- with readers working within the Metals & Mining industries
The CFTC Division of Data issued a no-action letter to provide additional time (a little over six months) to comply with amendments to swap data reporting rules. The letter came in response to a request from ISDA (including three registered swap data repositories) indicating that operational and technological issues were affecting market participants' ability to comply with the amendments.
As previously covered, the amendments made a number of material changes to Parts 43, 45, 46 and 49 of the CFTC Rules. Currently, the amendments have 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 a compliance date of May 25, 2023.
Letter 22-03 provides no-action relief to entities that (i) fail to comply with the amendments before December 5, 2022, and (ii) fail to comply with the block and cap amendments before December 4, 2023, provided that the relevant persons comply with the regulations that were in effect for CFTC Rules Parts 43, 45, 46 and 49 as of January 1, 2021.
CFTC Commissioner Dawn D. Stump supported the no-action relief while also offering criticism of the CFTC's approach to block trade thresholds. Ms. Stump urged the CFTC to request additional information on the thresholds, which she said "were derived without reliable data and without public input." Ms. Stump also urged the CFTC to move forward with substituted compliance determinations for reporting regimes in non-U.S. jurisdictions.
Commentary Nihal Patel
Given the amount of technology involved in making reporting work and the extent of the amendments adopted by the CFTC, it's not entirely surprising to see these compliance dates get (effectively) extended by the staff. It is a positive development that the staff (surely aided by input from market participants) identified and addressed the issue without pushing up against the initial compliance date.
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