Swap Dealer Disclosure and Reporting Requirements
Under the Dodd-Frank Act, swap dealers and major swap participants are required to comply with certain disclosure, recordkeeping, and reporting requirements related to its swap transactions. This includes the timely and accurate reporting of:
- swap transaction and pricing data that is reported in real-time and made available to the public;
- required swap creation data; and
- required swap continuation data.
Purpose of Swap Reporting Requirements
The reporting requirements are designed to enhance transparency, promote standardization, and reduce systemic risk. Among the many requirements include: maintaining a data field for the legal entity identifiers (LEI), correcting any errors in swap data that were previously reported, and implementing a Business Continuity and Disaster Recovery Plan to be implemented in the event of a disruption of the swap dealer’s normal business activities. For a complete list of the reporting requirements, refer to 17 CFR Part 45.
CFTC Swap Reporting Enforcement Action
In a recent CFTC enforcement action, Deutsche Bank AG (“Deutsche Bank”) was charged with “failing to report any swap data for multiple asset classes for five days; submitting incomplete and untimely swap data; failing to supervise its employees responsible for swap data reporting; having an inadequate Business Continuity and Disaster Recovery Plan; and violating a prior CFTC Order.” The charge derived from a system outage in the bank’s swap data reporting system that prevented Deutsche Bank from reporting any swap data for multiple asset classes for approximately five days. Due to an ineffective Business Continuity and Disaster Recovery Plan, the subsequent efforts to end the system outage only exacerbated the problems.
CFTC Whistleblower Program
Under the CFTC Whistleblower Program, whistleblowers may be eligible for monetary awards when they voluntarily provide the CFTC with original information about violations of the Commodity Exchange Act (“CEA”) that leads the CFTC to bring a successful enforcement action resulting in monetary sanctions exceeding $1,000,000.
CFTC Whistleblower Rewards and Bounties
Whistleblowers are eligible to receive between 10 percent and 30 percent of the monetary sanctions collected. On April 16, 2016, a whistleblower was awarded more than $10 million for providing key information that led to a successful enforcement action.
CFTC Whistleblower Protection
The CFTC Whistleblower Program also protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity. Furthermore, the Dodd-Frank Act protects whistleblowers from retaliation by their employers for reporting violations of the CEA to the CFTC.