The U.S. Commodity Futures Trading Commission (CFTC) unanimously approved proposed changes to swap data rules that implement Congressional action to remove indemnification requirements for the use of swap data by other regulators.
In a separate proposal, the Commission voted to update Parts 3 and 9 to integrate existing advisory guidance, incorporate swap execution facilities (SEFs), and update provisions currently applicable to designated contract markets (DCMs). The comment period will be open for 60 days after publication in the Federal Register. All comments will be posted on the Commission’s website.
Proposed Rule to Amend Part 49 (Data Rules)
Specifically, the proposal removes the requirement originally contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act that foreign and domestic authorities seeking swap data from SDRs first indemnify the Commission and each SDR from which such authorities receive swap data.
The so-called indemnification clause was repealed by Congress on December 3, 2015. The proposal will also permit domestic regulators to access SDR swap data by entering into a confidentiality arrangement with the Commission, but will require other domestic authorities, and all foreign authorities, to be determined by the Commission to be “appropriate” recipients of such swap data.
In each case, certain other conditions to accessing swap data must also be satisfied, and both foreign and domestic regulators must be acting within the scope of their jurisdiction in seeking access to SDR swap data. In addition, the proposal will make associated changes to certain other Part 49 regulations unrelated to such swap data access.
Proposed Rule to Amend Commission Regulations under Part 3 and Part 9
Part 3 governs registration and Part 9 details the rules relating to review of exchange disciplinary, access denial or other adverse actions. The amendments to Parts 3 and 9 will integrate existing advisory guidance and the Part 9 amendments will also incorporate SEFs and update provisions currently applicable to DCMs.
The proposal revises existing Part 9 rules to delete numerous cross-references to previously deleted Part 8 regulations, and adds citations to applicable parallel provisions contained in Part 37 for SEFs and Part 38 for DCMs. Part 8 was removed by the Commission during implementation of the Dodd-Frank Act.
Additionally, the proposal will require the publication of final disciplinary and access denial actions taken by the SEFs and DCMs on their exchange websites.