coordinate Universal Time and Data 

Fields) 

Commenters suggested that the value 

derived from moving the industry to 

Coordinate Universal Time (‘‘UTC’’) 

appears minimal when compared to the 

costs involved.521 Notwithstanding the 

comments regarding costs of requiring 

UTC, the Commission anticipates that 

the move to UTC will better facilitate 

the efficient dissemination of pricing 

data by eliminating the need to conduct 

time conversions. The Commission 

notes that use of UTC in the part 43 

rules refers only to the execution 

timestamp that is publicly 

disseminated.522 Consistency across the 

global swaps market is an important 

goal, and the Commission believes that 

requiring UTC will allow market 

participants and reporting parties to 

recreate the order of trades, reduce 

fragmentation and reduce the need for 

market participants to convert different 

transaction times to understand the 

order of trades in a particular market. 

Commenters requested that the data 

fields required to be reported for offfacility swaps pursuant to part 43 be the 

same data fields that end-users typically 

record in their spreadsheets or trade 

capture systems.523 The Commission 

believes all the applicable data fields 

listed in Appendix A to part 43 are 

necessary to enhance price discovery by 

giving context and meaning to the price 

and volume information required to be 

publicly disseminated. The data 

recorded in end-user spreadsheets and 

trade capture systems typically are not 

sufficiently comprehensive for purposes 

of providing enhanced price discovery. 

However, the Commission has reduced 

the costs of reporting by coordinating 

the data fields in Appendix A to part 43 

with those data fields that are expected 

to be required in part 45 for regulatory 

reporting. This coordination is expected 

to reduce costs by allowing reporting 

parties, SEFs and DCMs to send one set 

of data to an SDR for the purpose of 

satisfying the requirements of both 

rules. 

Phasing of Compliance 

In response to commenters’ requests 

for a phased in implementation of the 

part 43 real-time reporting 

requirements,524 the Commission is 

adopting a three-phase schedule for 

compliance with part 43, in addition to 

several other phase in procedures, 

including the phasing in of time delays 

for public dissemination. The 

compliance schedule and additional 

phase in procedures will ensure 

efficient compliance with part 43 while 

considering the costs of implementation 

to market participants, registered 

entities and the public. In developing 

the part 43 compliance schedule and 

time delays for public dissemination, 

the Commission considered the 

different market characteristics of swap 

products and asset classes, differences 

in market participants and available 

technology and infrastructure. 

Accordingly, the Commission provides 

less developed markets and less 

sophisticated market participants longer 

lead time for compliance and public 

dissemination. 

C. Reporting and Public Dissemination 

in Light of CEA Section 15(a) 

As noted above, CEA section 15(a) 

directs the Commission to consider 

particular criteria in evaluating the costs 

and benefits of a particular Commission 

action. These are considered below. 

1. Protection of Market Participants and 

the Public 

The reporting and public 

dissemination requirements described 

in part 43 will provide transparency and 

enhanced price discovery in the swaps 

market. The Commission anticipates 

that the increase in transparency will 

lead to greater competition for swap 

market participants’ business and will 

increase liquidity in the swaps markets. 

Accordingly, the Commission 

anticipates that compliance by market 

participants and registered entities with 

part 43’s reporting and public 

dissemination requirements will lower 

the cost of commodities, goods and 

services to American businesses. This, 

in turn, will support the overall 

economy and the general public. 

In deciding the manner in which to 

facilitate real-time reporting, the 

Commission was cognizant of how the 

current swap market operates. Thus, for 

example, the reporting requirements 

remain flexible to account for 

differences among market participants, 

including differences based on asset 

class, sophistication of swap 


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525The Commission has indicated that it will 

address the public dissemination of such ‘‘other 

commodity’’ swaps in a forthcoming Commission 

release. 

526The Commission has identified no impact to 

the financial integrity of futures markets from part 

43 in its consideration of CEA section 15(a)(2)(B). 

Although by its terms CEA section 

15(a)(2)(B).applies to futures, not swaps, the 

Commission finds this factor useful in analyzing the 

costs and benefits of swaps regulations as well. 

527However, as the Commission has noted 

previously, nothing would prevent a SEF or DCM 

from contracting with a third party to assist with 

reporting the real-time swap transaction and pricing 

data to an SDR. 

counterparties and differences based on 

the methods of execution. Section 43.2 

provides a flexible definition of ‘‘as 

soon as technologically practicable’’ that 

would enable certain market 

participants, such as non-financial endusers, longer time periods for the 

reporting of swap transaction and 

pricing data to an SDR as compared to 

reporting parties with greater 

technological reporting capabilities (e.g., 

swap dealers). Further, the definition of 

‘‘as soon as technologically practicable’’ 

aims to ensure that similarly situated 

market participants are subject to the 

same standards. 

The Commission believes that certain 

swaps in the ‘‘other commodity’’ asset 

class require further analysis before 

requiring public dissemination of such 

swaps. Therefore, § 43.4(d) does not 

subject certain swaps in the ‘‘other 

commodity’’ asset class to part 43 

requirements at this time.525

The Commission also believes that the 

rounding convention and notional caps 

that an SDR must apply on the publicly 

disseminated notional or principal 

amount will enable market participants 

to effectively hedge risk without 

disclosing the actual size of the trade to 

the market. Such provisions will further 

protect the identities of parties, business 

transactions and market positions of 

market participants. Additionally, the 

Commission is providing time delays in 

§ 43.5 which will protect market 

participants by enabling them to enter 

into swaps with limited concern about 

other market participants trading ahead 

of such information. 

The definition of ‘‘publicly reportable 

swap transaction’’ in § 43.2 does not 

require that certain swaps that are not 

executed at arm’s length be reported to 

an SDR for public dissemination. The 

Commission believes that public 

dissemination of swaps between 

affiliates may reveal the identities of the 

parties or disclose information about the 

business transactions or market 

positions of market participants. By not 

requiring the reporting and public 

dissemination of such transactions, the 

Commission is further protecting market 

participants who may engage in swaps 

between affiliates. 

The Commission also believes that the 

data fields in appendix A to part 43 will 

provide market participants and the 

public with the ability to analyze the 

data for similar swaps while adequately 

protecting the identities of market 

participants. The data fields do not 

require identifying information to be 

publicly disseminated and the 

Commission believes that the 

‘‘Additional Price Notation,’’ 

‘‘Indication of Other Price Affecting 

Term’’ and ‘‘Indication of 

Collateralization’’ data fields, among 

others, will enable market participants 

and the public to more easily compare 

bespoke transactions to standardized 

transactions thereby enhancing the 

usefulness of such data for market 

participants and the public. 

2. Efficiency, Competitiveness and 

Financial Integrity of Markets 526

The Commission believes that part 43 

promotes market efficiency in a number 

of respects, including: 

• Reduced trading cost potential. As 

discussed above, the Commission 

anticipates that, similar to the reduction 

in corporate bond market trading costs 

following the implementation of 

TRACE, the requirements of part 43 will 

likely result in reduced trading costs 

and the lowering of economic rents 

earned by dealers in swaps markets. 

• Straight-through processing. 

Sections 43.3(a)(2) and 43.3(b)(1) 

establish a streamlined, straight-through 

process for SEFs and DCMs to utilize 

their technological expertise and ability 

to report swap transaction and pricing 

data ‘‘as soon as technologically 

practicable’’ to an SDR. The 

Commission believes this is the more 

efficient approach compared to 

alternatives that would interpose an 

intermediary in the data reporting 

chain.527

• Assignment of off-facility swap 

reporting responsibilities to the 

presumptively more capable party. 

Section 43.3(a)(3) establishes a protocol 

that assigns greater reporting 

responsibility to counterparty categories 

presumed to possess greater 

technological capabilities and resources 

as a result of their likely greater swap 

transaction volume. For example, unless 

otherwise agreed to by the swap 

counterparties, SDs (and MSPs) are 

required to serve as the reporting party 

for off-facility swaps. The Commission 

believes responsibility assignment on 

this basis increases the potential to 

realize reporting scale economies. 

• Choice of SDRs for real-time data 

dissemination. The Commission 

believes that § 43.3(a)(1)’s designation of 

SDRs to receive real-time swap 

transaction and pricing data ‘‘as soon as 

technologically practicable’’ for public 

dissemination also promotes potential 

scale economy efficiencies. Under the 

proposed part 45 rules, reporting 

parties, SEFs and DCMs must transmit 

a separate set of data to SDRs for 

regulatory reporting purposes. 

Accordingly, § 43.3(a)(1) may 

accommodate SEFs’ and DCMs’ ability 

to utilize technology and connections 

with an SDR for both real-time and 

regulatory reporting purposes. 

• Reduction of data fragmentation. 

The Commission believes that exercise 

of its authority under CEA section 

2(a)(13)(D) to designate SDRs as the 

public disseminators of real-time 

reported swap transaction and pricing 

data will reduce fragmentation of swap 

data available to the public. Greater data 

consistency, in turn, will facilitate the 

ability of market participants, and the 

public generally, to efficiently access, 

interpret, and compile a complete data 

set. 

The Commission believes that part 43 

promotes market competitiveness in a 

number of respects: 

• Reduction of data fragmentation. 

As noted above, the Commission 

believes that exercise of its CEA section 

2(a)(13)(D) authority to designate SDRs 

as the public disseminators of real-time 

reported swap transaction and pricing 

data will reduce fragmentation of swap 

data available to the public. Greater data 

consistency, in turn, should guard 

against information asymmetries that 

market participants with superior 

knowledge of, or access to, might 

arbitrage for competitive advantage. 

• Front running prevention via SDR 

continuous receipt requirements. 

Sections 43.3(f) and (g) require that 

SDRs be able to accept real-time swap 

transaction and pricing data for public 

dissemination at all times, including 

during closing hours. Specifically, 

§ 43.3(g) provides that during closing 

hours real-time swap transaction and 

pricing data that is accepted by an SDR 

be held in queue. As a result, these 

provisions enable continuous reporting 

of real-time swap transaction and 

pricing data by reporting parties, SEFs 

and DCMs, notwithstanding reporting 

party or registered entity location and 

time zone. In so doing, the Commission 

believes the rules promote swaps market 

competitiveness by foreclosing avenues 

for market participants to arbitrage 

reporting by execution location for 

competitive advantage. 


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528See supra, section II.E (‘‘Time Delays for 

Public Dissemination of Swap Transaction and 

Pricing Data’’). 

529That is: ‘‘real-time public reporting means to 

report data relating to a swap transaction, including 

price and volume, as soon as technologically 

practicable after the time at which the swap 

transaction has been executed.’’ 530See, e.g., CL–Chesapeake; CL–ATA. 

• Time delay regime that protects 

market liquidity and prevents frontrunning. The Commission believes that 

the time delay regime established in 

§ 43.5 will enhance the competitiveness 

of swap markets by protecting market 

liquidity until appropriate minimum 

block sizes are adopted. Such time 

delays, which initially apply until a 

swap or group of swaps has an 

appropriate minimum block size, reduce 

the risk of large notional trade data 

being exposed to the market before the 

trade can be adequately hedged (e.g., 

front-running or trading ahead).528

The Commission believes that part 43 

promotes market integrity in a number 

of respects: 

• Error correction. Section 43.3(e) 

provides reporting parties and SDRs 

with a clear process for addressing 

errors in real-time swap transaction and 

pricing data. These provisions will 

foster financial market integrity by 

ensuring that incorrectly disseminated 

swap transaction and pricing data is 

canceled and/or corrected. Further, this 

section gives the Commission 

enforcement powers, enhancing the 

Commission’s ability to police market 

integrity. 

