Commodity Futures Trading Commission.
Final rule; correction.
The Commodity Futures Trading Commission (“CFTC” or “Commission”) published the Real-Time Public Reporting of Swap Transaction Data (“Real-Time Public Reporting”) rule and an accompanying preamble in the
Nancy Markowitz, Deputy Director, 202–418–5453, nmarkowitz@cftc.gov, Laurie Gussow, Attorney-Advisor, 202–418–7623,
The Commission published the final rule entitled
The Commission received inquiries whether it considered all “covered transactions” between affiliates, as defined in Sections 23A and 23B of the Federal Reserve Act
Section 43.2 defines the term “publicly reportable swap transaction,” and also provides an example of certain swap transactions that do not fall within the definition. Under § 43.2, in paragraph (2)(i) of the definition of “publicly reportable swap transaction,” certain inter-affiliate trades may not be reportable as the rule excludes from the definition of reportable swap transactions: “Internal swaps between one hundred percent owned subsidiaries of the same parent entity.” Paragraph (3) of the definition states that the examples of transactions set forth paragraph (2) of the definition that do not fall within the publicly reportable swap transaction definition “represent swaps that are not at arm's length and thus are not publicly reportable swap transactions, notwithstanding that they do result in a corresponding change in the market risk position between two parties.” Indeed, there may be covered transactions as defined in Sections 23A and 23B of the Federal Reserve Act that are not at “arm's length” transactions under Part 43, but which nevertheless result in a corresponding change in market risk between the two parties. Under § 43.2, those types of covered transactions would not be “publicly reportable swap transactions.”
Further, correction of the footnote 44 sentence will remove any conflict with the preamble language. The preamble language immediately preceding the footnote states: “As adopted, the definition of a publicly reportable swap transaction also provides, by way of example, that internal transactions to move risk between wholly-owned subsidiaries of the same parent, without having credit exposure to the other party would not presently require public dissemination because such swaps are not arm's-length transactions.” Again, there may be covered transactions as defined in Sections 23A and 23B of the Federal Reserve Act that may be internal transactions to move risk between wholly-owned subsidiaries of the same parent, without having credit exposure to the other party. Those transactions thus do not require public dissemination because they are not arm's-length transactions.
Accordingly, this document revises the language of the last sentence of footnote 44 on page 1187 of the
For compliance purposes, this correction of the footnote sentence will result in a more accurate reflection of the regulatory language that the determination of whether a covered transaction under Section 23A or 23B of the Federal Reserve Act is a publicly reportable swap transaction should be made by the parties to the swap, rather than the Commission. In turn, the Commission's review of such determination will be based upon the standards as set forth in § 43.2.
In FR Doc. 2011–33173 appearing on page 1182 in the
On page 1187, revise the last sentence of footnote 44 to read, “Certain covered transactions between affiliates as described in Sections 23A and 23B of the Federal Reserve Act may be considered to be publicly reportable swap transactions.”