SWAPS—CFTC provides no-action relief for compliance with swap data reporting rule amendments - 04 February 2022

The no-action position effectively adds approximately six months to compliance dates for the 2020 amendments to the swap data reporting regulations.

The CFTC's Division of Data issued a no-action letter extending the compliance dates for the 2020 amendments to the swap data reporting rules. The rule amending regulations concerning the swap data recordkeeping and reporting requirements for swap data repositories has a compliance date of May 25, 2022, except for certain block and cap amendments to CFTC Regulations 43.4(h) and 43.6, which have until May 25, 2023. The DOD will not recommend enforcement action against an entity for failure to comply with the amendments before December 5, 2022, or December 4, 2023 for the block and cap amendments. The entity must comply, however, with the regulations that were in effect for Parts 43, 45, 46, and 49 on January 1, 2021.

Reporting requirements amendments. The International Swaps and Derivatives Association, Inc. and its member firms sought no-action relief with respect to certain requirements of the swap data reporting rules. The letter asks the DOD to confirm that it would not recommend enforcement action for failure to comply with the 2020 amendments to Parts 43, 45, 46 and 49 of the Commission's regulations. The rules, issued in September 2020, amend the real time reporting requirements and the regulations relating to swap data repository and data reporting requirements. The amendments went into effect on January 25, 2021. The compliance date is May 25, 2022, but amendments to regulation 43.4(h) (Post-initial cap sizes) and regulation 43.6 (Block trades and large notional off-facility swaps) have a compliance date of May 25, 2023.

No-action request. The ISDA said that needed additional time to overcome operational and technological issues. Specifically, the member firms need more time to develop their final message specifications to include changes made to Technical Specifications issued concurrently with the amendments and to account for changes currently being made to the SDR Guidebooks. Lacking the final message specifications, the member firms have not yet begun to build and test their swaps reporting systems. The letter requests a no-action position with respect to compliance with the amendments until December 5, 2022, and with the Block and Cap Amendments until December 4, 2023.

In granting the request, the DOD noted that the operational and technological issues caused by the changes to the Technical Specification would not be resolved by the May 25, 2022 compliance date. Accordingly, the Division will not recommend the Commission commence an enforcement action against an entity for failure to comply with the amendments before December 5, 2022, and for failure to comply with the block and cap amendments before December 4, 2023, provided that the entity complies with the Parts 43, 45, 46, and 49 regulations that were in effect on January 1, 2021.

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