• Time delay phase in to prevent 

front-running. The Commission believes 

that the phase in regime for time delays 

prescribed in § 43.5, discussed above, 

will counter the possibility for frontrunning large block trades before they 

can be adequately hedged. 

• SDR tools to ensure data accuracy. 

Section 43.4(c) enables SDRs to ensure 

that they receive the data necessary to 

process and publicly disseminate the 

data fields described in appendix A to 

part 43. Section 43.4(c) provides that 

SDRs can ask reporting parties for 

additional data to ensure the accuracy of 

the real-time data (compared to 

regulatory data) as well as to ensure that 

the data is being reported in a timely 

manner. Such provisions will improve 

the integrity of the real-time reporting 

process by allowing SDRs an additional 

opportunity to ensure the accuracy of 

the data they received for public 

dissemination purposes. 

3. Price Discovery 

The Commission believes generally 

that swaps market price discovery will 

be enhanced by making useful, accurate 

swaps transaction price and volume 

data available to market participants 

and the public within the shortest time 

frame possible. The Commission further 

believes that the reporting and public 

dissemination requirements of part 43, 

working in concert, promote the goal of 

swaps market price discovery 

enhancement. The components that 

contribute to the attainment of this goal 

are described below. 

• The provisions in part 43, reflecting 

the mandate of CEA section 

2(a)(13)(A),529 generally require that 

reporting of real-time data by reporting 

parties—SEFs and DCMs and public 

dissemination by SDRs—occur ‘‘as soon 

as technologically practicable.’’ The 

Commission believes that this approach 

means that swap transaction and pricing 

data is to be publicly disseminated at 

the fastest rate allowable given a market 

participant’s technological capability. 

• The error correction provisions of 

§ 43.3(e) assign swap counterparties and 

registered entities responsibility to 

correct erroneous or omitted swap data 

and require the public dissemination of 

cancellations and corrections to errors 

and omissions. These provisions will 

help ensure the accuracy of swap 

transaction and pricing data, thereby 

increasing the data’s price discovery 

value to market participants and the 

public. Absent this provision, 

uncorrected erroneous data could 

distort price discovery. 

• Appendix A to part 43 specifies the 

data fields an SDR must use in public 

dissemination, and what each data field 

represents. The Commission believes 

that the values assigned to the data 

fields are appropriately tailored to 

facilitate price transparency and inform 

price discovery. Moreover, data field 

consistency will enhance price 

discovery by ensuring the integrity of 

the price and volume reflected in a 

particular reported asset class. 

• The definition of ‘‘publicly 

reportable swap transaction’’ in § 43.2 

does not, at this time, require the public 

dissemination of swaps that are not 

executed at arm’s length. Accordingly, 

certain swaps between affiliates of a 

corporate group and portfolio 

compression exercises are not subject to 

part 43. The Commission believes that 

not requiring such transactions to be 

publicly disseminated precludes the 

public dissemination of transaction and 

pricing data that could misinform the 

market and create an inaccurate 

appearance of market depth. 

• Swap transaction and pricing data 

is to be publicly disseminated in a 

consistent, usable and machine-readable 

electronic format that allows the data to 

be downloaded, saved and analyzed, as 

described in § 43.3(d)(1). 

• SDRs are required pursuant to 

§ 43.3(f) to continuously accept and 

publicly disseminate swap transaction 

and pricing data (with the exception of 

certain closing hours). The Commission 

believes this requirement enhances the 

breadth of the swap data available and 

the speed at which such data is 

available to market participants and the 

public. 

• The requirements of §§ 43.4(d)(3) 

and (4), require the public 

dissemination of data that identifies the 

underlying asset for the transaction, 

except with respect to certain swaps in 

the ‘‘other commodity’’ asset class 

where dissemination could compromise 

anonymity. 

• The rounding convention and the 

caps on the publicly disseminated 

notional or principal amounts provided 

for in §§ 43.4(g) and (h) allow for price 

discovery for market participants and 

the public while protecting swap 

counterparty anonymity. 

4. Sound Risk Management Practices 

The Commission believes that the 

enhanced price discovery afforded by 

reporting and public dissemination of 

swap transaction and pricing data will 

better enable market participants to 

measure risk. Accordingly, because 

market participants will be better able to 

manage their risk at an entity level, risk 

will be better managed. Allowing 

market participants and the public to 

measure risk will reduce the risk of 

another financial crisis. 

Additionally, the Commission is not 

requiring that portfolio compression 

exercises, which market participants use 

for risk management purposes, be 

subject to part 43 at this time. In so 

doing, the Commission is attempting to 

tailor real-time public dissemination 

requirements to accommodate, rather 

than chill, prudent risk management by 

market participants. 

Finally, commenters asserted that the 

costs of risk management to end-users 

may increase if data relating to large 

sized trades is publicly disseminated to 

the market before swap counterparties 

have an opportunity to hedge a publicly 

reportable swap transaction.530 The 

Commission believes that the provisions 

in § 43.5 provide for adequate time 

delays for public dissemination of swap 

transaction and pricing data, providing 

end-users and other market participants 

the latitude necessary to manage their 

risks. 


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531 In other words, when an end-user has a 

reporting obligation because it engaged in an offfacility swap, the end-user is not required to 

timestamp the data pursuant to § 43.3(h). However, 

the execution timestamps in appendix A to part 43 

must be performed. 

532This is swap transaction and pricing data 

associated with ‘‘publicly reportable swap 

transactions.’’ 

533However, end-users must still submit a 

timestamp of the execution time if they are the 

reporting party to a swap. 

534See supra, note 526. 535 5 U.S.C. 601 et seq. 536 5 U.S.C. 601(2), 603, 604 and 605. 

5. Other Public Interest Considerations 

The Commission does not believe that 

the public dissemination requirements 

of part 43 discussed above will have a 

material effect on public interest 

considerations other than those 

previously identified. 

D. Recordkeeping and Timestamping 

Requirements of Part 43 

Proposed § 43.3(i) provided 

recordkeeping requirements for data 

related to part 43, including a general 

provision that all data relating to a 

‘‘reportable swap transaction’’ shall be 

maintained for a period of not less than 

five years after public dissemination of 

such swap. The provision also provided 

specific provision for the retention of 

data by a SEF or DCM and a provision 

for the retention of data by an SD or 

MSP. Further, proposed § 43.5(f) 

provided timestamp requirements for 

block trades and large notional swaps, 

which included a requirement to 

maintain records of all timestamps. 

Upon consideration of the comments 

received and as discussed elsewhere in 

this rulemaking, the utility of the 

Commission’s existing regulations in 

achieving the regulatory objective 

proposed, and the recordkeeping 

requirements proposed elsewhere, 

including part 45, the Commission 

significantly limited the recordkeeping 

requirements of proposed Part 43. The 

only recordkeeping requirements 

imposed will be the timestamping 

requirements as described in § 43.3(h). 

Section 43.3(h) timestamps are 

required for all publicly reportable swap 

transactions and must be applied by 

SEFs and DCMs, SDRs, and registrants 

(SDs and MSPs). In consideration of a 

commenter’s concerns regarding the 

costs to end-users to comply with any 

recordkeeping requirements, § 43.3(h) is 

not applicable to non-SDs/MSPs.531

The Commission received multiple 

comments addressing the timestamping 

requirements of proposed § 43.5(f). As 

proposed, the timestamping 

requirements would have applied only 

to swaps considered ‘‘block trades.’’ 

However, the Commission believes that 

there is a need for SEFs, DCMs, SDRs 

SDs and MSPs to record and maintain 

certain timestamps regarding the 

transmission and dissemination of all 

real-time swap transaction and pricing 

data,532 notwithstanding that proposed 

§ 43.5(f)’s timestamping requirement is 

inconsistent with current industry 

practice. 

1. Benefits of the Recordkeeping and 

Timestamping Requirements 

The Commission believes a timestamp 

remains necessary for two reasons: (1) It 

establishes an audit trail that serves 

enforcement purposes; and (2) it allows 

market participants and the public to recreate the trading day, thereby 

enhancing price discovery. Accordingly, 

the Commission is adopting in § 43.3(h) 

timestamp requirements for all 

reportable swap transactions. However, 

in response to commenters’ concerns 

about the costs of timestamping and 

retaining records for non-SDs/MSPs, the 

Commission is not requiring non-SDs/ 

non-MSPs who engage in an off-facility 

swap to retain similar timestamp.533

The Commission believes that requiring 

non-SDs/MSPs to retain any timestamp 

other than the execution timestamp 

would be unduly burdensome to those 

parties. 

2. Costs of the Recordkeeping and 

Timestamping Requirements 

The Commission has not identified 

quantifiable costs of timestamping that 

are not associated with an information 

collection subject to the PRA. These 

costs therefore have been accounted for 

in the PRA section of this rulemaking 

and the information collection requests 

filed with OMB, as required by the PRA. 

E. Recordkeeping and Timestamping 

Requirements in Light of CEA Section 

15(a) 

1. Protection of Market Participants and 

the Public 

The Commission believes that the 

timestamp requirement of § 43.3(h) will 

enable the Commission to ensure that 

reporting parties, SEFs and DCMs are 

reporting and that SDRs are publicly 

disseminating swap transaction and 

pricing data ‘‘as soon as technologically 

practicable.’’ Absent a timestamp 

requirement, the Commission would be 

unable to create an audit trail to identify 

potential inadequacies in reporting and 

public dissemination. The 

Commission’s oversight to ensure that 

similarly situated SD, MSPs, SEFs and 

DCMs are reporting in the same 

timeframes, and that SDRs are publicly 

disseminating in the same manner, is 

essential to protecting market 

participants and the public. 

2. Efficiency, Competitiveness and 

Financial Integrity of Markets 534

The Commission believes that the 

requirement to maintain timestamps 

will enable it to ensure the integrity of 

the data being disseminated. This in 

turn promotes the operational 

efficiency, competitiveness, and 

integrity of the swaps market to which 

the data pertains. Further, it provides a 

basis for the Commission to perform 

audit trail and compliance reviews with 

respect to SDs, MSPs, SEFs, DCMs and 

SDRs, thus bolstering the positive 

market benefits. 

3. Price Discovery 

The Commission believes that the 

requirement to maintain timestamps 

will promote price discovery in an 

important way. By providing a means 

for the Commission to ensure that SDs, 

MSPs, SEFs, DCMs and SDRs are 

reporting and publicly disseminating 

swap transaction and pricing data ‘‘as 

soon as technologically practicable,’’ 

timestamp information will promote 

price discovery because non-compliance 

will be readily detectable through 

timestamps and may be an effective 

enforcement tool in an enforcement 

action. 

4. Sound Risk Management Practices 

The Commission believes that the 

requirement for SDs, MSPs, SEFs, DCMs 

and SDRs to maintain the timestamps 

described in § 43.3(h) will become part 

of these entities’ risk management 

policies and procedures in an effort to 

ensure compliance with the part 43 

rules. 

5. Other Public Interest Considerations 

The Commission does not believe that 

the timestamp recordkeeping 

requirements of part 43 discussed above 

will have a material effect on public 

interest considerations other than those 

identified above. 

VI. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(‘‘RFA’’) requires Federal agencies to 

consider the impact of its rules on 

‘‘small entities.’’ 535 A regulatory 

flexibility analysis or certification 

typically is required for ‘‘any rule for 

which the agency publishes a general 

notice of proposed rulemaking pursuant 

to’’ the notice-and-comment provisions 

of the Administrative Procedure Act, 5 

U.S.C. 553(b).536


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537See 75 FR at 76170. 

