U.S. COMMODITY FUTURES TRADING COMMISSION

Three Lafayette Centre

1155 21st Street, NW, Washington, DC 20581

Telephone: (202) 418-5000

Facsimile: (202) 418-5521

www.cftc.gov

Division of Market Oversight

CFTC Letter No. 13-10

No-Action

April 9, 2013

Division of Market Oversight

Time-Limited No-Action Relief for Swap Counterparties that are not Swap Dealers or 

Major Swap Participants, from Certain Swap Data Reporting Requirements of 

Parts 43, 45 and 46 of the Commission’s Regulations

Ladies and Gentlemen:

This letter responds to requests received from multiple parties, by the Division of Market 

Oversight (the “Division”) of the Commodity Futures Trading Commission (the “Commission”),

to provide no-action relief to extend the date by which a swap counterparty that is not a swap 

dealer or a major swap participant, as such terms are defined in the Commodity Exchange Act1

and the Commission’s regulations thereunder (a “non-SD/MSP counterparty”), must be in

compliance with its reporting obligations under the Commission’s swap data recordkeeping and 

reporting rules.

2

 

1

7 U.S.C. § 1, et seq.

2 This letter responds to, but, for the reasons set forth herein, does not fully grant all no-action relief requested in, the 

following: (1) Letter from Sutherland, Asbill & Brennan LLP on behalf of the Commercial Energy Working Group, 

Request for No-Action Relief Extending the April 10, 2013 Compliance Date for Reporting Swap Transactions 

under Parts 43, 45 and 46 of the Commission’s Regulations (March 1, 2013) (the “CEWG Letter”); (2) Letter from 

the Edison Electric Institute, the National Rural Electric Cooperative Association, the American Public Power 

Association, the Electric Power Supply Association and the American Gas Association in support of the CEWG 

Letter (March 8, 2013); (3) Letter from Mondelez International in support of the CEWG Letter (March 26, 2013); 

(4) Letter from the Institute of International Bankers in support of the CEWG Letter (March 28, 2013); (5) Letter 

from the International Swaps and Derivatives Association, Inc. and the Financial Services Roundtable, Request for 

No-Action Relief Extending ‘Compliance Date 3’ (March 28, 2013); and (6) Letter from The Coca-Cola Company 

in support of the CEWG Letter (March 31, 2013). 

The Division notes that it has received the following additional requests for no-action relief from the reporting 

requirements of Part 46 of the Commission’s regulations: (1) Letter from the Commodity Markets Council, Request 

for No-Action Relief: Commodity Futures Trading Commission (“CFTC”) Part 46 Recordkeeping Requirements 

and CME Contingent EFS or EOO Transactions (March 20, 2013); and (2) Letter from the Futures Industry 

Association, Request Pursuant to Commission Regulation 140.99 for Certain No-Action Relief from Part 46 

Requirements (March 26, 2013). 

Solely for the reasons set forth herein, the Division has determined to provide to non-SD/MSP counterparties certain 

temporary no-action relief from the reporting requirements of Part 43, Part 45 and Part 46.
Page 2

Background 

Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank 

Act”)3amended the Commodity Exchange Act to establish a comprehensive new regulatory

framework for swaps. Amendments to the Commodity Exchange Act included the addition of 

provisions requiring the retention and reporting of data regarding swap transactions.4 Pursuant to 

these newly added provisions, the Commission added to its regulations Part 43,5 which sets forth 

rules for the real-time public reporting of swap transaction data; Part 45,

6 which sets forth swap 

data recordkeeping rules, as well as rules for the reporting of swap transaction data to a 

registered swap data repository (“SDR”); and Part 46,7 which sets forth swap data recordkeeping 

and reporting rules for pre-enactment swaps8and transition swaps9(collectively, “historical 

swaps”).

10

Swap counterparties have certain reporting obligations under each of Part 43, Part 45 and Part 46

(collectively, the “swap data reporting rules”). Pursuant to the compliance schedule set forth in 

 

3

Pub. L. 111-203, 124 Stat. 1376 (2010). 

4

See, e.g., Section 2(a)(13), which establishes requirements for the real-time reporting and public availability of 

swap transaction data; Section 21(b), which directs the Commission to prescribe standards for swap data 

recordkeeping and reporting; and Sections 4r and 2(h)(5), which, among other things, establish reporting 

requirements for swaps in effect as of the enactment of the Dodd-Frank Act, as well as swaps in effect after such 

enactment but prior to the effective date for compliance with the Commission’s final swap data recordkeeping and 

reporting rules. 

