April 10, 2013 is a critically-important date for reporting-related compliance with United States over-the-counter (OTC) derivatives regulations

All swap counterparties under the regulatory jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC) need to be aware that by April 10, 2013, each party trading an OTC swap will need a legal entity identifier (LEI), currently known as a CFTC Interim Compliant Identifier (CICI).

Many market participants have already obtained a CICI, but the CFTC has reminded the market in a recent advisory that for CICIs previously issued through third-party registration, each party entering into an OTC derivative (i.e., a Swap) must self-certify the CICI data record before April 10, 2013. Entities that obtain CICIs through self-registration or assisted registration with permission do not need to also self-certify their CICIs, according to the CFTC. There are also periodic recertification requirements.

Each swap counterparty should visit www.ciciutility.org, check its CICI status, and self-register for a CICI or self-certify its third-party-registered CICI as needed. In addition, swap dealers (Swap Dealers) should contact each of their counterparties regarding CICIs and remind them to obtain a CICI before the April 10.

As background, the CFTC was charged by The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) to implement rules designed to bring about greater transparency to the OTC derivatives market in the United States. Many non-US market participants have increasingly become subject to final rules promulgated by the CFTC and the April 10th reporting deadline is among the first to apply, insofar as non-US market participants enter into a Swap with a US counterparty, trade on an exchange regulated by the CFTC or otherwise become subject to the jurisdiction of the CFTC. This all began on July 21, 2010, when Dodd-Frank was signed into law.

Section 727 of Dodd-Frank amended the Commodity Exchange Act to add Section 2(a)(13), which requires real-time reporting and public availability of certain Swap trade data to be reported to a repository (Swap Data Repository or SDR). Swap reporting is currently underway and leading SDRs are providing public access to trade data required under Section 727 of Dodd Frank. As with many other requirements in Dodd-Frank, the effective dates of reporting requirements are driven by the asset class of the Swap to be reported:

  • October 12, 2012 (where Swap Dealers or Major Swap Participants are the parties to the Swap, trade data was required from this date onward to be reported to a Swap Data Repository) January 10, 2013 (for other Swaps, including currency and equity transactions, where Swap Dealers or Major Swap Participants are the parties to the Swap)
  • April 10, 2013 (for parties who are not Swap Dealers or Major Swap Participants, one must still report trades under CFTC rules and information like CICIs need to be provided to Swap Dealers or Major Swap Participants by this date and going forward).