538 Id. 

539 Id. 

540See CL–NFPEUU. 

541 7 U.S.C. 2(e). 

542See ‘‘Report of the President’s Working Group 

on Financial Markets’’ (Nov. 1999) at 16 

(recommending that ‘‘sophisticated counterparties 

that use OTC derivatives simply do not require the 

same protections under the CEA as those required 

by retail investors’’); H.R. Rep. No. 106–711 pt. 1, 

at 28 (2000) (Committee on Agriculture reporting 

that the CFMA ‘‘implements the PWG 

recommendations,’’ including the exclusion for 

‘‘bilateral swap agreements entered into by eligible 

parties (large and/or sophisticated) and done on a 

principal-to-principal basis)); and H.R. Rep. No. 

106–711 pt. 2, at 212 (2000) (statement of 

Representative John J. LaFalce, providing that the 

‘‘rationale * * * is that swaps can be complex 

instruments requiring a variety of protections for 

financially unsophisticated consumers [and] come 

in a great variety of tailored obligations, some of 

which might, indeed, be so complex as to be 

inappropriate for all but the most seasoned of 

investors’’). 

543Compare section 1a(12) of the CEA, 7 U.S.C. 

1a(12) (2009), with sections 721(a)(1) and (9) of the 

Dodd-Frank Act, respectively redesignating section 

1a(12) as section 1a(18) and increasing thresholds 

for certain categories of ECP. 

With respect to the proposed real-time 

public reporting rule, the Commission 

provided in its RFA statement that the 

proposed rule would have a direct effect 

on numerous entities, specifically 

DCMs, SDRs, SEFs, SDs, MSPs, and 

certain single end-users.537 In the 

proposal, the Chairman, on behalf of the 

Commission, certified that the 

rulemaking would not have a significant 

economic effect on a substantial number 

of small entities. Comments on that 

certification were sought. 

In the Proposing Release, the 

Commission then provided that it 

previously had established that certain 

entities subject to its jurisdiction are not 

small entities for purposes of the RFA. 

Because of the central role they play in 

the regulatory scheme concerning 

futures trading, the importance of 

futures trading in the national economy, 

and the financial requirements needed 

to comply with the regulatory 

requirements imposed on them under 

the CEA, DCMs have long been 

determined not to be not small 

entities.538

The Commission also provided that 

certain entities that would be subject to 

the proposed rule—namely SDRs, SEFs, 

SDs, and MSPs—are entities for which 

the Commission had not previously 

made a size determination for RFA 

purposes. It proposed that these entities 

should not be considered to be small 

entities based upon their size and other 

characteristics.539

Finally, the Commission recognized 

that the proposed rule could have an 

economic effect on certain single end 

users, in particular those end users that 

enter into swap transactions with 

another end-user. Unlike the other 

parties to which the proposed 

rulemaking would apply, these end 

users are not subject to designation or 

registration with or to comprehensive 

regulation by the Commission. The 

Commission recognized that some of 

these end users may be small entities. 

Notwithstanding that some small 

entities may be subject to the real-time 

reporting rules, the determination to 

certify pursuant to section 605(b) of the 

RFA that the proposed rule would not 

have a significant economic effect on a 

substantial number of small entities was 

based upon the nature of the reporting 

hierarchy that was set forth in the 

proposal. The proposed rule was 

structured so that most swaps that are 

expected to be executed by an end user 

would not be required to be reported by 

the end user, but rather by a party that 

is subject to Commission registration 

and regulation. 

The reporting obligations primarily 

would fall on the trading facility on 

which an end-user executes a swap or, 

in the case of a swap executed ‘‘offfacility’’ with an SD or MSP, on the SD 

or MSP. Under the proposed rules, end 

users would only be required to report 

swaps that are executed ‘‘off-facility’’ 

with another end user, and in such 

circumstances, only one of the end users 

subject to the transaction would be 

required to report. 

The Commission received one 

comment respecting its RFA 

certification. An association of not-forprofit electric end users provided that 

its membership includes small entities 

as that term is defined in the RFA.540

The association commented that the 

Commission should conduct a 

regulatory flexibility analysis for each of 

its rulemakings individually, as well as 

a regulatory flexibility analysis for all of 

its rulemakings on a cumulative basis. 

The association supported its comment 

by providing that ‘‘[e]ach of the complex 

and interrelated regulations currently 

being proposed by the Commission has 

both an individual, and a cumulative, 

effect on such small entities.’’ 

Though the association asserted that 

some of its members are small, it did not 

provide any factual support to indicate 

that the proposed real-time reporting 

rule would have a significant economic 

effect on a substantial number of small 

entities, contrary to the Commission’s 

certification. Nonetheless, in light of the 

association’s comments, the 

Commission has given further 

consideration to the reporting hierarchy 

that was proposed. 

Critically, as noted above, the 

reporting hierarchy was established in 

order to ensure that any end users that 

may be required to comply with these 

real-time reporting rules would only 

have to do so with respect to 

transactions that are not conducted on 

or pursuant to the rules of a DCM or SEF 

or with a counterparty that is registered 

with and regulated by the Commission. 

Moreover, as the CEA as amended by 

the Dodd-Frank Act provides, most of 

the end users who will transact with 

each other ‘‘off-facility’’, are not 

expected to be small entities. 

Section 2(e) of the CEA was amended 

to provide that ‘‘it shall be unlawful for 

any person, other than an eligible 

contract participant, to enter into a swap 

unless the swap is entered into on, or 

subject to the rules of [a regulated 

trading venue].’’ 541 Eligible Contract 

Participants (‘‘ECPs’’) were first defined 

in section 1a(12) of the CEA in the 

Commodity Futures Modernization Act 

(‘‘CFMA’’) in 2000, creating a category 

of individuals and entities that Congress 

determined to be sufficiently 

sophisticated in financial matters that 

they should be permitted to trade overthe-counter swaps without the 

protection of federal regulation.542 In 

the Dodd-Frank Act, Congress made two 

changes to the statutory ECP definition, 

both of which increased the thresholds 

to qualify as an ECP, making it harder 

for some entities and individuals to 

qualify.543 Thus, only entities that reach 

a significant level of financial resources 

or sophistication are eligible to transact 

in swaps ‘‘off-facility.’’ 

We understand from the association’s 

comments that some of their members 

who qualify as ECPs under the CEA 

have been determined to be ‘‘small 

entities’’ by the SBA. A member will be 

an SBA small entity if its total electric 

output for the preceding fiscal year did 

not exceed four million megawatt hours. 

Notwithstanding that some members 

that are ECPs may fall within the SBA 

small entity determination, the 

Commission understands this to be an 

anomaly. As a general rule, there are 

few small entities that will be eligible to 

transact in swaps ‘‘off-facility’’ under 

the CEA in light of the financial 

resource and sophistication thresholds 

established in the ECP definition. 

Accordingly, for the reasons stated in 

the proposal and foregoing discussion in 

response to the comments received from 

the association, the Commission 

continues to believe that the rulemaking 

will not have a significant impact on a 

substantial number of small entities. 

Therefore, the Chairman, on behalf of 

the Commission, hereby certifies, 

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


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1242 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Rules and Regulations 

real-time reporting requirements being 

adopted herein will not have a 

significant economic impact on a 

substantial number of small entities. 

VII. List of Commenters 

1. Markit 

2. Asset Management Group of the 

Securities Industry and Financial 

Markets Association (‘‘SIFMA 

AMG’’) 

3. Managed Funds Association (‘‘MFA’’) 

4. Lawrence Schultz 

5. The Energy Authority 

6. Argus Media, Inc. (‘‘Argus’’) 

7. Professor Darrell Duffie, Stanford 

University (‘‘Darrell Duffie’’) 

8. Chesapeake Energy Corporation 

(‘‘Chesapeake’’) 

9. Members of Congress of the United 

States (House Committee on 

Financial Services—Congressman 

Spencer Bachus and Congressman 

Frank Lucas) (‘‘Members of 

Congress’’) 

10. Barclays Bank PLC, BNP Paribas 

S.A., Deutsche Bank AG, Royal 

Bank of Canada, The Royal Bank of 

Scotland Group PLC, Socie ́te ́

Ge ́ne ́rale, UBS AG (‘‘ Seven Foreign 

Headquartered Banks’’) 

11. J.P. Morgan (‘‘JPM’’) 

12. Gibson Dunn on behalf of the 

Coalition for Derivatives End-Users 

(‘‘Coalition for Derivatives EndUsers’’) 

13. Committee on Capital Markets 

Regulation 

14. Goldman Sachs & Co. (‘‘GS’’) 

15. Not-For-Profit Energy End-User 

Coalition (‘‘NFPEEU’’) 

16. Barclays Capital, Inc. (‘‘Barclays’’) 

17. Air Transport Association (‘‘ATA’’) 

18. Pacific Investment Management 

Company, LLC (‘‘PIMCO’’) 

19. Committee on the Investment of 

Employee Benefit Assets & 

American Benefits Council (‘‘ABC/ 

CIEBA’’) 

20. Commodity Markets Council 

(‘‘CMC’’) 

21. Better Markets, Inc. (‘‘Better 

Markets’’) 

22. Investment Company Institute 

(‘‘ICI’’) 

23. Intercontinental Exchange, Inc. 

(‘‘ICE’’) 

24. MarkitSERV 

25. Coalition of Physical Energy 

Companies (‘‘COPE’’) 

26. International Options Markets 

Association/World Federation of 

Exchanges (‘‘WFE/IOMA’’) 

27. UBS Securities LLC (‘‘UBS’’) 

28. Global Foreign Exchange Division of 

Association for Financial Markets 

in Europe (‘‘AFME’’), the Securities 

Industry and Financial Markets 

Association (‘‘SIFMA’’) and the 

Asia Securities Industry and 

Financial Markets Association 

(‘‘ASIFMA’’) (collectively, ‘‘GFXD’’) 

29. Edison Electrical Institute (‘‘EEI’’) 

30. Encana Marketing (USA) Inc. 

(‘‘Encana’’) 

31. LCH.Clearnet Group Limited 

(‘‘LCH.Clearnet’’) 

32. CME Group, Inc. (‘‘CME’’) 

33. Tradeweb Markets LLC 

(‘‘Tradeweb’’) 

34. Coalition of Energy End-Users 

35. Federal National Mortgage 

Association (‘‘FNMA’’) 

36. Reval.com, Inc. (‘‘Reval’’) 

37. Independent Petroleum Association 

of America (‘‘IPAA’’) 

38. PCS Nitrogen Fertilizer, L.P. (‘‘PCS 

Nitrogen’’) 

39. International Swaps and Derivatives 

Association & Securities Industry 

and Financial Markets Association 

(‘‘ISDA/SIFMA’’) 

40. International Energy Credit 

Association (‘‘IE Credit 

Association’’) 

41. Morgan Stanley (‘‘MS’’) 

42. Hunton & Williams LLP on behalf of 

the Working Group of Commercial 

Energy Firms (‘‘Working Group of 

Commercial Energy Firms’’) 

43. Freddie Mac 

44. Financial Services Roundtable 

(‘‘FSR’’) 

45. Vanguard 

46. TriOptima 

47. BlackRock, Inc. (‘‘BlackRock’’) 

48. Dominion Resources, Inc. 

(‘‘Dominion’’) 

49. Sadis & Goldberg LLP (‘‘Sadis & 

Goldberg’’) 