5 Real-Time Public Reporting of Swap Transaction Data, 77 Fed. Reg. 1182 (January 9, 2012) (“Real-Time 

Reporting Rule”). 

6

Swap Data Recordkeeping and Reporting Requirements, 77 Fed. Reg. 2136 (January 13, 2012) (“Regulatory 

Reporting Rule”). 

7

Swap Data Recordkeeping and Reporting Requirements: Pre-Enactment and Transition Swaps, 77 Fed. Reg. 

35200 (June 12, 2012) (“Historical Swap Reporting Rule”). 

8 A “pre-enactment swap” is a swap entered into prior to the enactment of the Dodd-Frank Act (July 21, 2010), the 

terms of which have not expired as of the date of enactment of the Dodd-Frank Act. See Historical Swap Reporting 

Rule at 35226.

9 A “transition swap” is a swap entered into on or after the enactment of the Dodd-Frank Act (July 21, 2010), and

prior to the applicable compliance date for reporting historical swaps data pursuant to Part 46. See Historical Swap 

Reporting Rule at 35227.

10 See also Part 44 of the Commission’s regulations (Interim Final Rule for Reporting Pre-Enactment Swap 

Transactions, 75 Fed. Reg. 63080 (October 14, 2010); and Reporting Certain Post-Enactment Swap Transactions, 75 

Fed. Reg. 78892 (December 17, 2010)), which established certain record retention requirements for historical swaps, 

pending the adoption of the Commission’s final rules, set forth at Part 46, regarding recordkeeping and reporting 

with respect to historical swaps.
Page 3

the swap data reporting rules,11 and taking into account certain no-action relief previously issued 

by Commission staff,

12

a swap counterparty that is registered or required to be registered as a 

swap dealer or a major swap participant is currently required to be in compliance with these 

reporting obligations.

13 A non-SD/MSP counterparty is required to be in compliance with its 

reporting obligations under the swap data reporting rules by April 10, 2013.14

The Division has received requests, from market participants and other interested parties, to 

provide no-action relief to extend the date by which a non-SD/MSP counterparty must be in 

compliance with its reporting obligations under the swap data reporting rules. It has been 

submitted that the development of swap data reporting systems has been more challenging, 

technologically and operationally, for non-SD/MSP counterparties than for swap dealers and 

major swap participants. Concerns have also been expressed that the requirement to ensure that 

all historical swaps data is reported, pursuant to Part 46, by the same date upon which reporting 

obligations become effective pursuant to Part 43 and Part 45, has compounded the challenges

faced by non-SD/MSP counterparties in finalizing their swap data reporting infrastructure. 

The Division notes that, in establishing a later compliance date for non-SD/MSP counterparties 

under the swap data reporting rules, the Commission recognized that non-SD/MSP 

counterparties could potentially have more limited technological and operational capability, than 

swap dealers and major swap participants, upon which to leverage when developing their swap 

data reporting systems. The later compliance date provided non-SD/MSP counterparties with an 

additional period of time to finalize their internal reporting infrastructure and come into 

compliance with their swap data reporting obligations. The Division notes further, however, that 

while the swap data reporting rules established a single, later compliance date for reporting by 

 

11 See Real-Time Reporting Rule at 1228; Regulatory Reporting Rule at 2197; and Historical Swap Reporting Rule

at 35226. See also CFTC Staff Responds to Questions on Timing of Swap Dealer Registration Rules, Commission 

Press Release 6348-12 (September 10, 2012), available at http://www.cftc.gov/PressRoom/PressReleases/pr6348-

12; and Division Q & A – On Start of Swap Data Reporting (October 9, 2012), available at 

http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/startreporting_qa_final.pdf.

12 See Time-Limited No-Action Relief for Swap Dealers from Certain Swap Data Reporting Requirements of Part 

43, Part 45 and Part 46 of the Commission’s Regulations, Commission Letter No. 12-32 (November 19, 2012); and

No-Action Relief for Swap Dealers from Certain Swap Data Reporting Requirements of Part 43, Part 45 and Part 46 

of the Commission’s Regulations, Due to Effects of Hurricane Sandy, Commission Letter No. 12-41 (December 5, 

2012) (the “Hurricane Sandy No-Action Letter”). 

