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The CFTC has published many letters which, whilst they do not amend Part 20 itself, provide relief to organisations which fail to meet some of its requirements. As the letters tend to be written in a style seemingly designed to obfuscate the details of the relief, a summary of each is provided below. Note however, that Complete Codesmiths specialises in software development, not law. You are strongly encouraged to read the actual text of the letters yourself and reach your own conclusions as to their meaning.
It should be noted that the relief provided by the letters is not legally binding and may be withdrawn at any time. As the Division of Market Oversight (DMO) say in a stock text use regularly: "This letter expresses a staff position with respect to enforcement only and does not purport to state any legal conclusion. This letter and the no-action position taken herein represent DMO’s views, and do not necessarily represent the positions or views of the Commission or of any other Commission division or office. This letter and the no-action position taken herein also are not binding on the Commission." Also, "As with all DMO no-action letters, DMO retains the authority to, in its discretion, further condition, modify, suspend, terminate or otherwise restrict the terms of the no-action relief provided herein."
Many of the letters provide relief to only a subset of the organisations to which the regulation applies. Accordingly, it is important to understand the subsets defined within the regulation itself, and to also understand the additional subsets to which some of the letters apply.
As specified within the regulation itself, Part 20 applies to:
Note that some reporting entities may be swap dealers and clearing members, whilst others may be swap dealers but not clearing members. Some of the letters focus on one or other of these reporting entity subsets. The same is true of some sections of the regulation itself. For example, §20.10(b) refers to "swap dealers that are not clearing members".
There is a further sub-division of "swap dealers that are not clearing members" which applies to organisations "based on resource limitations or lack of experience in reporting transactions to the Commission". Thus sub-class is defined in §20.10(e).
The effective date of the regulation varies by section and by the nature of the organisation. It is summarised below.
| Section | Clearing Organisation | Clearning Member (which may also be a Swap Dealer) | Swap Dealer (but not also a Clearing Member) |
|---|---|---|---|
| §20.3 Clearing organizations | 21-Nov-2011 (cleared swaps) or 20-Jan-2012 (uncleared swaps) [Note 1] | N/A | N/A |
| §20.4 Reporting entities | N/A | 21-Nov-2011 (cleared swaps) or 20-Jan-2012 (uncleared swaps) [Note 1] | 01-Mar 2013 (or 01-Sep-2013) [Note 3] |
| §20.5 Series S filings | N/A | 20-Sep-2011 [Note 2] | 01-Mar 2013 (or 01-Sep-2013) [Note 3] |
| §20.6 Maintenance of books and records | 20-Sep-2011 [Note 2] | 20-Sep-2011 [Note 2] | 20-Sep-2011 [Note 2] |
Notes:
Note that the CFTC didn't define the term "swap" until 13-Aug-2012 (effective date 12-Oct-2012) - see 77 FR 48207 - which further complicated reporting for clearing organisations and clearing members.