50. Metlife, Inc. (‘‘Metlife’’) 

51. Federal Home Loan Banks 

(‘‘FHLBanks’’) 

52. Wholesale Markets Brokers’ 

Association, Americas (‘‘WMBAA’’) 

53. Depository Trust & Clearing 

Corporation (‘‘DTCC’’) 

54. Cleary Gottlieb 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, 

In., PNC Bank, National 

Association, Socie ́te ́ Ge ́ne ́rale, UBS 

Securities LLC, Wells Fargo & 

Company (‘‘Cleary’’) 

55. Barclays Bank PLC; BNP Paribas 

S.A.; Credit Suisse AG; Deutsche 

Bank AG; HSBC; Nomura Securities 

International, Inc.; Rabobank 

Nederland; Royal Bank of Canada; 

The Royal Bank of Scotland Group 

PLC; Socie ́te ́ Ge ́ne ́rale; The 

Toronto-Dominion Bank; UBS AG 

(‘‘12 Foreign Headquartered 

Financial Institutions’’) 

56. Financial Industry Regulatory 

Authority (‘‘FINRA’’) 

57. Socie ́te ́ Ge ́ne ́rale (‘‘Soc Gen’’) 

58. European Parliament Rapporteur for 

the Regulation on OTC Derivatives, 

Central Counterparties and Trade 

Repositories 

59. European Industry Representatives 

(Credit Suisse, Deutsche Bank, Citi, 

JP Morgan, Barclays, Goldman 

Sachs, UBS) 

60. Rabobank Nederland 

61. Insurance Groups (American 

Council of Life Insurers, Genworth, 

Manulife, John Hancock Life, New 

York Life, Northwestern Mutual, 

Prudential, MetLife, Allstate Life) 

(‘‘Insurance Groups’’) 

62. Fidelity Investments & Vanguard 

63. Credit Suisse 

64. ISDA & Kalorama Partners 

65. ISDA 

66. National Rural Electric Cooperative 

Association, American Public 

Power Association, Large Public 

Power Council, Edison Electric 

Institute, Electric Power Supply 

Association 

67. Futures Industry Association, 

Financial Services Forum, 

International Swaps and Derivatives 

Association, Securities Industry and 

Financial Markets Association 

(‘‘FIA/FSF/ISDA/SIFMA’’) 

68. The Bank of Tokyo-Mitsubishi UFJ, 

Ltd.; Mizuho Corporate Bank, Ltd.; 

Sumitomo Mitsui Banking 

Corporation (‘‘Japanese Banks’’) 

69. NextEra Energy, Inc. (‘‘NextEra’’) 

70. Chris Barnard 

71. Citi, Morgan Stanley, JP Morgan 

72. BP 

73. Industrial Energy Consumers of 

America (‘‘IE Consumers of 

America’’) 

74. Alice Corporation (‘‘Alice’’) 

75. Futures Industry Association, The 

Financial Services Roundtable, 

Institute of International Bankers, 

Insured Retirement Institute, 

International Swaps and Derivatives 

Association, Securities Industry and 

Financial Markets Association, U.S. 

Chamber of Commerce (‘‘FIA/FSR/ 

IIB/IRI/ISDA/SIFMA/Chamber’’) 

76. Association of Institutional Investors 

(‘‘AII’’) 

77. American Gas Association (‘‘AGA’’) 

78. Natural Gas Exchange, Inc. (‘‘NGX’’) 

79. Shell Trading (US) Company & Shell 

Energy North America (‘‘Shell’’) 

80. American Petroleum Institute 

(‘‘API’’) 

81. Swaps & Derivatives Market 

Association (‘‘SDMA’’) 

82. Jackson National Life Insurance 

(‘‘Jackson’’) 

83. Eris Exchange, LLC (‘‘Eris’’) 

84. Citadel LLC (‘‘Citadel’’) 


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85. American Bankers Association & 

ABA Securities Association (‘‘ABA/ 

ABASA’’) 

86. DC Energy, LLC (‘‘DC Energy’’) 

87. The Alternative Investment 

Management Association Ltd 

(‘‘AIMA’’) 

88. FXall 

List of Subjects in 17 CFR Part 43 

Real-time public reporting; Block 

trades; Large notional off-facility swaps; 

Reporting and recordkeeping 

requirements. 

In consideration of the foregoing, and 

pursuant to the authority in the 

Commodity Exchange Act, as amended, 

and in particular Section 2(a)(13) of the 

Act, the Commission hereby adopts an 

amendment to Chapter I of Title 17 of 

the Code of Federal Regulations by 

adding part 43 to read as follows: 

PART 43—REAL-TIME PUBLIC 

REPORTING 

Sec. 

43.1 Purpose, scope, and rules of 

construction. 

43.2 Definitions. 

43.3 Method and timing for real-time public 

reporting. 

43.4 Swap transaction and pricing data to 

be publicly disseminated in real-time. 

43.5 Time delays for public dissemination 

of swap transaction and pricing data. 

43.6 [Reserved] 

Appendix A to Part 43—Data Fields for 

Public Dissemination 

Appendix B to Part 43—Enumerated Physical 

Commodity Contracts and Other 

Contracts 

Appendix C to Part 43—Time Delays for 

Public Dissemination 

Authority: 7 U.S.C. 2(a), 12a(5) and 24a, 

as amended by Title VII of the Wall Street 

Reform and Consumer Protection Act, Pub. L. 

111–203, 124 Stat. 1376 (2010). 

§ 43.1 Purpose, scope, and rules of 

construction. 

(a) Purpose. This part implements 

rules relating to the reporting and public 

dissemination of certain swap 

transaction and pricing data to enhance 

transparency and price discovery 

pursuant to the Dodd-Frank Wall Street 

Reform and Consumer Protection Act of 

2010, Pub. L. 111–203, 124 Stat. 1376 

(2010). 

(b)(1) Scope. The provisions of this 

part shall apply to all swaps as defined 

in Section 1a(47) of the Act and any 

implementing regulations thereunder, 

including: 

(i) Swaps subject to the mandatory 

clearing requirement described in 

Section 2(h)(1) of the Act, including 

those swaps that are excepted from the 

requirement pursuant to Section 2(h)(7) 

of the Act; 

(ii) Swaps that are not subject to the 

mandatory clearing requirement 

described in Section 2(h)(1) of the Act, 

but are cleared at a registered 

derivatives clearing organization; 

(iii) Swaps that are not cleared at a 

registered derivatives clearing 

organization and are reported to a 

registered swap data repository that 

accepts and publicly disseminates swap 

transaction and pricing data in realtime; and 

(iv) Swaps that are required to be 

cleared under Section 2(h)(2) of the Act, 

but are not cleared. 

(2) This part also shall apply to 

registered entities as defined in the Act, 

as well as to parties to a swap including 

swap dealers, major swap participants 

and U.S.-based market participants in a 

manner as the Commission may 

determine. 

(c) Rules of construction. The 

examples in this part and in appendix 

A to this part are not exclusive. 

Compliance with a particular example 

or application of a sample clause, to the 

extent applicable, shall constitute 

compliance with the particular portion 

of the rule to which the example relates. 

(d) Severability. If any provision of 

this part, or the application thereof to 

any person or circumstance, is held 

invalid, such invalidity shall not affect 

other provisions or application of such 

provision to other persons or 

circumstances which can be given effect 

without the invalid provision or 

application. 

§ 43.2 Definitions. 

As used in this part: 

Act means the Commodity Exchange 

Act, as amended, 7 U.S.C. 1 et seq. 

Affirmation means the process by 

which parties to a swap verify (orally, 

in writing, electronically or otherwise) 

that they agree on the primary economic 

terms of a swap (but not necessarily all 

terms of the swap). Affirmation may 

constitute ‘‘execution’’ of the swap or 

may provide evidence of execution of 

the swap, but does not constitute 

confirmation (or confirmation by 

affirmation) of the swap. 

Appropriate minimum block size 

means the minimum notional or 

principal amount for a category of 

swaps that qualifies a swap within such 

category as a block trade or large 

notional off-facility swap. 

As soon as technologically practicable 

means as soon as possible, taking into 

consideration the prevalence, 

implementation and use of technology 

by comparable market participants. 

Asset class means a broad category of 

commodities including, without 

limitation, any ‘‘excluded commodity’’ 

as defined in Section 1a(19) of the Act, 

with common characteristics underlying 

a swap. The asset classes include 

interest rate, foreign exchange, credit, 

equity, other commodity and such other 

asset classes as may be determined by 

the Commission. 

Block trade means a publicly 

reportable swap transaction that: 

(1) Involves a swap that is listed on 

a registered swap execution facility or 

designated contract market; 

(2) Occurs away from the registered 

swap execution facility’s or designated 

contract market’s trading system or 

platform and is executed pursuant to the 

registered swap execution facility’s or 

designated contract market’s rules and 

procedures; 

(3) Has a notional or principal amount 

at or above the appropriate minimum 

block size applicable to such swap; and 

(4) Is reported subject to the rules and 

procedures of the registered swap 

execution facility or designated contract 

market and the rules described in this 

part, including the appropriate time 

delay requirements set forth in § 43.5 of 

this part. 

Business day means the twenty-four 

hour day, on all days except Saturdays, 

Sundays and legal holidays, in the 

location of the reporting party or 

registered entity reporting data for the 

swap. 

Business hours means the consecutive 

hours of one or more consecutive 

business days. 

Confirmation means the 

consummation (electronic or otherwise) 

of legally binding documentation 

(electronic or otherwise) that 

memorializes the agreement of the 

parties to all terms of a swap. A 

confirmation shall be in writing 

(electronic or otherwise) and shall 

legally supersede any previous 

agreement (electronic or otherwise) 

relating to the swap. 

Confirmation by affirmation means 

the process by which one party to a 

swap acknowledges its assent to the 

complete swap terms submitted by the 

other party to the swap. If the parties to 

a swap are using a confirmation service 

vendor, complete swap terms may be 

submitted electronically by a party to 

such vendor’s platform and the other 

party may affirm such terms on such 

platform. 

Embedded option means any right, 

but not an obligation, provided to one 

party of a swap by the other party to the 

swap that provides the party holding the 

option with the ability to change any 

one or more of the economic terms of 

the swap as those terms previously were 

established at confirmation (or were in 

effect on the start date). 


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Executed means the completion of the 

execution process. 

Execution means an agreement by the 

parties (whether orally, in writing, 

electronically, or otherwise) to the terms 

of a swap that legally binds the parties 

to such swap terms under applicable 

law. Execution occurs simultaneous 

with or immediately following the 

affirmation of the swap. 

Large notional off-facility swap means 

an off-facility swap that has a notional 

or principal amount at or above the 

appropriate minimum block size 

applicable to such publicly reportable 

swap transaction and is not a block 

trade as defined in § 43.2 of the 

Commission’s regulations. 

Novation means the process by which 

a party to a swap transfers all of its 

rights, liabilities, duties and obligations 

under the swap to a new legal party 

other than the counterparty to the swap. 

The transferee accepts all of the 

transferor’s rights, liabilities, duties and 

obligations under the swap. A novation 

is valid as long as the transferor and the 

remaining party to the swap are given 

notice, and the transferor, transferee and 

remaining party to the swap consent to 

the transfer. 

Off-facility swap means any publicly 

reportable swap transaction that is not 

executed on or pursuant to the rules of 

a registered swap execution facility or 

designated contract market. 

Other commodity means any 

commodity that is not categorized in the 

other asset classes as may be determined 

by the Commission. 

Public dissemination and publicly 

disseminate means 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. 

