On December 20, 2011, the Commodity Futures Trading Commission approved final rules governing real-time public reporting of swap transaction data. The final rules cover all interest rate, credit, equity, foreign exchange and “other commodity” swaps, regardless of the method of execution or whether such swaps are cleared.

Although the final rules are substantially similar to the proposed rules, there are a few notable revisions. Among other things, the final rules provide a different definition for “publicly reportable swap transaction” and provide time delays for the public dissemination of swap transaction and pricing data. Further, all swap transaction and pricing data must be reported to an SDR, regardless of whether the swap is executed on a regulated trading platform or bilaterally. Because the proposed recordkeeping requirements are duplicative of other proposed CFTC regulations, the final rules remove all other recordkeeping requirements except for recordkeeping requirements relating to timestamps. Lastly, the final rules do not require the public dissemination of publicly reportable swap transaction data in the “other commodity” asset class if those transactions are not executed on a SEF or DCM and listed in Appendix B to the CFTC’s Part 43 rules (which is expected to be a subject of a future CFTC rulemaking).

“Publicly reportable swap transactions” include (1) any swap that is an arm’s-length transaction between two parties that results in a corresponding change in the market risk position between the two parties; or (2) any termination, assignment, novation, exchange, transfer, amendment, conveyance, or extinguishing of rights or obligations of a swap that changes the pricing of a swap. If a publicly reportable swap transaction is executed on or pursuant to the rules of a SEF or DCM, the SEF or DCM is responsible for reporting the swap transaction and pricing data to the appropriate SDR for public dissemination. In other cases, the parties to the transaction are required to report to the appropriate SDR as follows (unless the parties agree otherwise prior to execution):

  • If only one party is a SD or MSP, the SD or MSP must report.
  • If one party is a SD and the other party is a MSP, the SD must report.
  • In all other situations, the parties must designate which party should report.

Generally, swap transaction and pricing data must be reported to a SDR as soon “as technologically practicable” after execution; that data must, in turn, be publicly disseminated by the SDR “as soon as technologically practicable” after receipt (each as further described in the CFTC rules).

A copy of the final rules is available here. The final rules will be effective 60 days after publication in the Federal Register.