13 Swap dealers were required to be in compliance with their reporting obligations with respect to: (1) credit swaps 

and interest rate swaps (i) under Part 43 and Part 45, on December 31, 2012, and (ii) under Part 46, on January 30, 

2013; and (2) equity swaps, foreign exchange swaps and other commodity swaps under (i) Part 43 and Part 45, on

February 28, 2013, and (ii) under Part 46, on March 30, 2013. Major swap participants were required to be in 

compliance with their reporting obligations under all of the swap data reporting rules, with respect to all swap asset 

classes, on February 28, 2013. See supra notes 11 and 12. The Division notes that Commission staff has also issued 

interpretive guidance and no-action relief relating to certain specific requirements of the swap data recordkeeping 

and reporting rules, copies of which are available on the Commission’s website at www.cftc.gov. See also Final 

Exemptive Order Regarding Compliance With Certain Swap Regulations, 78 Fed. Reg. 858 (January 7, 2013).

14 See supra notes 11 and 12. 
Page 4

non-SD/MSP counterparties with respect to all swap asset classes, the Commission recognized, 

in its establishment of the compliance schedule for swap dealers and major swap participants,

that due to differences in the levels of pre-existing automation and data normalization, coming 

into compliance with reporting obligations with respect to equity swaps, foreign exchange swaps 

and other commodity swaps could potentially be more challenging than coming into compliance 

with reporting obligations with respect to interest rate swaps and credit swaps.15

In adopting the swap data reporting rules, the Commission also recognized non-SD/MSP 

counterparties that are financial entities, as such term is defined in Section 2(h)(7)(C) of the 

Commodity Exchange Act (“financial swap counterparties”),16 as being more likely than nonSD/MSP counterparties that are not financial entities, as such term is defined in Section 

2(h)(7)(C) of the Commodity Exchange Act (“non-financial swap counterparties”), to have preexisting technological capability upon which to leverage when developing their swap data 

reporting systems. Noting that financial swap counterparties were more likely to have automated 

systems in place to facilitate swap data reporting,

17 in both Part 45 and Part 46 the Commission 

allocated reporting responsibility for a swap transaction between a non-financial swap 

counterparty and a financial swap counterparty, to the financial swap counterparty.18 

 

15 See Regulatory Reporting Rule at 2194.

16 Pursuant to Section 2(h)(7)(C)(i) of the Commodity Exchange Act, 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; (VII) an employee benefit plan as defined in paragraphs (3) and (32) of Section 3 of the Employee 

Retirement Income Security Act of 1974; or (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. Pursuant to Section 2(h)(7)(C)(iii), the term “financial entity” 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. 

Pursuant to Section 2(h)(7)(C)(ii) of the Commodity Exchange Act, the Commission has, for purposes of the 

exception to the clearing requirement set forth at Section 2(h)(7)(A) of the Act (the “clearing exception”), exempted 

from the definition of a “financial entity” a person that is a “financial entity” solely because of Section 

2(h)(7)(C)(i)(VIII) of the Act, if such person: (i) is organized as a bank, as defined in Section 3(a) of the Federal 

Deposit Insurance Act, the deposits of which are insured by the Federal Deposit Insurance Corporation; a savings 

association, as defined in Section 3(b) of the Federal Deposit Insurance Act, the deposits of which are insured by the 

Federal Deposit Insurance Corporation; a farm credit system institution chartered under the Farm Credit Act of 

1971; or an insured Federal credit union or State-chartered credit union under the Federal Credit Union Act; and (ii) 

has total assets of $10,000,000,000 or less on the last day of such person’s most recent fiscal year. See End-User 

Exception to the Clearing Requirement for Swaps, 77 Fed. Reg. 42559, 42591 (July 19, 2012). Any such person 

that the Commission has exempted from the definition of a “financial entity” for purposes of the clearing exception 

shall be considered to be a non-financial swap counterparty for purposes of the reporting relief provided by the 

Division in this no-action letter.