Publicly reportable swap transaction 

means: 

(1) Unless otherwise provided in this 

part— 

(i) Any executed swap that is an 

arm’s-length transaction between two 

parties that results in a corresponding 

change in the market risk position 

between the two parties; or 

(ii) Any termination, assignment, 

novation, exchange, transfer, 

amendment, conveyance, or 

extinguishing of rights or obligations of 

a swap that changes the pricing of the 

swap. 

(2) Examples of executed swaps that 

do not fall within the definition of 

publicly reportable swap may include: 

(i) Internal swaps between onehundred percent owned subsidiaries of 

the same parent entity; and 

(ii) Portfolio compression exercises. 

(3) These examples represent swaps 

that are not at arm’s length and thus are 

not publicly reportable swap 

transactions, notwithstanding that they 

do result in a corresponding change in 

the market risk position between two 

parties. 

Real-time public reporting means the 

reporting of data relating to a swap 

transaction, including price and 

volume, as soon as technologically 

practicable after the time at which the 

swap transaction has been executed. 

Remaining party means a party to a 

swap that consents to a transferor’s 

transfer by novation of all of the 

transferor’s rights, liabilities, duties and 

obligations under such swap to a 

transferee. 

Reporting party means the party to a 

swap with the duty to report a publicly 

reportable swap transaction in 

accordance with this part and section 

2(a)(13)(F) of the Act. 

Transferee means a party to a swap 

that accepts, by way of novation, all of 

a transferor’s rights, liabilities, duties 

and obligations under such swap with 

respect to a remaining party. 

Transferor means a party to a swap 

that transfers, by way of novation, all of 

its rights, liabilities, duties and 

obligations under such swap, with 

respect to a remaining party, to a 

transferee. 

Unique product identifier means a 

unique identification of a particular 

level of the taxonomy of the product in 

an asset class or sub-asset class in 

question, as further described in 

§ 43.4(f) and appendix A to this part. 

Such unique product identifier may 

combine the information from one or 

more of the data fields described in 

appendix A. 

Widely published means to publish 

and make available through electronic 

means in a manner that is freely 

available and readily accessible to the 

public. 

§ 43.3 Method and timing for real-time 

public reporting. 

(a) Responsibilities of parties to a 

swap to report swap transaction and 

pricing data in real-time—(1) In general. 

A reporting party shall report any 

publicly reportable swap transaction to 

a registered swap data repository as 

soon as technologically practicable after 

such publicly reportable swap 

transaction is executed. For purposes of 

this part, a registered swap data 

repository includes any swap data 

repository provisionally registered with 

the Commission pursuant to part 49 of 

this chapter. 

(2) Swaps executed on or pursuant to 

the rules of a registered swap execution 

facility or designated contract market. A 

party to a publicly reportable swap 

transaction shall satisfy its reporting 

requirement under this section by 

executing a publicly reportable swap 

transaction on or pursuant to the rules 

of a registered swap execution facility or 

designated contract market. 

(3) Off-facility swaps. All off-facility 

swaps shall be reported by the reporting 

party as soon as technologically 

practicable following execution, to a 

registered swap data repository for the 

appropriate asset class in accordance 

with the rules set forth in this part. 

Unless otherwise agreed to by the 

parties prior to the execution of the 

publicly reportable swap transaction, 

the following persons shall be reporting 

parties for off-facility swaps: 

(i) If only one party is a swap dealer 

or major swap participant, then the 

swap dealer or major swap participant 

shall be the reporting party; 

(ii) If one party is a swap dealer and 

the other party is a major swap 

participant, then the swap dealer shall 

be the reporting party; 

(iii) If both parties are swap dealers, 

then the swap dealers shall designate 

which party shall be the reporting party; 

(iv) If both parties are major swap 

participants, then the major swap 

participants shall designate which party 

shall be the reporting party; 

(v) If neither party is a swap dealer or 

a major swap participant, then the 

parties shall designate which party (or 

its agent) shall be the reporting party. 

(b) Public dissemination of swap 

transaction and pricing data—(1) 

Publicly reportable swap transactions 

executed on or pursuant to the rules of 

a registered swap execution facility or 

designated contract market. A registered 

swap execution facility or designated 

contract market shall satisfy the 

requirements of this subparagraph by 

transmitting swap transaction and 

pricing data to a registered swap data 

repository, as soon as technologically 

practicable after the publicly reportable 

swap transaction has been executed on 

or pursuant to the rules of such trading 

platform or facility. 

(2) Public dissemination of swap 

transaction and pricing data by 

registered swap data repositories. A 

registered swap data repository shall 

ensure that swap transaction and 

pricing data is publicly disseminated, as 

soon as technologically practicable after 

such data is received from a registered 

swap execution facility, designated 

contract market or reporting party, 

unless such publicly reportable swap 

transaction is subject to a time delay 

described in § 43.5 of this part, in which 

case the publicly reportable swap 


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transaction shall be publicly 

disseminated in the manner described 

in § 43.5. 

(3) Prohibitions on disclosure of data. 

(i) If there is a registered swap data 

repository for an asset class, a registered 

swap execution facility or designated 

contract market shall not disclose swap 

transaction and pricing data relating to 

publicly reportable swap transactions in 

such asset class, prior to the public 

dissemination of such data by a 

registered swap data repository unless: 

(A) Such disclosure is made no earlier 

than the transmittal of such data to a 

registered swap data repository for 

public dissemination; 

(B) Such disclosure is only made to 

market participants on such registered 

swap execution facility or designated 

contract market; 

(C) Market participants are provided 

advance notice of such disclosure; and 

(D) Any such disclosure by the 

registered swap execution facility or 

designated contract market is nondiscriminatory. 

(ii) If there is a registered swap data 

repository for an asset class, a swap 

dealer or major swap participant shall 

not disclose swap transaction and 

pricing data relating to publicly 

reportable swap transactions in such 

asset class, prior to the public 

dissemination of such data by a 

registered swap data repository unless: 

(A) Such disclosure is made no earlier 

than the transmittal of such data to a 

registered swap data repository for 

public dissemination; 

(B) Such disclosure is only made to 

the customer base of such swap dealer 

or major swap participant, including 

parties who maintain accounts with or 

have been swap counterparties with 

such swap dealer or major swap 

participant; 

(C) Swap counterparties are provided 

advance notice of such disclosure; and 

(D) Any such disclosure by the swap 

dealer or major swap participant is nondiscriminatory. 

(c) Requirements for registered swap 

data repositories in providing the public 

dissemination of swap transaction and 

pricing data in real-time—(1) 

Compliance with 17 CFR part 49. Any 

registered swap data repository that 

accepts and publicly disseminates swap 

transaction and pricing data in real-time 

shall comply with part 49 of this 

chapter and shall publicly disseminate 

swap transaction and pricing data in 

accordance with this part as soon as 

technologically practicable upon receipt 

of such data, except as otherwise 

provided in this part. 

(2) Acceptance and public 

dissemination of all swaps in an asset 

class. Any registered swap data 

repository that accepts and publicly 

disseminates swap transaction and 

pricing data in real-time for swaps in its 

selected asset class shall accept and 

publicly disseminate swap transaction 

and pricing data in real-time for all 

publicly reportable swap transactions 

within such asset class, unless 

otherwise prescribed by the 

Commission. 

(3) Annual independent review. Any 

registered swap data repository that 

accepts and publicly disseminates swap 

transaction and pricing data in real-time 

shall perform, on an annual basis, an 

independent review in accordance with 

established audit procedures and 

standards of the registered swap data 

repository’s security and other system 

controls for the purposes of ensuring 

compliance with the requirements in 

this part. 

(d) Availability of swap transaction 

and pricing data to the public. (1) 

Registered swap data repositories shall 

publicly disseminate swap transaction 

and pricing data in a consistent, usable 

and machine-readable electronic format 

that allows the data to be downloaded, 

saved and analyzed. 

(2) Data that is publicly disseminated 

pursuant to this part shall be available 

from an Internet Web site in a format 

that is freely available and readily 

accessible to the public. 

(3) Registered swap data repositories 

shall provide to the Commission a 

hyperlink to the Internet Web site where 

publicly disseminated swap transaction 

and pricing data can be accessed by the 

public. 

(e) Errors or omissions—(1) In general. 

Any errors or omissions in swap 

transaction and pricing data that were 

publicly disseminated in real-time shall 

be corrected or cancelled in the 

following manner: 

(i) If a party to the swap becomes 

aware of an error or omission in the 

swap transaction and pricing data 

reported with respect to such swap, 

such party shall promptly notify the 

other party of the error and/or 

correction. 

(ii) If a reporting party to a swap 

becomes aware of an error or omission 

in the swap transaction or pricing data 

which it reported to a registered swap 

data repository or which was reported 

by a registered swap execution facility 

or designated contract market with 

respect to such swap, either through its 

own initiative or through notice by the 

other party to the swap, the reporting 

party shall promptly submit corrected 

data to the same registered swap 

execution facility, designated contract 

market or registered swap data 

repository. 

(iii) If the registered swap execution 

facility or designated contract market 

becomes aware of an error or omission 

in the swap transaction or pricing data 

reported with respect to such swap, or 

receives notification from the reporting 

party, the registered swap execution 

facility or designated contract market 

shall promptly submit corrected data to 

the same registered swap data 

repository. 

(iv) Any registered swap data 

repository that accepts and publicly 

disseminates swap transaction and 

pricing data in real-time shall publicly 

disseminate any cancellations or 

corrections to such data, as soon as 

technologically practicable after receipt 

or discovery of any such cancellation or 

correction. 

(2) Improper cancellation or 

correction. Reporting parties, registered 

swap execution facilities, designated 

contract markets and registered swap 

data repositories shall not submit or 

agree to submit a cancellation or 

correction for the purpose of rereporting swap transaction and pricing 

data in order to gain or extend a delay 

in public dissemination of accurate 

swap transaction or pricing data or to 

otherwise evade the reporting 

requirements in this part. 

(3) Cancellation. A registered swap 

data repository shall cancel any 

incorrect data that had been publicly 

disseminated by publicly disseminating 

a cancellation of such data, as soon as 

technologically practicable, in the 

manner described in appendix A to this 

part. 

(4) Correction. A registered swap data 

repository shall correct any incorrect 

data that had been publicly 

disseminated by publicly disseminating 

a cancellation of the incorrect swap 

transaction and pricing data and then 

publicly disseminating the correct data, 

as soon as technologically practicable, 

in the manner described in appendix A 

to this part. 

(f) Hours of operation of registered 

swap data repositories. Unless 

otherwise provided in this subsection, a 

registered swap data repository shall 

have systems in place to continuously 

receive and publicly disseminate swap 

transaction and pricing data in real-time 

pursuant to this part. 

(1) A registered swap data repository 

may declare closing hours to perform 

system maintenance. 

(2) A registered swap data repository 

shall, to the extent reasonably possible, 

avoid scheduling closing hours when, in 

its estimation, the U.S. market and 

major foreign markets are most active. 


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(3) A registered swap data repository 

shall comply with the requirements 

under part 40 of this chapter in setting 

closing hours and shall provide advance 

notice of its closing hours to market 

participants and the public. 

(g) Acceptance of data during closing 

hours. During closing hours, a registered 

swap data repository shall have the 

capability to receive and hold in queue 

any data regarding publicly reportable 

swap transactions pursuant to this part. 

(1) Upon any reopening after closing 

hours, a registered swap data repository 

shall promptly and publicly disseminate 

the swap transaction and pricing data of 

swaps held in queue, in accordance 

with the requirements of this part. 

