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CFTC to Address Requirements for Reporting of Pre-Enactment Swaps

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.

© 2020 Bracewell LLP

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About this Author

Christopher D. Olive, Finance, lawyer, Bracewell law firm
Partner

Christopher (Chris) Olive concentrates his practice on loans, structured financings and financial assets, and derivatives and commodities transactions, and related regulatory matters.

Chris represents clients as agents, lenders, participants and borrowers on financing transactions such as revolving and term loan facilities, acquisition, energy and commodity financings, first lien/second lien financings, CMBS loan transactions, securities inventory financings, and loan participation facilities transactions involving the above referenced types of...

214-758-1092
David Perlman, Energy Practice, Partner, Lawyer, Bracewell law firm
Partner

David Perlman is a partner in the energy practice in Bracewell's Washington, D.C. office. He represents and counsels clients before regulatory bodies such as the Federal Energy Regulatory Commission (FERC), Commodity Futures Trading Commission and state public utility commissions in regulatory and compliance matters, in the conduct of compliance programs and training, and in energy-related transactions and financings.

Mr. Perlman represents a variety of clients, including utilities, commodities merchants, marketers, industrial customers, generators, lenders, financial institutions, gas producers and others.

Prior to joining Bracewell, Mr. Perlman was Chief Counsel to Lehman Brothers Commodities business in New York, where he was responsible for legal, transactional and regulatory matters relating to the firm's physical and derivative commodity businesses.  Before this, he was a partner in the energy practice at a major law firm in Washington, D.C.

Mr. Perlman served for two years as Senior Legal Advisor at FERC, where he provided advice regarding significant and complex legal, regulatory policy and legislative issues coming before the Commission. These included matters related to Regional Transmission Organizations (RTO)/Independent System Operators (ISO), gas and electric market oversight, market-based rates and transmission.

Before his government service, Mr. Perlman was counsel to the Constellation Energy Group for 18 years, where he was General Counsel of its merchant and trading businesses and ultimately served as Chief Energy Counsel.  He began his career as an attorney at FERC.

202-828-5804
George Fatula, Energy, Attorney, Bracewell law firm
Partner

George Fatula is a member of the firm's energy practice. He focuses on energy-related transactions, regulatory matters, projects and controversies.

Mr. Fatula advises clients on a variety of transactional and project development matters involving natural gas, NGLs, and oil. He is active in advising natural gas, oil and liquids pipeline project developers in negotiating terms of service and navigating the regulatory and approval process for the development of new and repurposed pipeline infrastructure projects before FERC and other regulatory...

202-828-5819