CFTC Final Interpretative Guidance on Applicability of Indemnification and Confidentiality Obligations under CEA Section 21(d) to Foreign Regulators
New section 2(a)(13)(G) of the Commodities Exchange Act ("CEA"), promulgated pursuant to the Dodd-Frank Act, requires all swaps to be reported to swap data repositories ("SDRs"). Under CEA section 21(c)(7), SDRs are required to make swap transaction data available to certain domestic and foreign regulators under specified circumstances. As a condition of being able to access such data from a SDR, regulators are required by CEA section 21(d) to abide by the confidentiality and indemnification requirements of section 8 of the CEA including to indemnify the SDR and the CFTC for any expenses arising out of litigation relating to the information provided by the SDR.
On October 22, 2012, the Commodity Futures Trading Commission (the "CFTC") issued a final interpretative statement to exempt foreign regulators from the confidentiality and indemnification requirements. Specifically, the interpretative statement states that a registered SDR would not be subject to the confidentiality and indemnification provisions of CEA section 21(d) if: (i) such registered SDR is also registered, recognized or otherwise authorized in a foreign jurisdiction's regulatory regime; and (ii) the data sought to be accessed by a foreign regulatory authority has been reported to such registered SDR pursuant to the foreign jurisdiction's regulatory regime. In addition, because some registered SDRs might also be registered, recognized or otherwise authorized in a foreign jurisdiction and may accept swap data reported pursuant to a foreign regulatory regime, the CFTC concluded that the confidentiality and indemnification provisions of CEA section 21(d) generally apply only to such data reported pursuant to the CEA and CFTC regulations.
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