In August, the Commodity Futures Trading Commission (“CFTC”) proposed a rule amending certain reporting requirements to better accommodate the reporting of cleared swaps. The CFTC reporting regime, as it currently exists, was “premised upon the existence of one continuous swap.” However, cleared swaps generally involve the acceptance of a swap (i.e., the “alpha” swap) by a derivatives clearing organization (“DCO”) for clearing and the replacement of that swap by equal and opposite swaps (i.e., “beta” and “gamma” swaps), with the DCO as the counterparty to each such swap. The proposed rule defines “original swap” as “a swap that has been accepted for clearing by a derivatives clearing organization” and “clearing swap” as “a swap created pursuant to the rules of a derivatives clearing organization that has a derivatives clearing organization as a counterparty, including any swap that replaces an original swap that was extinguished upon acceptance of such original swap by the derivatives clearing organization for clearing.”
The CFTC reporting framework imposes certain reporting obligations when a swap is initially is executed, referred to as “creation” data, and over the course of the swap’s existence, referred to as “continuation” data. Creation data consists of (i) primary economic terms (“PET”) data and (ii) confirmation data. Continuation data is defined as “all of the data elements that must be reported during the existence of a swap to ensure that all data concerning the swap in the swap data repository remains current and accurate, and includes all changes to the PET of the swap occurring during the existence of the swap.”
Significant provisions of the proposed rule include the following:
- Creation data – clearing swaps. The DCO would report all required creation data for each clearing swap as soon as technologically practicable. A swap execution facility (“SEF”), derivatives clearing market (“DCM”), or counterparty other than the DCO would not have swap data reporting obligations with respect to clearing swaps.
- Removal of certain confirmation data reporting requirements. For swaps that, at the time of execution, are intended to be submitted to a DCO for clearing, the SEF/DCM (if the swap is on-facility) or the reporting counterparty (if the swap is off-facility) would continue to report PET data but not be required to report confirmation data.
- Continuation data for original swaps to be reported by a DCO. A DCO would be required to report all required continuation data for original swaps (including swap terminations) to the swap data repository (“SDR”) to which the swap was initially reported. A DCO would be required to report all life cycle event data for an original swap on the same day that any life cycle event occurs, or to report all state data for the original swap daily. If a swap is submitted to a DCO for clearing and is not accepted for clearing, however, the DCO would not have continuation data reporting obligations for the swap.
- DCO reporting of unique swap identifiers. As a mechanism for linking clearing swaps to the original swap that they replace, a DCO would be required to report, among other information, both the unique swap identifier (“USI”) of the original swap that was replaced by the clearing swaps and the USIs of the clearing swaps that replace the original swap. A DCO would be required to generate and assign a USI for each clearing swap upon, or as soon as technologically practicable after, acceptance of an original swap by the DCO for clearing (or execution of a clearing swap that does not replace an original swap), and prior to reporting the required creation data for each clearing swap. The USI for each clearing swap would consist of two data components: a unique alphanumeric code assigned to the DCO by the CFTC for the purpose of identifying the DCO with respect to USI creation, and an alphanumeric code generated and assigned to that clearing swap by the automated systems of the DCO.
- Choice of SDR / reporting to single SDR. The SEF/DCM (if the swap is on-facility) or the reporting counterparty (if the swap is off-facility) would choose the SDR to which all subsequent swap creation and continuation data for a swap would be reported. All required swap data would have to be reported to a single SDR for a given swap. Similarly, a DCO would have to report all required creation and continuation data for each clearing swap to a single SDR. The proposed rule, however, does not require that clearing swaps be reported to the same SDR as the original swap that they replaced.
- PET fields – all reporting entities. Certain new PET fields applicable to all reporting entities would be added.
- PET fields – DCOs for clearing swaps. Certain new PET fields specifically to be reported by DCOs for clearing swaps would be added.
The following table provides a high-level, general summary of which parties would be responsible for reporting PET data, confirmation data, and continuation data for (i) swaps that have been, or are intended to be, submitted to a DCO for clearing and (ii) clearing swaps.
 Amendments to Swap Data Recordkeeping and Reporting Requirements for Cleared Swaps; Proposed Rule, 80 Fed. Reg. 52,544 (August 31, 2015).
 Id. at 52,545.
 Id. at 52,547.
 “Primary economic terms data” is defined as “all of the data elements necessary to fully report all of the primary economic terms of a swap in the swap asset class of the swap in question,” while “confirmation data” is defined as “all of the terms of a swap matched and agreed upon by the counterparties in confirming the swap. For cleared swaps, confirmation data also includes the internal identifiers assigned by the automated systems of the derivatives clearing organization to the two transactions resulting from novation to the clearing house.” CFTC Rule § 45.1.
 Specifically, a party reporting continuation data must report “valuation data” and either “life cycle event data” or “state data.” “Valuation” data refers to all of the data elements necessary to fully describe the daily mark of the transaction. CFTC Rule § 45.4. “Life cycle event data” refers to all of the data elements necessary to fully report any “life cycle event,” which is defined as any event that would result in either a change to a primary economic term of a swap or to any primary economic terms data previously reported in connection with a swap. CFTC Rule § 45.4. “State data” refers to all of the data elements necessary to provide a snapshot view, on a daily basis, of all of the primary economic terms of a swap in the swap asset class of the swap in question, including any change to any primary economic term or to any previously-reported primary economic terms data since the last snapshot. Id.
 See fn 5 above for a definition of state data.