CFTC Proposes Amendments Regarding Reporting and Recordkeeping Requirements for End Users (Fed. Reg.)

The CFTC's proposed amendments to the trade option exemption for end users were published in the Federal Register.

The trade option exemption pertains to reporting requirements for trade option counterparties that are not swap dealers or major swap participants, as well as to recordkeeping requirements for trade option counterparties that are not swap dealers or major swap participants.

The CFTC proposed the elimination of the Form TO annual notice reporting requirement for otherwise unreported trade options in CFTC Rule 32.3(b). Under the proposal, a counterparty that is not a swap dealer ("SD") or major swap participant ("MSP") would need to provide notice to the CFTC within 30 days after entering into trade options (whether reported or unreported) that have an aggregate notional value in excess of $1 billion in any calendar year. Additionally, the CFTC proposed that "under no circumstances" would non-SDs and non-MSPs "be subject to Part 45 reporting requirements in connection with their trade options."

With respect to Part 45 recordkeeping for trade options, the CFTC stated that non-SDs and non-MSPs would need only to comply with applicable provisions in CFTC Rule 45.2, with the caveat that a non-SD or non-MSP would have to obtain a legal entity identifier ("LEI") pursuant to CFTC Rule 45.6 and provide such LEI to its SD/MSP counterparty. The CFTC also proposed to amend CFTC Rule 32.3(c)to eliminate a reference to the now-vacated Part 151 position limits requirements.

Comments on the proposed rule amendments must be submitted by June 8, 2105.

See: 80 FR 26200.
Related news: CFTC Proposes Rules Regarding Reporting and Recordkeeping Requirements for End Users (with Cadwalader Summary) (April 30, 2015).