The Commodity Futures Trading Commission has issued a final rule regarding reporting and recordkeeping with respect to swaps. The effective date of the rule is March 13, 2012; compliance dates are dependent upon the completion of other CFTC rulemakings.
A. Compliance dates
There are three staggered compliance dates based on the types of swaps and the entities involved.
B. Who is responsible for reporting?
One counterparty to a swap must report the swap. If only one counterparty is an SD, the SD must report the swap. If one counterparty to a swap transaction is an MSP and the other counterparty is a non-SD/MSP, the MSP must report the swap. If both counterparties are non-SD/MSPs and only one is a financial entity, the financial entity must report the swap. If both counterparties are SDs, or both are MSPs, or both are non-SD/MSPs and are financial entities, or both are non-SD/MSPs and neither is a financial entity, then the counterparties must select one counterparty between them to report the swap. Where only one counterparty to a swap is a U.S. person, the U.S. person must report the swap.
Reporting parties may also contract with third parties to facilitate reporting, although such reporting parties will remain fully responsible for their reporting obligations.
C. Where to report
Swap data will be reported to an SDR, or to the CFTC if no SDR for swaps in the relevant asset class is available. Assuming that there is a registered SDR ready to accept the data, reporting parties will need to be proactive in implementing the necessary procedures and systems to connect with, and report to, such SDR by the compliance date. In addition, based on the timing limits within which data must be reported as summarized below, reporting parties should develop systems to electronically document their swaps to facilitate prompt reporting.
D. Content and timing of reports
Each swap execution facility, designated contract market, derivatives clearing organization, SD and MSP subject to these rules will need to keep full, complete and systematic records, together with all pertinent data and memoranda, relating to all activities with respect to swaps. Each non-SD/MSP counterparty must keep full, complete and systematic records, together with all pertinent data and memoranda, with respect to each swap in which it is a counterparty.
How long must records be retained?
All records must be kept for the life of the swap plus five years. The records must be retrievable via real-time electronic access by the registrant throughout the life of the swap and for the following two years, and must be retrievable within three business days throughout the remainder of the recordkeeping period. For non-SD/MSPs, records must be retrievable within five business days throughout the retention period. SDRs must keep records retrievable via real-time electronic access for the life of the swap plus five years, and then for ten additional years, in archival storage, retrievable within three business days.
 CFTC Final Rule, Swap Data Recordkeeping and Reporting Requirements, 77 Fed. Reg. 2136 (Jan. 13, 2012).
 Credit swap means “any swap that is primarily based on instruments of indebtedness, including, without limitation: Any swap primarily based on one or more broad-based indices related to instruments of indebtedness; and any swap that is an index credit swap or total return swap on one or more indices of debt instruments.” Interest rate swap means “any swap which is primarily based on one or more interest rates, such as swaps of payments determined by fixed and floating interest rates; or any swap which is primarily based on rates of exchange between different currencies, changes in such rates, or other aspects of such rates (sometimes known as cross-currency swaps).” Id. at 2197.
 While the Swap Data Recordkeeping and Reporting Requirements Release requires that all swaps, whether between 100%-owned subsidiaries or otherwise, need to be reported to an SDR or the CFTC, the CFTC distinguished between such types of swaps in its Real-Time Public Reporting of Swap Transaction Data Release. See CFTC Final Rule, Real-Time Public Reporting of Swap Transaction Data, 77 Fed. Reg. 1182 (Jan. 9, 2012).
 For the purposes of this rule, “financial entity” is defined under the Commodity Exchange Act Section 2(h)(7)(C).
 As of the time of this memo, final SDR registration rules had not been released.
 See Section 45.3 of Swap Data Recordkeeping and Reporting Requirements, 77 Fed. Reg. at 2199.
Rita M. Molesworth is a Partner in the Asset Management Group and Jack I. Habert is Of Counsel in the Corporate and Financial services Department. Jonathan C. Burwick, who co-authored the above article, is an Associate in the Asset Management Group of Willkie Farr & Gallagher LLP.