| Letter | Dated | Topic | Applies To | Summary | Expires |
|---|---|---|---|---|---|
| 091611 | 16-Sep-2011 | LTR Delay | §20.3 §20.4 |
Provides relief from clearing organisations and clearing members from the reporting requirements of §20.3 (which requires daily reports from clearing organisations) and §20.4 (which requires daily reports from clearing members and swap dealers) respectively. Note that this relief does not apply to swap dealers, who are not required to report as the term "swap dealer" has yet to be defined - see §20.10(b). | 21-Nov-2011 (cleared swaps) 20-Jan-2012 (uncleared swaps) |
| 111811 | 18-Nov-2011 | LTR Delay | §20.3 §20.4 |
Supersedes the 16-Sep-2011 letter. Provides conditional safe harbour for "less than fully compliant reporting" under §20.3 (which requires daily reports from clearing organisations) and §20.4 (which requires daily reports from clearing members and swap dealers). The conditions are that month-end open interest reports must be submitted to the Commission and that an e-mail must be provided describing in what way the reporting is not fully compliant, together with details of the arrangements being made to ensure that it becomes fully compliant and the estimated date by which it will become fully compliant. | 20-Mar-2012 |
| 032012 | 20-Mar-2012 | LTR Delay | §20.3 §20.4 |
Provides conditional no-action relief for less than fully compliant reporting under §20.3 (which requires daily reports from clearing organisations) and §20.4 (which requires daily reports from clearing members and swap dealers). The conditions are the same as the 18-Nov-2011 letter. | 02-Jul-2012 |
| 12-02 | 02-Jul-2012 | LTR Delay | §20.3 | Provides clearing members with conditional no-action relief from complying with §20.4 (which requires daily reports from clearing members and swap dealers) until 27-Jul-2012. The condition is that by 30-Jul-2012 they must have provided fully compliant reports dating back to 02-Jul-2012 (when the relief provided by the 20-Mar-2012 letter expires). | 27-Jul-2012 |
| 12-04 | 17-Jul-2012 | LTR Delay | §20.4 | Provides relief from complying with §20.4 (which requires daily reports from clearing members and swap dealers) until 60 days after "the swap dealer registration application date", as long as the reporting entity is a swap dealer and not also a clearing member, and as long as the swap dealer notifies the CFTC that it is taking advantage of the relief. Note that "the swap dealer registration application date" is defined as “the date by which each person who is a swap dealer must apply to be registered as a swap dealer” - a date which had yet to be determined. It then extends the relief by a further six months for a sub-class of swap dealers (see §20.10(e)), again as long as the swap dealer notifies the CFTC of the reason for requiring the additional six months to become compliant. | "the swap dealer registration application date" + 60 days + (for §20.10(e) swap dealers) 6 months (extended by letter 12-51) |
| 12-46 | 07-Dec-2012 | Masking | §20.4 §20.5 |
Refers to privacy laws in non-US jurisdictions and provides relief from providing the counterparty name (including under §20.4), address (except country, which must still be provided), contact name, contact job title, contact phone and contact e-mail where doing so is precluded by statutory or regulatory prohibition in non-US jurisdictions. The relief only applies if the reporting entity has attempted to obtain consent or regulatory authorization to provide that information, and until that consent or regulatory authorization is obtained. Note that Form 102S filings under §20.5 are still required, as there is no relief from providing country information, although other identifying information (see previous list) may be redacted. | 30-Jun-2013 |
| 12-51 | 14-Dec-2012 | LTR Delay | §20.4 | Clarifies letter 12-04 and press release 6348-12, which responded to questions on timing of swap dealer registration rules. It points out that the final regulations further defining the term "swap" (and hence "swap dealer") became effective on 12-Oct-2012, and then goes on to define a de minimis exception whereby swap dealers which have dealing activities below both of two notional thresholds will not be deemed to be swap dealers. It points out that substituting 12-Oct-2012 into the calculation for relief defined in letter 12-04 gives a date of 11-Dec-2012, or 11-June-2013 for §20.10(e) swap dealers. It then provides additional relief, modifying the compliance date to 01-Mar-2013, or 01-Sep-2013 for §20.10(e) swap dealers. | 01-Mar-2013 (or 01-Sep-2013) |
| 13-41 | 28-Jun-2013 | Masking | §20.4 §20.5 |
Extends the date until the relief detailed in letter 12-46 is available, but only under specific circumstances. The relief applies to the counterparty name in §20.4 submissions and the following fields in §20.5 (Form 102S) filings: counterparty name, address (except country), contact name, contact job title, contact phone and contact e-mail. The relief only applies to counterparties which meet all of the following criteria:
