On December 20, 2011, the Commodity Futures Trading Commission approved final rules on swap data recordkeeping and reporting requirements for swap data repositories (SDRs), derivatives clearing organizations (DCOs), designated contract markets (DCMs), swap execution facilities (SEFs), swap dealers (SDs), major swap participants (MSPs), and swap counterparties that are neither swap dealers nor major swap participants (non-SD/MSP counterparties).
Under the final rules, DCOs, DCMs, SEFs, SDs, MSPs, and non-SD/MSP counterparties must keep records throughout the existence of a swap and for five years following the termination of the swap. SDRs will be required to keep records throughout the existence of the swap and for fifteen years following termination of the swap.
The final rules require electronic reporting to an SDR of specified swap data at the time of the creation of the swap (swap creation data), as well as over the life of the swap until its final termination or expiration (swap continuation data).
Swap creation data includes information regarding all primary economic terms and confirmations for the applicable swap. If a swap is executed on a SEF or DCM, all required creation data is to be reported by the SEF or DCM. For all other swaps, the required data will be reported by either the applicable DCO (for swaps accepted for clearing within the applicable reporting deadline) or the reporting counterparty.
Swap continuation data includes all changes to primary economic terms and all valuation data. Continuation data for cleared swaps will be reported by the DCO, but valuation data will be required to be reported by SD and MSP reporting counterparties. Continuation data for uncleared swaps will be reported by the reporting counterparty.
The final rules will be phased in by asset class and counterparty type. First, the compliance date for SEFs, DCMs, DCOs, SDs, MSPs, and SDRs with respect to credit swaps and interest rate swaps will be the later of July 16, 2012 or 60 days after adoption by the CFTC and by publication in the Federal Register of the definitions of “swap,” “swap dealer,” and “major swap participant” (the Initial Compliance Date). The compliance date for such entities and counterparties with respect to equity swaps, foreign exchange transactions, and other commodity swaps is 90 calendar days after the Initial Compliance Date established for credit and interest rate swaps. Finally, the date on which non-SD/MSP counterparties must comply with respect to swaps in all asset classes is 180 calendar days after the Initial Compliance Date.
A copy of the final rules is available here. The final rules will be effective 60 days after publication in the Federal Register.