Swaps End-User Update: Temporary Relief from Swap Data Reporting Requirements for End-Users of Swaps

Temporary Relief from Swap Data Reporting Requirements for End-Users of Swaps

April 10, 2013

The following is a brief update for our clients and friends who are end-users of swaps.

On Tuesday, April 9, 2013, the Division of Market Oversight (DMO) of the Commodity Futures Trading Commission (CFTC) announced that swap counterparties that are not swap dealers or major swap participants (“non-SD/MSP counterparties,” sometimes referred to as “end-users”) will have a temporary reprieve from complying with certain of the CFTC’s swap data reporting rules. Those rules, under Parts 43, 45 and 46 of the regulations under the Commodity Exchange Act (CEA Regulations), originally established an April 10, 2013 compliance date for end-users. The relief period varies based on the type of swap counterparty and the type of swap.

Temporary relief for non-financial swap counterparties

The temporary relief means that non-SD/MSP counterparties that are not “financial entities” (non-financial swap counterparties) can delay real-time public reporting of swap transaction data and swap data reporting (under Parts 43 and 45 of the CEA Regulations):

  • for interest rate and credit swaps, until July 1, 2013; and
  • for equity, foreign exchange and other commodity swaps, until Aug. 19, 2013.

In addition, non-financial swap counterparties are not required to report swap data for historical swaps (under Part 46 of the CEA Regulations) until Oct. 31, 2013.

Temporary relief for financial swap counterparties

The DMO also provided temporary reporting relief for non-SD/MSP counterparties that are “financial entities” (financial swap counterparties). Financial swap counterparties still must commence Part 43 (real-time public reporting of swap transaction data) and Part 45 (swap data reporting) reporting for interest rate and credit swaps no later than April 10, 2013. However, reporting is delayed under:

  • Parts 43 and 45 for equity, foreign exchange and other commodity swaps, until May 29, 2013; and
  • Part 46 (historical swap data) for all swap asset classes, until Sept. 30, 2013.

Transition period and other matters

All non-SD/MSP counterparties will have a one-month transition period after the applicable relief period ends to backload and report all the swap transaction data they otherwise would have been required to report for the relief period.

The reporting relief does not extend to other types of entities with reporting obligations under the swap data reporting rules (e.g. swap execution facilities and designated contract markets) and does not affect the recordkeeping obligations of non-SD/MSP counterparties.

You can find a copy of the announcement here, and a copy of the no-action letter here.

Please contact one of the authors, or your regular McGuireWoods lawyer, if you have any questions regarding the scope, conditions or application of the no-action relief.