Swap Documentation

Section 731 of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act, Pub L. No. 111-203, 124 Stat. 1376 (2010)) amended the Commodity Exchange Act (CEA) by adding sections 4s(f), 4s(g), and 4s(i), among others. Pursuant to this authority, the Commission promulgated regulations 23.500-23.505, which obligate swap dealers and major swap participants to develop and retain written swap trading relationship documentation. The final regulations also establish requirements for swap dealers and major swap participants regarding swap confirmation, portfolio reconciliation, and portfolio compression. Confirmation, portfolio reconciliation, and portfolio compression are important, post-trade processing mechanisms for reducing risk and improving operational efficiency. Under the regulations, swap dealers and major swap participants are obligated to maintain records of the policies and procedures required by the rules. Swap dealers and major swap participants also are required to maintain records of their swap trading relationship documentation; acknowledgements and confirmations for swap transactions; portfolio reconciliations; and portfolio compression exercises. The final regulations are essential to ensuring that swap dealers and major swap participants document their swaps, reconcile their swap portfolios to resolve discrepancies and disputes, and wholly or partially terminate some or all of their outstanding swaps through regular portfolio compression exercises. This ICR relates to Brexit and adds an information collection (IC) to the OMB Control No. The United Kingdom (UK) has provided formal notice of its intention to withdraw from the European Union (EU). This may happen as soon as April 12, 2019. This withdrawal may transpire without a negotiated agreement between the UK and EU (No-deal Brexit). To the extent this event occurs, affected SDs and MSPs may be involved in transfers of certain uncleared swaps, including uncleared swaps that were entered into before the relevant compliance dates under the CFTC Margin Rule or the Prudential Margin Rule and that, therefore, may not be subject to such rules, in whole or in part. The Commission is adopting an interim final rule (Final Rule) amending the CFTC Margin Rule such that the date used for purposes of determining whether an uncleared swap was entered into prior to an applicable compliance date will not change under the CFTC Margin Rule if the swap is transferred, and thereby amended, in accordance with the terms of the Final Rule in respect of any such transfer. In doing so, the Final Rule, subject to its requirements, allows an uncleared swap to retain its legacy status when transferred in connection with a No-deal Brexit. As a condition to the relief in the Final Rule, in certain cases, the Commission requires that the transferor of a legacy swap make certain representations to the SD or MSP that is a party to the swap in the swap trading relationship documentation relating to such transfer.

The latest form for Swap Documentation expires 2022-06-30 and can be found here.

Swap Trading Relationship Documentation Requirements for Swap Dealers and Major Swap Participants

Federal Enterprise Architecture: General Government - Legislative Functions