17 See Regulatory Reporting Rule at 2617

18 See Regulatory Reporting Rule at 2207; and Historical Swap Reporting Rule at 35229.
Page 5

No-Action Relief for Financial Swap Counterparties

Consistent with the Commission’s recognition, in adopting the swap data reporting rules, that 

financial swap counterparties were more likely than non-financial swap counterparties to have 

pre-existing systems in place to facilitate reporting, and given the additional period of time that 

the later April, 10, 2013, compliance date has already provided to financial swap counterparties 

to finalize their internal swap data reporting infrastructure, the Division believes that financial 

swap counterparties have been provided with a sufficient amount of time to come into 

compliance with their swap data reporting obligations, under Part 43 and Part 45, with respect to 

interest rate swaps and credit swaps. However, consistent with the Commission’s recognition, in 

establishing the compliance schedule for swap dealers and major swap participants under the 

swap data reporting rules, that commencement of reporting could potentially be more 

challenging with respect to equity swaps, foreign exchange swaps and other commodity swaps, 

the Division believes that it is appropriate to provide financial swap counterparties with a limited 

period of no-action relief to come into compliance with their Part 43 and Part 45 reporting 

obligations with respect to these three swap asset classes. 

Accordingly, the Division will not recommend that the Commission take enforcement action 

against a financial swap counterparty for failing to report swap transaction data with respect to 

equity swaps, foreign exchange swaps and other commodity swaps, pursuant to Part 43 or Part 

45 of the Commission’s regulations, until 12:01 a.m. eastern time on May 29, 2013. 19 As a 

condition of relying on this no-action relief, a financial swap counterparty must, by 12:01 a.m. 

eastern time on June 29, 2013, backload and report to an SDR all swap transaction data, for the 

period from April 10, 2013, to May 29, 2013, that the financial swap counterparty would have 

been required to report pursuant to Part 45 in the absence of this no-action relief.

The Division also believes that providing financial swap counterparties with a transitional time 

period to complete their reporting of historical swaps data pursuant to Part 46, will help to ensure 

the smooth commencement of reporting by financial swap counterparties under the swap data 

reporting rules. Accordingly, the Division will not recommend that the Commission take 

enforcement action against a financial swap counterparty for failing to report historical swaps 

data, for all swap asset classes, pursuant to Part 46 of the Commission’s regulations, until 12:01 

a.m. eastern time on September 30, 2013.

20

 

19 This period of no-action relief is approximately equivalent to the period of no-action relief from reporting 

obligations with respect to equity swaps, foreign exchange swaps and other commodity swaps, that the Division 

provided to swap dealers in the Hurricane Sandy No-Action Letter.

20 Any swap entered into by a financial swap counterparty prior to 12:01 a.m. on April 10, 2013, for which the 

financial swap counterparty has reporting responsibility, will be reportable by the financial swap counterparty in 

accordance with Part 46 of the Commission’s regulations. 
Page 6

No-Action Relief for Non-Financial Swap Counterparties

Consistent with the views expressed by the Commission when allocating reporting

responsibilities under the swap data reporting rules, the Division believes that non-financial swap 

counterparties were likely to have had the least pre-existing technological capability upon which 

to leverage when finalizing their swap data reporting infrastructure. The Division believes that

providing a limited period of no-action relief from reporting obligations under Part 43 and Part 

45, with respect to all swap asset classes, will enable non-financial swap counterparties to

consult further with the SDRs to which they will be reporting data, and with their swap dealer, 

major swap participant and financial swap counterparties, regarding the issues faced and the 

solutions implemented within a “live” reporting environment, so that non-financial swap 

counterparties can leverage off of this experience when finalizing their own reporting systems 

and procedures. 

Accordingly, the Division will not recommend that the Commission take enforcement action 

against a non-financial swap counterparty for failing to report swap transaction data pursuant to 

Part 43 or Part 45 of the Commission’s regulations:

(i) With respect to interest rate swaps and credit swaps, until 12:01 a.m. eastern time on July 

1, 2013, on the condition that, by 12:01 a.m. eastern time on August 1, 2013, the nonfinancial swap counterparty backload and report to an SDR all transaction data, for 

the period from April 10, 2013, to July 1, 2013, that the non-financial swap 

counterparty would have been required to report pursuant to Part 45 in the absence of 

this no-action relief; and

(ii) With respect to equity swaps, foreign exchange swaps and other commodity swaps, until 

12:01 a.m. eastern time on August 19, 2013, on the condition that, by 12:01 a.m. 

eastern time on September 19, 2013, the non-financial swap counterparty backload 

and report to an SDR all transaction data, for the period from April 10, 2013, to 

August 19, 2013, that the non-financial swap counterparty would have been required 

to report pursuant to Part 45 in the absence of this no-action relief. 