|
30-Jun-2014 |
| 14-89 | 27-Jun-2014 | Masking | §20.4 §20.5 |
Extends the relief granted in letter 13-41 (masking of identifying information due to privacy laws in enumerated jurisdictions) until 16-Jan-2015, subject to all the same terms set out in letter 13-41. Note that the extension relies on previously obtained responses from relevant non-U.S. regulators or governing authorities and does not provide further time with which to make requests or obtain responses. Also note that the despite a request from ISDA, this relief did not modify the Enumerated Jurisdictions to which the relief applied. | 16-Jan-2015 |
| 14-95 | 23-Jul-2014 | OCR Delay | §20.5 | Provides relief from filing New Form 102S (the OCR-style Form 102S) until 11-Feb-2015. Reporting entities are required to continue reporting using Legacy Form 102S (the Excel-style Form 102S). Furthermore, reporting entities are required to cooperate with the Commission's Office of Data Technology to test and implement any systems required to meet the requirements of New Form 102S. | 11-Feb-2015 |
| 15-01 | 08-Jan-2015 | Masking | §20.4 §20.5 |
Extends the relief granted in letter 13-41 (masking of identifying information due to privacy laws in enumerated jurisdictions) until 16-Jan-2016, subject to all the same terms set out in letter 13-41. Note that the extension relies on previously obtained responses from relevant non-U.S. regulators or governing authorities and does not provide further time with which to make requests or obtain responses. Given the introduction of New Form 102S (the OCR-style Form 102S), this letter also defines the set of data elements which may be masked in terms appropriate for New Form 102S. Again, despite the earlier request from ISDA, the list of Enumerated Jurisdictions is not modified by this relief. | 16-Jan-2016 |
| 15-03 | 10-Feb-2015 | OCR Delay | §20.5 | Extends the relief granted by letter 14-95 (filing New Form 102S, the OCR-style Form 102S) until 30-Sep-2015. The same conditions apply, that reporting parties must continue to submit Legacy Form 102S and must cooperate with the Commission's Office of Data Technology to test and implement any systems required to meet the requirements of New Form 102S. | 30-Sep-2015 |
| 15-14 | 23-Mar-2015 | OCR Advise | §20.5 | Reminds clearing members and swap dealers of their obligation to obtain information on a timely basis from their customers or counterparties in order to comply with the ownership and control reports (OCR) final rule. | N/A |
| 15-52 | 28-Sep-2015 | OCR Delay | §20.5 | Extends the relief granted by letter 14-95 (filing New Form 102S, the OCR-style Form 102S) until 27-Apr-2016. The same conditions apply, that reporting parties must continue to submit Legacy Form 102S and must cooperate with the Commission's Office of Data Technology to test and implement any systems required to meet the requirements of New Form 102S. | 27-Apr-2016 |
| 16-03 | 15-Jan-2016 | Masking | §20.4 §20.5 |
Extends the relief granted in letter 13-41 (masking of identifying information due to privacy laws in enumerated jurisdictions), which was most recently extended by letter 15-01, until 01-Mar-2017, subject to all the same terms set out in letter 13-41. However, the CFTC accepts that “the relevant authority may not have an established process for providing advisory guidance to market participants" and so may not be in a position to provide the response that letter 13-41 requires; this letter states that the CFTC will deal with such "rare or unique" situations on a case-by-case basis. The letter discusses changes to the list of Enumerated Jurisdictions (i.e. to the list of jurisdiction for which the relief applies) but do not appear to make an actual changes to that list. In fact, the letter appears to state that the list of Enumerated Jurisdictions is actually owned by ISDA: "Third, ISDA stated that its list of Enumerated Jurisdictions for purposes of its latest request for relief..." and "DMO will permit additional jurisdictions to be included as Enumerated Jurisdictions to the extent all other conditions of the relief are satisfied...". This would imply that as a result of this relief, the additional countries which ISDA requested be added to the list were accepted by the CFTC. These additional countries are (Spain, Romania, Costa Rica, Uruguay, Venezuela and the Philippines. | 01-Mar-2017 |
| 16-32 | 08-Apr-2016 | OCR Delay / Data | §20.5 | Extends the relief granted by letter 15-52 (filing New Form 102S, the OCR-style Form 102S) until 28-Sep-2016. The same conditions apply, namely that reporting parties must continue to submit Legacy Form 102S and must cooperate with the Commission's Office of Data Technology to test and implement any systems required to meet the requirements of New Form 102S.
