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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. 14-90

No-Action

June 30, 2014

Division of Market Oversight

Re: Further Extension of Time-Limited No-Action Relief for Swap Dealers and Major 

Swap Participants from Compliance with Reporting Obligations Under 17 CFR § 

45.4(b)(2)(ii)

On December 17, 2012, the Division of Market Oversight (“DMO” or “Division”) of the 

Commodity Futures Trading Commission (the “Commission”) granted time-limited no-action 

relief from certain requirements of section 45.4 of the Commission’s regulations to Swap 

Dealers (“SDs”) and Major Swap Participants (“MSPs”) acting as reporting counterparties for 

swap transactions.1 In particular, DMO granted a request from the International Swaps and 

Derivatives Association, Inc. (“ISDA”),2on behalf of its members that intend to register as SDs 

or MSPs, and other similarly situated persons, for no-action relief from enforcement action 

against SDs and MSPs acting as reporting counterparties for cleared swaps that fail to comply 

with the regulation 45.4(b)(2)(ii) valuation data reporting requirements. The initial no-action 

relief was scheduled to expire on June 30, 2013. Subsequently, the Division extended the initial 

period of relief to June 30, 2014.3 This letter further extends the no-action relief period to June

30, 2015.

Applicable Regulatory Requirements

The Dodd-Frank Wall Street Reform and Consumer Protection Act4(the “Dodd-Frank 

Act”) added to the Commodity Exchange Act5 (the “CEA”) provisions requiring the retention 

and reporting of data related to swap transactions. New section 2(a)(13)(G) of the CEA requires 

 

1

CFTC Letter No. 12-55 (December 17, 2012).

2

ISDA submitted its request for no-action relief pursuant to Commission regulation 140.99 by letter on December 

13, 2012.

3

CFTC Letter No. 13-34 (June 26, 2013).

4

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

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7 U.S.C. §§ 1, et seq.
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that all swaps, both cleared and uncleared, be reported to a registered swap data repository

(“SDR”). New section 21(b) of the CEA directs the Commission to prescribe standards for swap 

data recordkeeping and reporting.

The Commission published final rules under part 45 of the Commission’s regulations on 

January 13, 2012.6 The rules implement the provisions of the CEA pertaining to swap data 

recordkeeping and reporting obligations. Among other requirements, the final part 45 

regulations call for electronic reporting to an SDR of swap data from each of two relevant stages 

of the existence of a swap: the creation of the swap and the continuation of the swap over its 

existence until its final termination or expiration.

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Regulations 45.4(b)(2)(i) and (ii) require that swap valuation data for any particular 

cleared swap be reported to the SDR by both the derivatives clearing organization (“DCO”) that 

clears the swap and the reporting counterparty to the cleared swap, if the reporting counterparty 

is an SD or MSP. The obligation of the DCO to provide valuation data for the cleared swap 

under regulation 45.4(b)(2)(i) is independent of the obligation of the SD or MSP to provide 

valuation data for the same cleared swap under regulation 45.4(b)(2)(ii).

Further Extension of Time-Limited No-Action Relief

SDs and MSPs continue to raise concerns that they do not currently have the necessary 

connectivity to report valuation data as set forth in regulation 45.4(b)(2)(ii) to all SDRs to which 

they would need to report. As a result, ISDA submitted a request to further extend the no-action 

relief already granted in letters 12-55 and 13-34.8The Division has accepted the assertions 

contained in ISDA’s requests without independent analysis, and accordingly, advises that this 

relief continue to apply to all registered SDs and MSPs. 

Based on SD and MSP concerns, the representations ISDA made in its initial request for 

no-action relief, and ISDA’s request for extension, the Division will not recommend that the 

Commission take enforcement action against an SD or MSP for the failure of such SD or MSP to 

comply with the requirements of regulation 45.4(b)(2)(ii) to report valuation data, subject to the 

following conditions:

(1) The no-action relief applies to SDs and MSPs that are reporting counterparties under 

regulation 45.8, for the purposes of regulation 45.4(b)(2)(ii).

(2) The no-action relief applies to cleared swaps for which the reporting counterparty has the 

obligation to report valuation data under regulation 45.4(b)(2)(ii).

 

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76 Fed. Reg. 2197 (Jan. 13, 2012).

7 Required swap creation data means all primary economic terms (“PET”) data and all confirmation data for a swap. 

Required swap continuation data means all changes to PET data and all valuation data. See 17 C.F.R. § 45.1.

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ISDA Letter “Request for Division of Market Oversight Staff No-Action Letter Pursuant to CFTC Regulation 

140.99: Valuation Data Reporting for Cleared Swaps (Part 45.4(b)(2)(ii))” (February 12, 2014).
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(3) The no-action relief shall expire on June 30, 2015.

The position taken herein concerns DMO staff recommendation of enforcement action 

only and does not represent a legal conclusion with respect to the applicability of any provision 

of the CEA or the Commission’s regulations.9 The no-action position taken herein does not 

excuse the recipients of this relief from compliance with any other applicable requirements of the 

Commodity Exchange Act or the regulations thereunder. In addition, the Division’s position 

does not necessarily reflect the views of the Commission or any other division or office of the 

Commission. Because this position is based upon the representations contained in the Letter, it 

should be noted that any different, changed, or omitted material facts or circumstances may 

require a different conclusion or render this no-action letter void. Finally, 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 the content of this staff no-action letter, please

contact Ben DeMaria, Attorney Advisor, Division of Market Oversight at (202) 418-5988 or 

bdemaria@cftc.gov.

Sincerely,

Vincent McGonagle

Director

Division of Market Oversight

 

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Should the Commission promulgate additional swap data reporting rules applicable to the subject matter covered 

herein during the pendency of this no-action relief period, such rules could supersede the no-action relief granted 

herein.