Consistent with the relief from reporting obligations under Part 46 that the Division has provided 

herein to financial swap counterparties, the Division believes that providing non-financial swap 

counterparties with a transitional time period to complete their reporting of historical swaps data 

pursuant to Part 46, will help to ensure the smooth commencement of reporting by non-financial 

swap counterparties under the swap data reporting rules. Accordingly, the Division will not 

recommend that the Commission take enforcement action against a non-financial swap 

counterparty for failing to report historical swaps data, for all swap asset classes, pursuant to Part 

46 of the Commission’s regulations, until 12:01 a.m. eastern time on October 31, 2013.21

 

21 Any swap entered into by a non-financial swap counterparty prior to 12:01 a.m. on April 10, 2013, for which the 

non-financial swap counterparty has reporting responsibility, will be reportable by the non-financial swap 

counterparty in accordance with Part 46 of the Commission’s regulations.
Page 7

Conclusion 

The no-action positions taken by the Division herein with regard to financial swap counterparties 

and non-financial swap counterparties, respectively, do not extend to other types of entities with 

reporting obligations under the swap data reporting rules.

22 Any entity that becomes a swap 

dealer or a major swap participant is required to be in full compliance with its reporting 

obligations under the swap data reporting rules by the date upon which it becomes a swap dealer 

or major swap participant.

23

The no-action positions taken by the Division herein in no way affect the recordkeeping 

obligations of non-SD/MSP counterparties under the swap data reporting rules. Records 

regarding any swap entered into by a non-SD/MSP counterparty prior to 12:01 a.m. eastern time

on April 10, 2013, must be maintained by such non-SD/MSP counterparty in accordance with 

Part 46 of the Commission’s regulations. Records regarding any swap entered into by a nonSD/MSP counterparty on or after 12:01 a.m. on April 10, 2013, must be maintained by such nonSD/MSP counterparty in accordance with Part 43 and Part 45 of the Commission’s regulations.

In order to comply with the recordkeeping requirements of Part 45, a non-SD/MSP counterparty 

must, by April 10, 2013, obtain a CFTC Interim Compliant Identifier (“CICI”). 24 

This letter, and the no-action positions taken herein, represent the views of the Division only, and 

do not necessarily represent the positions or views of the Commission or of any other division or 

 

22 See, e.g., Regulation 45.3(a), which requires swap creation data for a swap executed on or pursuant to the rules of 

a swap execution facility or designated contract market to be reported by such swap execution facility or designated 

contract market, as soon as technologically practicable after execution. The obligation of a swap execution facility 

or designated contract market to report swap creation data for swaps executed on a swap execution facility or 

designated contract market is not affected by the no-action relief provided herein. 

23 An entity will become a swap dealer on the earlier of: (i) the date upon which it submits a complete application 

for registration as a swap dealer; or (ii) the date that is two months after the end of the month in which the entity’s 

swap dealing activities exceed, in the aggregate, one of two prescribed gross notional amount thresholds, on which 

date the entity will be required to apply to be registered as a swap dealer. An entity will become a major swap 

participant on the earlier of: (i) the date upon which it submits a complete application for registration as a major 

swap participant; or (ii) the date that is two months after the end of the quarter in which the entity meets the criteria 

of a major swap participant as a result of its swap activities in such quarter, on which date the entity will be required 

to apply to be registered as a major swap participant. See Further Definition of ‘Swap Dealer,’ ‘Security-Based’ 

Swap Dealer,’ ‘Major Swap Participant,’ ‘Major Security-Based Swap Participant,’ and ‘Eligible Contract 

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

24 See Regulatory Reporting Rule at 2204. See also Division of Market Oversight and Office of Data and 

Technology Advisory Regarding Upcoming Legal Entity Identifier Deadline (March 15, 2013), available at

http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/dmo_odtadvisory.pdf; and Division Q & A –

On Start of Swap Data Reporting (October 9, 2012), available at 

http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/startreporting_qa_final.pdf.

A CICI may be obtained through the CICI Utility web portal available at www.ciciutility.org.
Page 8

office of the Commission’s staff. The no-action positions taken herein do not excuse affected 

persons from compliance with any other applicable requirements of the Commodity Exchange 

Act or the Commission’s regulations thereunder. As with all no-action letters, the Division 

retains the authority to condition further, modify, suspend, terminate or otherwise restrict the 

terms of the no-action relief provided herein, in its discretion.

If you have any questions concerning this correspondence, please contact Nora Flood, Attorney 

Advisor, at (202) 418-5354. 

Very truly yours, 

Richard A. Shilts

Acting Director

Division of Market Oversight