Also provides relief from the date this general relief ends until 29-Aug-2018 from the specific requirement to provide:
|
28-Sep-2016 (general) 29-Aug-2018 (specific data) |
| 17-16 | 10-Mar-2017 | Masking | §20.4 §20.5 |
Extends the relief provided by letter 16-03 (masking of identifying information due to privacy laws in enumerated jurisdictions) until 01-Sep-2017 for counterparties in France or Switzerland and to the "Reasonable Belief Expiration Date" (the date at which the reporting party no longer has a reasonable belief that reporting identifying information would violate a local statute or regulation) for other jurisdictions previously covered by the relief.
The letter points out that letter 13-41 required that a response from the relevant authority must have been received within 60 days of that letter being issued, and that no such response has been received with respect to Algeria, Argentina, Bahrain, China, India, Pakistan, South Korea or Taiwan. However the letter then states that the condition for such a reply to have been received is no longer a condition of relief. |
01-Sep-2017 and beyond |
| 17-45 | 25-Sep-2017 | OCR Data | §20.5 | Extends the relief provided by 16-32 which allowed reporting parties to identify the consolidated account counterparty in lieu of:
|
28-Sep-2020 |
Several of the letters allow reporting parties to mask identifying information for counterparties in one of the "enumerated jurisdictions" (assuming other conditions also apply). As that list of enumerated jurisdictions changes over time, it can be difficult to maintain a current list. That list is below. As the CFTC has been a little inconsistent with regards to country names (e.g. China vs. People’s Republic of China), we have used the common name below. We have taken no political stance on Taiwan - it is listed below as a separate country solely because the CFTC have done so. Letter 13-41 lists Korea without making is clear whether it is referring to North or South Korea. Given the unlikelihood of counterparties based in North Korea, and given the content of letter 17-16, we have assumed that it refers to South Korea.
| Country | Added By | Effective | Removed By | Effective |
|---|---|---|---|---|
| Algeria | 13-41 | 28-Jun-2013 | ||
| Argentina | 13-41 | 28-Jun-2013 | ||
| Austria | 13-41 | 28-Jun-2013 | ||
| Bahrain | 13-41 | 28-Jun-2013 | ||
| Belgium | 13-41 | 28-Jun-2013 | ||
| China | 13-41 | 28-Jun-2013 | ||
| Costa Rica | 16-03 | 15-Jan-2016 | ||
| France | 13-41 | 28-Jun-2013 | 17-16 | 01-Sep-2017 |
| Hungary | 13-41 | 28-Jun-2013 | ||
| India | 13-41 | 28-Jun-2013 | ||
| Luxembourg | 13-41 | 28-Jun-2013 | ||
| Pakistan | 13-41 | 28-Jun-2013 | ||
| Philippines | 16-03 | 15-Jan-2016 | ||
| Romania | 16-03 | 15-Jan-2016 | ||
| Samoa | 13-41 | 28-Jun-2013 | ||
| Singapore | 13-41 | 28-Jun-2013 | ||
| South Korea | 13-41 | 28-Jun-2013 | ||
| Spain | 16-03 | 15-Jan-2016 | ||
| Switzerland | 13-41 | 28-Jun-2013 | 17-16 | 01-Sep-2017 |
| Taiwan | 13-41 | 28-Jun-2013 | ||
| Uruguay | 16-03 | 15-Jan-2016 | ||
| Venezuela | 16-03 | 15-Jan-2016 |
The list of countries above should be caveated by explaining that, following letter 17-06, it is the responsibility of individual reporting parties to reach their own conclusions with respect to whether or not they believe that providing identifying information would violate a local statute. That belief must be "reasonable".