(2) If at any time during closing hours 

a registered swap data repository is 

unable to receive and hold in queue 

swap transaction and pricing data 

pursuant to this part, then the registered 

swap data repository shall immediately 

upon reopening issue notice that it has 

resumed normal operations. Any 

registered swap execution facility, 

designated contract market or reporting 

party that is obligated under this section 

to report data to the registered swap 

data repository shall report the data to 

the registered swap data repository 

immediately after receiving such notice. 

(h) Timestamp requirements. In 

addition to the execution timestamp 

described in appendix A to this part, 

registered entities, swap dealers and 

major swap participants shall have the 

following timestamp requirements with 

respect to real-time public reporting of 

swap transaction and pricing data for all 

publicly reportable swap transactions: 

(1) A registered swap execution 

facility or designated contract market 

shall timestamp swap transaction and 

pricing data relating to a publicly 

reportable swap transaction with the 

date and time, to the nearest second of 

when such registered swap execution 

facility or designated contract market: 

(i) Receives data from a swap 

counterparty (if applicable); and 

(ii) Transmits such data to a registered 

swap data repository for public 

dissemination. 

(2) A registered swap data repository 

shall timestamp swap transaction and 

pricing data relating to a publicly 

reportable swap transaction with the 

date and time, to the nearest second 

when such registered swap data 

repository: 

(i) Receives data from a registered 

swap execution facility, designated 

contract market or reporting party; and 

(ii) Publicly disseminates such data. 

(3) A swap dealer or major swap 

participant shall timestamp swap 

transaction and pricing data relating to 

an off-facility swap with the date and 

time, to the nearest second when such 

swap dealer or major swap participant 

transmits such data to a registered swap 

data repository for public 

dissemination. 

(4) Records of all timestamps required 

by this subsection shall be maintained 

for a period of at least five years from 

the execution of the publicly reportable 

swap transaction. 

(i) Fees. Any fees or charges assessed 

on a reporting party, registered swap 

execution facility or designated contract 

market by a registered swap data 

repository that accepts and publicly 

disseminates swap transaction and 

pricing data in real-time for the 

collection of such data shall be 

equitable and non-discriminatory. If 

such registered swap data repository 

allows a fee discount based on the 

volume of data reported to it for public 

dissemination, then such discount shall 

be made available to all reporting 

parties, registered swap execution 

facilities and designated contract 

markets in an equitable and nondiscriminatory manner. 

§ 43.4 Swap transaction and pricing data 

to be publicly disseminated in real-time. 

(a) In general. Swap transaction and 

pricing information shall be reported to 

a registered swap data repository so that 

the registered swap data repository can 

publicly disseminate swap transaction 

and pricing data in real-time in 

accordance with this part, including the 

manner described in this section and 

appendix A to this part. 

(b) Public dissemination of data 

fields. Any registered swap data 

repository that accepts and publicly 

disseminates swap transaction and 

pricing data in real-time shall publicly 

disseminate the information described 

in appendix A to this part, as 

applicable, for any publicly reportable 

swap transaction. 

(c) Additional swap information. A 

registered swap data repository that 

accepts and publicly disseminates swap 

transaction and pricing data in real-time 

may require reporting parties, registered 

swap execution facilities and designated 

contract markets to report to such 

registered swap data repository, such 

information that is necessary to compare 

the swap transaction and pricing data 

that was publicly disseminated in realtime to the data reported to a registered 

swap data repository pursuant to 

Section 2(a)(13)(G) of the Act or to 

confirm that parties to a swap have 

reported in a timely manner pursuant to 

§ 43.3 of this part. Such additional 

information shall not be publicly 

disseminated by the registered swap 

data repository. 

(d) Anonymity of the parties to a 

publicly reportable swap transaction— 

(1) In general. Swap transaction and 

pricing data that is publicly 

disseminated in real-time shall not 

disclose the identities of the parties to 

the swap or otherwise facilitate the 

identification of a party to a swap. A 

registered swap data repository that 

accepts and publicly disseminates swap 

transaction and pricing data in real-time 

shall not publicly disseminate such data 

in a manner that discloses or otherwise 

facilitates the identification of a party to 

a swap. 

(2) Actual product description 

reported to registered swap data 

repository. Reporting parties, registered 

swap execution facilities and designated 

contract markets shall provide a 

registered swap data repository with 

swap transaction and pricing data that 

includes an actual description of the 

underlying asset(s). This requirement is 

separate from the requirement that a 

reporting party, registered swap 

execution facility or designated contract 

market shall report swap data to a 

registered swap data repository 

pursuant to Section 2(a)(13)(G) of the 

Act and the Commission’s regulations. 

(3) Public dissemination of the actual 

description of underlying asset(s). 

Notwithstanding the anonymity 

protection for certain swaps in the other 

commodity asset class in § 43.4(d)(4)(ii), 

a registered swap data repository shall 

publicly disseminate the actual 

underlying asset(s) of all publicly 

reportable swap transactions in the 

interest rate, credit, equity and foreign 

exchange asset classes. 

(4) Public dissemination of the 

underlying asset(s) for certain swaps in 

the other commodity asset class. A 

registered swap data repository shall 

publicly disseminate swap transaction 

and pricing data in the other commodity 

asset class as described in this 

subsection. 

(i) A registered swap data repository 

shall publicly disseminate swap 

transaction and pricing data for publicly 

reportable swap transactions in the 

other commodity asset class in the 

manner described in § 43.4(d)(4)(ii). 

(ii) The actual underlying asset(s) 

shall be publicly disseminated for the 

following publicly reportable swap 

transactions in the other commodity 

asset class: 

(A) Any publicly reportable swap 

transaction that references one of the 

contracts described in appendix B to 

this part; 

(B) Any publicly reportable swap 

transaction that is economically related 


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to one of the contracts described in 

appendix B to this part; and 

(C) Any publicly reportable swap 

transaction executed on or pursuant to 

the rules of a registered swap execution 

facility or designated contract market. 

(e) Unique product identifier. If a 

unique product identifier is developed 

that sufficiently describes one or more 

of the swap transaction and pricing data 

fields for real-time reporting described 

in appendix A to this part, then such 

unique product identifier may be 

publicly disseminated in lieu of the data 

fields that it describes. 

(f) Reporting of notional or principal 

amounts to a registered swap data 

repository—(1) Off-facility swaps. The 

reporting party shall report the actual 

notional or principal amount of any offfacility swap to a registered swap data 

repository that accepts and publicly 

disseminates such data pursuant to part 

43. 

(2) Swaps executed on or pursuant to 

the rules of a registered swap execution 

facility or designated contract market. 

(i) A registered swap execution facility 

or designated contract market shall 

transmit the actual notional or principal 

amount for all swaps executed on or 

pursuant to the rules of such registered 

swap execution facility or designated 

contract market, to a registered swap 

data repository that accepts swaps in the 

asset class. 

(ii) The actual notional or principal 

amount for any block trade executed 

pursuant to the rules of a registered 

swap execution facility or designated 

contract market shall be reported to the 

registered swap execution facility or 

designated contract market pursuant to 

the rules of the registered swap 

execution facility or designated contract 

market. 

(g) Public dissemination of rounded 

notional or principal amounts. The 

notional or principal amount of a 

publicly reportable swap transaction, as 

described in appendix A to this part, 

shall be rounded and publicly 

disseminated by a registered swap data 

repository as follows: 

(1) If the notional or principal amount 

is less than one thousand, round to 

nearest five, but in no case shall a 

publicly disseminated notional or 

principal amount be less than five; 

(2) If the notional or principal amount 

is less than ten thousand but equal to or 

greater than one thousand, round to 

nearest one hundred; 

(3) If the notional or principal amount 

is less than 100 thousand but equal to 

or greater than ten thousand, round to 

nearest one thousand; 

(4) If the notional or principal amount 

is less than one million but equal to or 

greater than 100 thousand, round to 

nearest ten thousand; 

(5) If the notional or principal amount 

is less than 100 million but equal to or 

greater than one million, round to the 

nearest one million; 

(6) If the notional or principal amount 

is less than 500 million but equal to or 

greater than 100 million, round to the 

nearest ten million; 

(7) If the notional or principal amount 

is less than one billion but equal to or 

greater than 500 million, round to the 

nearest 50 million; 

(8) If the notional or principal amount 

is less than 100 billion but equal to or 

greater than one billion, round to the 

nearest one billion; 

(9) If the notional or principal amount 

is greater than 100 billion, round to the 

nearest 50 billion. 

(h) Public dissemination caps on 

notional or principal amounts. The 

rounded notional or principal amount 

that is publicly disseminated for a 

publicly reportable swap transaction 

shall be capped in a manner that adjusts 

in accordance with the appropriate 

minimum block size that corresponds to 

such publicly reportable swap 

transaction. If there is no appropriate 

minimum block size applicable to a 

publicly reportable swap transaction, 

then the cap on the notional or principal 

amount that is publicly disseminated 

shall be applied in the following 

manner: 

(1) Interest rate swaps. (i) The 

publicly disseminated notional or 

principal amount for an interest rate 

swap subject to the rules in this part 

with a tenor greater than zero up to and 

including two years shall be capped at 

USD 250 million. 

(ii) The publicly disseminated 

notional or principal amount for an 

interest rate swap subject to the rules in 

this part with a tenor greater than two 

years up to and including ten years shall 

be capped at USD 100 million. 

(iii) The publicly disseminated 

notional or principal amount for an 

interest rate swap subject to the rules in 

this part with a tenor greater than ten 

years shall be capped at USD 75 million. 

(2) Credit swaps. The publicly 

disseminated notional or principal 

amount for a credit swap subject to the 

rules in this part shall be capped at USD 

100 million. 

(3) Equity swaps. The publicly 

disseminated notional or principal 

amount for an equity swap subject to the 

rules in this part shall be capped at USD 

250 million. 

(4) Foreign exchange swaps. The 

publicly disseminated notional or 

principal amount for a foreign exchange 

swap subject to the rules in this part 

shall be capped at USD 250 million. 

(5) Other commodity swaps. The 

publicly disseminated notional or 

principal amount for any other 

commodity swap subject to the rules in 

this part shall be capped at USD 25 

million. 

§ 43.5 Time delays for public 

dissemination of swap transaction and 

pricing data. 

(a) In general. The time delay for the 

real-time public reporting of a block 

trade or large notional off-facility swap 

begins upon execution, as defined in 

§ 43.2 of this part. It is the responsibility 

of the registered swap data repository 

that accepts and publicly disseminates 

swap transaction and pricing data in 

real-time to ensure that the block trade 

or large notional off-facility swap 

transaction and pricing data is publicly 

disseminated pursuant to this part upon 

the expiration of the appropriate time 

delay described in § 43.5(d) through (h). 

(b) Public dissemination of publicly 

reportable swap transactions subject to 

a time delay. A registered swap data 

repository shall publicly disseminate 

swap transaction and pricing data that 

is subject to a time delay pursuant to 

this paragraph, as follows: 

(1) No later than the prescribed time 

delay period described in this 

paragraph; 

(2) No sooner than the prescribed time 

delay period described in this 

paragraph; and 

(3) Precisely upon the expiration of 

the time delay period described in this 

paragraph. 

(c) Interim time delay—(1) In general. 

The public dissemination of swap 

transaction and pricing data relating to 

any publicly reportable swap 

transaction shall receive the same time 

delays for block trades and large 

notional off-facility swaps, as described 

in this subsection, until such time as an 

appropriate minimum block size is 

established with respect to such 

publicly reportable swap transaction. 

