Swap data repositories (“SDRs”) are new entities created by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) in order to provide a central facility for swap data reporting and recordkeeping. Under the Dodd- Frank Act, all swaps, whether cleared or uncleared, are required to be reported to registered SDRs. The Dodd-Frank Act added new Section 21 to the Commodity Exchange Act (“CEA”), governing registration and regulation of SDRs and establishing registration requirements and core duties and responsibilities for SDRs. The Commission, in turn, has promulgated the Part 49 regulations implementing Section 21. SDRs are required to register with the CFTC and comply with rules promulgated by the CFTC, including real-time public reporting of swap transaction and pricing data.
How to Become a Registered Swap Data Repository
Any entity that seeks to perform the functions of a SDR by any means or instrumentality of interstate commerce must apply to the Commission to be registered as a SDR. Procedures and requirements for registration as a SDR are set forth in Section 21 of the CEA, 7 USC § 24a, and Part 49 of the CFTC’s regulations. These regulations, in addition to Form SDR (contained within Appendix A), list specific requirements for applicants seeking to become registered as SDRs.
Applications should be filed with the CFTC electronically at [email protected] Additional questions may be submitted by contacting the Division of Market Oversight’s Exchange and Data Repository Branch.
Draft applications for SDR registration will not be accepted for review. Potential applicants are encouraged to carefully review the Swap Data Repository FAQs the Commission’s regulations and Form SDR prior to submission of a formal application. The Commission will review an application for registration within a 180-day time frame. The Commission will approve or deny the application or, if deemed appropriate, register the applicant as a SDR subject to conditions.
Ongoing Compliance with Core Principles and Regulations
To obtain and maintain its registration, a SDR must comply on an initial and continuing basis with the three core principles established in Section 21(f) of the CEA, 7 USC 24a, and Part 49 of the CFTC’s regulations.
- Antitrust considerations
- Governance arrangements
- Conflicts of interest
Section 728 of the Dodd-Frank Act authorized the CFTC to prescribe additional duties for SDRs. The Commission established regulations pursuant to the authority in section 21(f)(4)governing:
- Financial resources
- Disclosure requirements
- Non-discriminatory access and fees
The Division of Market Oversight’s Examinations Branch conducts regular reviews of each SDR’s ongoing compliance with core principles through the self-regulatory programs operated by the SDR in order to enforce its rules, and ensure the safe storage of trade information. These reviews are known as rule enforcement reviews (RERs).
Swap Data Repository Filings
A SDR may implement new rules or rule amendments under Part 40, either by (1) filing with the CFTC, under regulation 40.6, a certification that the rule or rule amendment complies with the CEA and the CFTC regulations; or (2) by requesting approval from the CFTC under regulation 40.5. SDRs may also submit requests that the CFTC take action on a number of other issues, including requesting no-action relief, interpretations, or guidance on particular issues.
Swap Data Repository Annual Amendments & Ongoing Reports
Registered SDRs are required to submit an annual amendment on Form SDR to be filed within 60 days of the end of each fiscal year. This amendment should detail any changes to the information previously filed on Form SDR and exhibits or affirm that items have remained unchanged.
Registered SDRs are also required to submit an annual compliance report electronically to the Commission not more than 60 days after the end of the registered SDR’s fiscal year, concurrently with the filing of the Annual Amendment to Form SDR.
Registered SDRs must also provide the Commission with quarterly financial statements as required by the Commission.
Withdrawal from Registration
A SDR may withdraw its registration by giving written notice of a request to withdraw at least 60 days prior to the desired effective date of the withdrawal. Prior to filing a request, the SDR must file an amended Form SDR with updates to any inaccurate information.