Commodity Futures Trading Commission Withdraws Elements of its "Frequently Asked Questions on Reporting of Cleared Swaps"

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On November 28, 2012, the Commodity Futures Trading Commission ("CFTC") withdrew certain response set forth in its "Frequently Asked Questions on Reporting of Cleared Swaps." Matters raised in the questions and answers that were withdrawn are now under consideration by the CFTC as part of its review of a request from the Chicago Mercantile Exchange Inc. ("CME") for approval of CME Rule 1001 — "Regulatory Reporting of Swap Data,". CME's Rule 1001 provides that incompliance with CFTC rules governing the regulatory reporting of swaps, all swaps cleared by CME, and resulting positions, creation and continuation data shall be reported to CME's swap data repository. In addition, at the request of a counterparty, any such data reported to CME as a clearing house, shall be provided to a swap data repository selected by the counterparty.

Specifically, the CFTC withdrew the following questions and their corresponding answers:

Q: Which party has the authority to select the particular SDR for purposes of cleared swap reporting?

A: Part 45 of the CFTC's Regulations is silent regarding which party to a swap transaction has the authority to select the SDR. However, § 45.8 of the CFTC's Regulations provides a selection hierarchy for determining the Reporting Counterparty for reporting swaps to an SDR. Accordingly, Staff believes that (unless otherwise agreed to by the counterparties and the DCO) the selection of the particular SDR to which the swap data is reported for the resulting swaps due to clearing is to be determined by the counterparties to the original swap.

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