(2) Swaps executed on or pursuant to 

the rules of a registered swap execution 

facility or designated contract market. 

Any publicly reportable swap 

transaction that does not have an 

appropriate minimum block size and 

that is executed on or pursuant to the 

rules of a registered swap execution 

facility or designated contract market 

shall follow the time delays set forth in 

§ 43.5(d) until such time that an 

appropriate minimum block size is 

established for such publicly reportable 

swap transaction. 

(3) Off-facility swaps subject to the 

mandatory clearing requirement. Any 


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off-facility swap that does not have an 

appropriate minimum block size and 

that is subject to the mandatory clearing 

requirement described in Section 2(h)(1) 

of the Act and Commission regulations, 

with the exception of those off-facility 

swaps that are either excepted from the 

mandatory clearing requirement 

pursuant to Section 2(h)(7) of the Act 

and Commission regulations or that are 

required to be cleared under Section 

2(h)(2) of the Act and Commission 

regulations but are not cleared, shall 

follow the time delays set forth in 

§ 43.5(e) until such time that an 

appropriate minimum block size is 

established for such off-facility swap. 

(4) Off-facility swaps in the interest 

rate, credit, foreign exchange and equity 

asset classes not subject to the 

mandatory clearing requirement with at 

least one swap dealer or major swap 

participant counterparty. Any offfacility swap in the interest rate, credit, 

foreign exchange or equity asset classes, 

where at least one party is a swap dealer 

or major swap participant, that is not 

subject to the mandatory clearing 

requirement or is excepted from such 

mandatory clearing requirement and 

that does not have an appropriate 

minimum block size shall follow the 

time delays set forth in § 43.5(f) until 

such time that an appropriate minimum 

block size is established for such offfacility swap. 

(5) Off-facility swaps in the other 

commodity asset class not subject to the 

mandatory clearing requirement with at 

least one swap dealer or major swap 

participant counterparty. Any offfacility swap in the other commodity 

asset class, where at least one party is 

a swap dealer or major swap participant, 

that is not subject to the mandatory 

clearing requirement or is excepted from 

such mandatory clearing requirement 

and that does not have an appropriate 

minimum block size shall follow the 

time delays set forth in § 43.5(g) until 

such time that an appropriate minimum 

block size is established for such offfacility swap. 

(6) Off-facility swaps in all asset 

classes not subject to the mandatory 

clearing requirement in which neither 

counterparty is a swap dealer or major 

swap participant. Any off-facility swap, 

in all asset classes, where neither party 

is a swap dealer or major swap 

participant, that is not subject to the 

mandatory clearing requirement or is 

excepted from such mandatory clearing 

requirement and that does not have an 

appropriate minimum block size shall 

follow the time delays set forth in 

§ 43.5(h) until such time that an 

appropriate minimum block size is 

established for such off-facility swap. 

(7) Time delays for public 

dissemination upon establishment of an 

appropriate minimum block size. After 

an appropriate minimum block size is 

established for a particular swap or 

category of swaps, all publicly 

reportable swap transactions that are 

below the appropriate minimum block 

size shall be publicly disseminated as 

soon as technologically practicable after 

execution pursuant to § 43.3 of this part. 

(d) Time delay for block trades 

executed pursuant to the rules of a 

registered swap execution facility or 

designated contract market. Any block 

trade that is executed pursuant to the 

rules of a registered swap execution 

facility or designated contract market 

shall receive a time delay in the public 

dissemination of swap transaction and 

pricing data as follows: 

(1) Time delay during Year 1. For one 

year beginning on the compliance date 

of this part, the time delay for public 

dissemination of swap transaction and 

pricing data for all publicly reportable 

swap transactions described in § 43.5(d) 

shall be 30 minutes immediately after 

execution of such publicly reportable 

swap transaction. 

(2) Time delay after Year 1. Beginning 

on the first anniversary of the 

compliance date of this part, the time 

delay for public dissemination of swap 

transaction and pricing data for all 

publicly reportable swap transactions 

described in § 43.5(d) shall be 15 

minutes immediately after execution of 

such publicly reportable swap 

transaction. 

(e) Time delay for large notional offfacility swaps subject to the mandatory 

clearing requirement—(1) In general. 

This subsection shall not apply to offfacility swaps that are excepted from the 

mandatory clearing requirement 

pursuant to Section 2(h)(7) of the Act 

and Commission regulations, and this 

subsection shall not apply to those 

swaps that are required to be cleared 

under Section 2(h)(2) of the Act and 

Commission regulations but are not 

cleared. 

(2) Swaps subject to the mandatory 

clearing requirement where at least one 

party is a swap dealer or major swap 

participant. Any large notional offfacility swap that is subject to the 

mandatory clearing requirement 

described in Section 2(h)(1) of the Act 

and Commission regulations, in which 

at least one party is a swap dealer or 

major swap participant, shall receive a 

time delay as follows: 

(i) Time delay during Year 1. For one 

year beginning on the compliance date 

of this part, the time delay for public 

dissemination of swap transaction and 

pricing data for all swaps described in 

§ 43.5(e)(2) shall be 30 minutes 

immediately after execution of such 

swap. 

(ii) Time delay after Year 1. Beginning 

on the first anniversary of the 

compliance date of this part, the time 

delay for public dissemination of swap 

transaction and pricing data for all 

swaps described in § 43.5(e)(2) shall be 

15 minutes immediately after execution 

of such swap. 

(3) Swaps subject to the mandatory 

clearing requirement where neither 

party is a swap dealer or major swap 

participant. Any large notional offfacility swap that is subject to the 

mandatory clearing requirement 

described in Section 2(h)(1) of the Act 

and Commission regulations, in which 

neither party is a swap dealer or major 

swap participant, shall receive a time 

delay as follows: 

(i) Time delay during Year 1. For one 

year beginning on the compliance date 

of this part, the time delay for public 

dissemination of swap transaction and 

pricing data for all swaps described in 

§ 43.5(e)(3) shall be four hours 

immediately after execution of such 

swap. 

(ii) Time delay during Year 2. For one 

year beginning on the first anniversary 

of the compliance date of this part, the 

time delay for public dissemination of 

swap transaction and pricing data for all 

swaps described in § 43.5(e)(3) shall be 

two hours immediately after execution 

of such swap. 

(iii) Time delay after Year 2. 

Beginning on the second anniversary of 

the compliance date of this part, the 

time delay for public dissemination of 

swap transaction and pricing data for all 

swaps described in § 43.5(e)(3) shall be 

one hour immediately after execution of 

such swap. 

(f) Time delay for large notional offfacility swaps in the interest rate, credit, 

foreign exchange or equity asset classes 

not subject to the mandatory clearing 

requirement with at least one swap 

dealer or major swap participant 

counterparty. Any large notional offfacility swap in the interest rate, credit, 

foreign exchange or equity asset classes 

where at least one party is a swap dealer 

or major swap participant, that is not 

subject to the mandatory clearing 

requirement or is excepted from such 

mandatory clearing requirement, shall 

receive a time delay in the public 

dissemination of swap transaction and 

pricing data as follows: 

(1) Time delay during Year 1. For one 

year beginning on the compliance date 

of this part, the time delay for public 

dissemination of swap transaction and 

pricing data for all swaps described in 

§ 43.5(f) shall be one hour immediately 


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after execution of such swap; however, 

any large notional off-facility swap in 

the interest rate, credit, foreign 

exchange or equity asset classes in 

which one party is not a swap dealer or 

major swap participant and such party 

is not a financial entity as defined in 

Section 2(h)(7)(C) of the Act and 

Commission regulations, shall receive a 

time delay of one hour immediately 

after execution of such swap; or if such 

swap transaction or pricing data is 

received by the registered swap data 

repository later than one hour 

immediately after execution, the 

registered swap data repository shall 

publicly disseminate such data as soon 

as technologically practicable after the 

data is received. 

(2) Time delay during Year 2. For one 

year beginning on the first anniversary 

of the compliance date of this part, the 

time delay for public dissemination of 

swap transaction and pricing data for all 

swaps described in § 43.5(f) shall be 30 

minutes immediately after execution of 

such swap; however, any large notional 

off-facility swap in the interest rate, 

credit, foreign exchange or equity asset 

classes in which one party is not a swap 

dealer or major swap participant and 

such party is not a financial entity as 

defined in Section 2(h)(7)(C) of the Act 

and Commission regulations, shall 

receive a time delay of 30 minutes 

immediately after execution of such 

swap; or if such swap transaction or 

pricing data is received by the registered 

swap data repository later than 30 

minutes immediately after execution, 

the registered swap data repository shall 

publicly disseminate such data as soon 

as technologically practicable after the 

data is received. 

(3) Time delay after Year 2. Beginning 

on the second anniversary of the 

compliance date of this part, the time 

delay for public dissemination of swap 

transaction and pricing data for all 

swaps described in § 43.5(f) shall be 30 

minutes immediately after execution of 

such swap. 

(g) Time delay for large notional offfacility swaps in the other commodity 

asset class not subject to the mandatory 

clearing requirement with at least one 

swap dealer or major swap participant 

counterparty. Any large notional offfacility swap in the other commodity 

asset class where at least one party is a 

swap dealer or major swap participant, 

that is not subject to the mandatory 

clearing requirement or is exempt from 

such mandatory clearing requirement, 

shall receive a time delay in the public 

dissemination of swap transaction and 

pricing data as follows: 

(1) Time delay during Year 1. For one 

year beginning on the compliance date 

of this part, the time delay for public 

dissemination of swap transaction and 

pricing data for all swaps described in 

§ 43.5(g) shall be four hours 

immediately after execution of such 

swap; however, any large notional offfacility swap in the other commodity 

asset class in which only one party is 

not a swap dealer or major swap 

participant and such party is not a 

financial entity as defined in Section 

2(h)(7)(C) of the Act and Commission 

regulations, shall receive a time delay of 

four hours immediately after execution 

of such swap, or if such swap 

transaction or pricing data is received 

by the registered swap data repository 

later than four hours immediately after 

execution of such swap, the registered 

swap data repository shall publicly 

disseminate such data as soon as 

technologically practicable after the data 

is received. 

(2) Time delay during Year 2. For one 

year beginning on the first anniversary 

of the compliance date of this part, the 

time delay for public dissemination of 

swap transaction and pricing data for all 

swaps described in § 43.5(g) shall be 

two hours immediately after execution 

of such swap; however, any large 

notional off-facility swap in the other 

commodity asset class in which only 

one party is not a swap dealer or major 

swap participant and such party is not 

a financial entity as defined in Section 

2(h)(7)(C) of the Act and Commission 

regulations, shall receive a time delay of 

two hours immediately after execution 

of such swap, or if such swap 

transaction or pricing data is received 

by the registered swap data repository 

later than two hours immediately after 

execution, the registered swap data 

repository shall publicly disseminate 

such data as soon as technologically 

practicable after the data is received. 

(3) Time delay after Year 2. Beginning 

on the second anniversary of the 

compliance date of this part, the time 

delay for public dissemination of swap 

transaction and pricing data for all 

swaps described in § 43.5(g) shall be 

two hours after the execution of such 

swap. 

(h) Time delay for large notional offfacility swaps in all asset classes not 

subject to the mandatory clearing 

requirement in which neither 

counterparty is a swap dealer or a major 

swap participant. Any large notional 

off-facility swap in which neither party 

is a swap dealer or a major swap 

participant, which is not subject to the 

mandatory clearing requirement or is 

exempt from such mandatory clearing 

requirement, shall receive a time delay 

in the public dissemination of swap 

transaction and pricing data as follows: 

(1) Time delay during Year 1. For one 

year beginning on the compliance date 

of this part, the time delay for public 

dissemination of swap transaction and 

pricing data for all swaps described in 

§ 43.5(h) shall be 48 business hours 

immediately after execution of such 

swap. 

