March 20, 2012

U.S. COMMODITY FUTURES TRADING COMMISSION

Three Lafayette Centre

1155 21st Street, NW, Washington, DC 20581

Telephone: (202) 418-5260

Facsimile: (202) 418-5527

www.cftc.gov

Division of

Market Oversight

Staff No-Action Relief: Temporary and Conditional Relief from the Requirements 

of §§ 20.3 and 20.4 of the Commission’s Regulations Regarding Large Swaps Trader 

Reporting for Physical Commodities

On July 22, 2011, the Commission published large trader reporting rules for physical 

commodity swaps and swaptions (“swaps”). 76 FR 43851. The rules are codified in new Part 20 

of the Commission’s regulations and became effective on September 20, 2011. Section 20.3 of 

the reporting rules requires daily reports from clearing organizations. Section 20.4 of the 

reporting rules requires daily reports from clearing members and swap dealers (“reporting 

entities”). Section 20.7 provides that unless otherwise instructed by the Commission, a clearing 

organization or reporting entity shall submit data records and any other information required by 

the reporting rules using the format, coding structure, and electronic data transmission 

procedures approved in writing by the Commission. Section 20.8(a)(4) delegates to the Director 

of the Division of Market Oversight (“DMO” or “Division”) the authority for determining the 

format, coding structure, and electronic data transmission procedures for Part 20 reports.

On September 16, 2011, the Division issued a letter under Section 20.10(c) to relieve 

clearing organizations and clearing members as a class from the reporting requirements of 

Sections 20.3 and 20.4 until November 21, 2011 for cleared swaps, and January 20, 2012 for 

uncleared swaps. On November 18, 2011, the Division issued a second letter under Section

20.10(c) to establish a safe harbor for less than fully compliant reporting under Sections 20.3 and 

20.4 until March 20, 2012. The safe harbor has allowed reporting parties to provide less than 

fully compliant reports to the Commission in an interim text-based format to facilitate the 

transition to fully compliant reporting under Part 20. The safe harbor has been conditioned on 

the submission of month-end open interest reports to the Commission for September 2011 

through February 2012, as well as the submission of an e-mail describing how the submitted 

reports vary from fully compliant reports, arrangements being made to reach full compliance, 

and the anticipated date of full compliance. Under the terms of Section 20.10(c), the Division 

cannot extend relief from full compliance with Sections 20.3 and 20.4 beyond March 20, 2012.

 Division and Office of Data and Technology (“ODT”) staff has been actively engaged 

in ongoing compliance and implementation discussions with clearing organizations, clearing 

members, potential swap dealers, and data service providers, separately and through the 

International Swaps and Derivatives Association and the Futures Industry Association. The 

Division believes that the participants in these discussions are representative of the parties that 

will be subject to the reporting rules. 

The Division also believes that substantial progress has been made towards finalizing 

reporting guidance and an XML-based reporting format and record layout, and facilitating the 
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ability of reporting parties to comply with such guidance and format requirements. The Division 

has, with substantial participation from ODT, developed and publicly distributed a guidebook for

Part 20 reports to provide reporting guidance. 

Notwithstanding the substantial progress that has been made, concerns have been raised 

regarding the ability of market participants to submit fully compliant reports under Part 20 by 

March 20, 2012. In light of these concerns, the Division will not recommend that the 

Commission commence an enforcement action against clearing organizations or clearing 

members for failure to submit fully compliant reports during the period from March 20, 2012 to 

July 2, 2012, assuming satisfaction of the conditions described below. This no-action relief will 

automatically expire on July 2, 2012. Reporting parties that can readily file fully compliant 

Section 20.3 and 20.4 reports cannot rely or continue to rely on the relief described herein. 

As a condition of this relief, reporting parties must make a good faith attempt to comply 

with the requirements of Part 20. Good faith will be demonstrated through the filing of 

otherwise fully compliant reports in an interim pipe-delimited text format in which the “|”

character is placed between each data field, or the filing of less than fully compliant reports in a 

pipe-delimited text or XML-based format, as prescribed by the Division. Submitted reports may 

be prepared and submitted by clearing organizations or data vendors on behalf of reporting 

entities. The primary responsibility for compliant reporting, however, remains with the reporting 

entities, irrespective of their use of third-party service providers. 

As a further condition of this relief, clearing organizations for cleared swaps and 

reporting entities for cleared and uncleared swaps are required to provide open interest data for 

positions as of each month-end during the entire relief period, beginning on March 1, 2012, and 

ending on June 30, 2012. Such data must be submitted for each month no later than the fifteenth 

day of the following month (e.g., no later than April 15 for March month-end data). Submitted 

open interest data must be reported on a futures equivalent basis in terms of the contracts listed 

in Section 20.2 of the reporting rules. The open interest data, which shall be submitted in the

pipe-delimited text format prescribed by the Division, must allow the Commission to readily 

identify and distinguish swaps by: (1) the identifier assigned by a clearing organization for a 

cleared product; and (2) the commodity reference price position type indicator as described by 

the Division in writing. Open interest attributable to uncleared swaps must also be separated by 

the counterparty to such swaps and reported as prescribed. 

Any reporting party that intends to rely on this relief must submit an e-mail to the 

Division at submissions@cftc.gov and SwapsLTR@cftc.gov, no later than March 30, 2012, 

describing with specificity: (1) ways in which the submission is not compliant with the data field 

requirements of Sections 20.3 and 20.4, (2) the arrangements that are being made for coming into 

compliance with such requirements, and (3) the anticipated date of full compliance with the 

requirements of Part 20 as prescribed by the Division. 

Nothing in this letter alters the Section 20.10(b) compliance date for potential swap 

dealers that are not clearing members. The effective date for such entities is tied to the effective 

date of a final Commission regulation further defining the term swap dealer. In addition, nothing 

in this letter should be interpreted as altering the implementation schedule of Part 151 of the 
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Commission’s regulations. Finally, the Division reminds the public that other applicable 

provisions of Part 20, including the special call provision of Section 20.5(b) and the books and 

records requirements of Section 20.6, became effective on September 20, 2011.

The no-action position taken herein is taken by the Division only and does not bind the 

Commission or any other Division or Office of the Commission's staff. 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 regarding the content of this staff no-action letter, please 

contact Ali Hosseini at ahosseini@cftc.gov or (202) 418-6144. 

Sincerely,

Richard A. Shilts

Director

Division of Market Oversight