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CFTC to Address Requirements for Reporting of Pre-Enactment Swaps
Monday, September 27, 2010

On October 1, 2010, the Commodity Futures Trading Commission (CFTC) will conduct a public meeting to discuss the issuance of an "Interim Final Rule" requiring the reporting of "pre-enactment" swaps (swaps that were entered into prior to July 21, 2010, the date of enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act). While the scope of the data to be required is not yet clear, it is clear that the reporting of certain pre-enactment swaps is required by Section 729 of Title VII of Dodd-Frank. As the statute mandates action on the Interim Final Rule by October 18, the CFTC is acting to implement the requirement.

Under § 729 of Dodd-Frank, swaps entered into before the date of enactment of Dodd-Frank and remaining unexpired on that date must be reported to a Registered Swap Data Repository (a centralized record keeping facility for swaps) or to the CFTC. These reports must be made within either (i) thirty days after the CFTC issues an Interim Final Rule on the subject; or (ii) such other date as the CFTC may determine. It is unclear whether the CFTC intends to unveil a Notice of Proposed Rulemaking on October 1, or whether it will issue the actual Interim Final Rule on that date. Given the statutory timeline the reporting of pre-enactment swaps may be required as early as mid-November 2010, with the issuance of an Interim Final Rule no later than the first half of October. Dodd-Frank requires the CFTC to promulgate the Interim Final Rule no later than ninety days after enactment (October 18, 2010).

Given the fact that terms including "swap" remain to be finally defined by the CFTC and the Securities and Exchange Commission, and that no Registered Swap Data Repositories exist, it is difficult to predict the contours and timing of the upcoming reporting requirements. All entities, including companies hedging commodity, interest rate, currency or other price exposure who were or remain parties to swaps in effect on July 21, 2010, should be aware of the impending reporting requirements and be prepared to move promptly to file required reports. The CFTC will provide more details beginning on October 1.

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