(2) Time delay during Year 2. For one 

year beginning on the first anniversary 

of the compliance date of this part, the 

time delay for public dissemination of 

swap transaction and pricing data for all 

swaps described in § 43.5(h) shall be 36 

business hours immediately after the 

execution of such swap. 

(3) Time delay after Year 2. Beginning 

on the second anniversary of the 

compliance date of this part, the time 

delay for public dissemination 

transaction and pricing data for all 

swaps described in § 43.5(h) shall be 24 

business hours immediately after the 

execution of such swap. 

§ 43.6 [Reserved] 

Appendix A to Part 43—Data Fields for 

Public Dissemination 

The data fields described in Table A1 

and Table A2, to the extent applicable 

for a particular publicly reportable swap 

transaction, shall be publicly 

disseminated pursuant to part 43. Table 

A1 and Table A2 provide guidance for 

compliance with the reporting and 

public dissemination of each data field. 

Reporting parties, registered swap 

execution facilities and designated 

contract markets shall report swap 

transaction and pricing data necessary 

to publicly disseminate such data, 

pursuant to part 43 and this appendix 

A to part 43, to a registered swap data 

repository as soon as technologically 

practicable after execution of the 

publicly reportable swap transaction. A 

registered swap data repository shall 

publicly disseminate the information in 

Table A1 and A2 in a consistent form 

and manner for swaps within the same 

asset class. 

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BILLING CODE 6351–01–C 

Appendix B to Part 43—Enumerated 

Physical Commodity Contracts and 

Other Contracts 

Enumerated Physical Commodity Contracts 

Agriculture 

ICE Futures U.S. Cocoa 

ICE Futures U.S. Coffee C 

Chicago Board of Trade Corn 

ICE Futures U.S. Cotton No. 2 

ICE Futures U.S. FCOJ–A 

Chicago Mercantile Exchange Live Cattle 

Chicago Board of Trade Oats 

Chicago Board of Trade Rough Rice 

Chicago Board of Trade Soybeans 

Chicago Board of Trade Soybean Meal 

Chicago Board of Trade Soybean Oil 

ICE Futures U.S. Sugar No. 11 

ICE Futures U.S. Sugar No. 16 

Chicago Board of Trade Wheat 

Minneapolis Grain Exchange Hard Red 

Spring Wheat 

Kansas City Board of Trade Hard Winter 

Wheat 

Chicago Mercantile Exchange Class III Milk 

Chicago Mercantile Exchange Feeder Cattle 

Chicago Mercantile Exchange Lean Hogs 

Metals 

Commodity Exchange, Inc. Copper 

New York Mercantile Exchange Palladium 

New York Mercantile Exchange Platinum 

Commodity Exchange, Inc. Gold 

Commodity Exchange, Inc. Silver 

Energy 

New York Mercantile Exchange Light Sweet 

Crude Oil 

New York Mercantile Exchange New York 

Harbor Gasoline Blendstock 

New York Mercantile Exchange Henry Hub 

Natural Gas 


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New York Mercantile Exchange New York 

Harbor Heating Oil 

Other Contracts 

Brent Crude Oil (ICE) 

Appendix C to Part 43—Time Delays 

for Public Dissemination 

The tables below provide clarification of 

the time delays for public dissemination set 

forth in § 43.5. The first row of each table 

describes the asset classes to which each 

chart applies. The column entitled ‘‘Yearly 

Phase-In’’ indicates the periods beginning on 

the compliance date of this part and 

beginning on the anniversary of the 

compliance date thereafter. The column 

entitled ‘‘Time Delay for Public 

Dissemination’’ indicates the precise length 

of time delay, starting upon execution, for the 

public dissemination of such swap 

transaction and pricing data by a registered 

swap data repository. 

Table C1. Block Trades Executed on or 

Pursuant to the Rules of a Registered Swap 

Execution Facility or Designated Contract 

Market (Illustrating §§ 43.5(d)(1) and (d)(2)) 

Table C1 also designates the interim time 

delays for swaps described in § 43.5(c)(2). 

ALL ASSET CLASSES

Yearly phase-in Time delay for public dissemination 

Year 1 ........................................................ 30 minutes. 

After Year 1 ............................................... 15 minutes. 

Table C2. Large Notional Off-Facility Swaps 

Subject to the Mandatory Clearing 

Requirement With at Least One Swap Dealer 

or Major Swap Participant Counterparty 

(Illustrating §§ 43.5(e)(2)(A) and (e)(2)(B)) 

Table C2 excludes off-facility swaps that 

are excepted from the mandatory clearing 

requirement pursuant to Section 2(h)(7) of 

the Act and Commission regulations and 

those off-facility swaps that are required to be 

cleared under Section 2(h)(2) of the Act and 

Commission regulations but are not cleared. 

Table C2 also designates the interim time 

delays for swaps described in § 43.5(c)(3). 

ALL ASSET CLASSES

Yearly phase-in Time delay for public dissemination 

Year 1 ........................................................ 30 minutes. 

After Year 1 ............................................... 15 minutes. 

Table C3. Large Notional Off-Facility Swaps 

Subject to the Mandatory Clearing 

Requirement in Which Neither Counterparty 

Is a Swap Dealer or Major Swap Participant 

(Illustrating §§ 43.5(e)(3)(A), (e)(3)(B), and 

(e)(3)(C)) 

Table C3 excludes off-facility swaps that 

are excepted from the mandatory clearing 

requirement pursuant to Section 2(h)(7) of 

the Act and Commission regulations and 

those swaps that are required to be cleared 

under Section 2(h)(2) of the Act and 

Commission regulations but are not cleared. 

Table C3 also designates the interim time 

delays for swaps described in § 43.5(c)(3). 

ALL ASSET CLASSES

Yearly phase-in Time delay for public dissemination 

Year 1 ........................................................ 4 hours. 

Year 2 ........................................................ 2 hours. 

After Year 2 ............................................... 1 hour. 

Table C4. Large Notional Off-Facility Swaps 

Not Subject to the Mandatory Clearing 

Requirement With at Least One Swap Dealer 

or Major Swap Participant Counterparty 

(Illustrating §§ 43.5(f)(1), (f)(2) and (f)(3)) 

Table C4 includes large notional off-facility 

swaps that are not subject to the mandatory 

clearing requirement or are exempt from such 

mandatory clearing requirement pursuant to 

Section 2(h)(7) of the Act and Commission 

regulations. 

Table C4 also designates the interim time 

delays for swaps described in § 43.5(c)(4). 

INTEREST RATES, CREDIT, FOREIGN EXCHANGE, EQUITY ASSET CLASSES

Yearly phase-in Time delay for public dissemination 

Year 1 ........................................................ 1 hour. 

However, if such swap includes a non-swap dealer/non-major swap participant counterparty that is 

not a financial entity as defined in Section 2(h)(7)(C) of the Act and Commission regulations, then 

one hour immediately after execution; or if received later than one hour by the registered swap 

data repository, then public dissemination shall occur as soon as technologically practicable after 

the data is received. 

Year 2 ........................................................ 30 minutes. 


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INTEREST RATES, CREDIT, FOREIGN EXCHANGE, EQUITY ASSET CLASSES—Continued 

Yearly phase-in Time delay for public dissemination 

However, if such swap includes a non-swap dealer/non-major swap participant counterparty that is 

not a financial entity as defined in Section 2(h)(7)(C) of the Act and Commission regulations, then 

30 minutes immediately after execution; or if received later than 30 minutes by the registered 

swap data repository, then public dissemination shall occur as soon as technologically practicable 

after the data is received. 

After Year 2 ............................................... 30 minutes. 

Table C5. Large Notional Off-Facility Swaps 

Not Subject to the Mandatory Clearing 

Requirement With at Least One Swap Dealer 

or Major Swap Participant Counterparty 

(Illustrating §§ 43.5(g)(1), (g)(2), and (g)(3)) 

Table C5 includes large notional off-facility 

swaps that are not subject to the mandatory 

clearing requirement or are excepted from 

such mandatory clearing requirement 

pursuant to Section 2(h)(7) of the Act and 

Commission regulations. 

Table C5 also designates the interim time 

delays for swaps described in § 43.5(c)(5). 

OTHER COMMODITY ASSET CLASS

Yearly phase-in Time delay for public dissemination 

Year 1 ........................................................ 4 hours. 

However, if such swap includes a non-swap dealer/non-major swap participant counterparty that is 

not a financial entity as defined in Section 2(h)(7)(C) of the Act and Commission regulations, then 

four hours immediately after execution; or if received later than four hours by the registered swap 

data repository, then public dissemination shall occur as soon as technologically practicable after 

the data is received. 

Year 2 ........................................................ 2 hours. 

However, if such swap includes a non-swap dealer/non-major swap participant counterparty that is 

not a financial entity as defined in Section 2(h)(7)(C) of the Act and Commission regulations, then 

two hours immediately after execution; or if received later than two hours by the registered swap 

data repository, then public dissemination shall occur as soon as technologically practicable after 

the data is received. 

After Year 2 ............................................... 2 hours. 

Table C6. Large Notional Off-Facility Swaps 

Not Subject to the Mandatory Clearing 

Requirement in Which Neither Counterparty 

Is a Swap Dealer or Major Swap Participant 

(Illustrating §§ 43.5(h)(1), (h)(2) and (h)(3)) 

Table C6 includes large notional off-facility 

swaps that are not subject to the mandatory 

clearing requirement or are exempt from such 

mandatory clearing requirement pursuant to 

Section 2(h)(7) of the Act and Commission 

regulations. 

Table C6 also designates the interim time 

delays for swaps described in § 43.5(c)(6). 

ALL ASSET CLASSES

Yearly phase-in Time delay for public dissemination 

Year 1 ....................................................... 48 business hours. 

Year 2 ....................................................... 36 business hours. 

After Year 2 ............................................... 24 business hours. 

Issued in Washington, DC, on December 

20, 2011, by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

Note: The following appendices will not 

appear in the Code of Federal Regulations 

Appendices to Real-Time Public 

Reporting of Swap Transaction Data— 

Commission Voting Summary and 

Statements of Commissioners 

Appendix 1—Commission Voting 

Summary 

On this matter, Chairman Gensler and 

Commissioners Sommers, Chilton, 

O’Malia and Wetjen voted in the 

affirmative; no Commissioner voted in 

the negative. 

Appendix 2—Statement of Chairman 

Gary Gensler 

I support the final rule to implement 

a real-time, public reporting regime for 

swaps. This rule fulfills Congress’ 

direction under the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act to bring public transparency to the 

entire swaps market for both cleared 

and uncleared swaps. This rule will give 

the public critical information on the 

pricing of transactions—similar to what 

has been working for decades in the 

securities and futures markets. 


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Real-time reporting introduces posttrade transparency to the swaps market, 

which lowers costs for market 

participants and consumers. 

In response to commenters, the final 

rule provides for the phasing in of 

compliance dates and time delays based 

on market participant, place of 

execution and underlying asset. As 

directed by Congress, the final rule 

protects the anonymity of counterparties 

to a swap and takes into account the 

effect of the rule on market liquidity. 

[FR Doc. 2011–33173 Filed 1–6–12; 8:45 am] 

BILLING CODE 6351–01–P 


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