The Commodity Futures Trading Commission (CFTC) is requesting submissions from industry participants who wish to be considered for designation by the Commission as the source for identifiers to be used for identification of swap counterparties in swap recordkeeping and swap data reporting under the jurisdiction of the Commission beginning on July 16, 2012.
Background. The CFTC's final swap data recordkeeping and reporting rule, 77 FR 2136, http://www.cftc.gov/ucm/groups/public/@lrfederalregister/documents/file/2011-33199a.pdf, requires swap counterparties to be identified in recordkeeping and swap data reporting pursuant to the rule by a legal entity identifier. The rule sets out both technical and governance principles that the identifier used in such reporting must follow. The rule provides that the Commission will determine, prior to the start of swap data reporting on July 16, 2012, based on factors set forth in the rule, whether an identifier system satisfying the requirements of the rule is available to provide identifiers to swap market participants required to comply with the rule. If the Commission determines that an appropriate identifier source is available, the rule calls for the Commission to designate the system as the provider of identifiers to be used in complying with the rule, by means of a Commission order.
The CFTC Interim Compliant Identifier (CICI). The CFTC swap data recordkeeping and reporting rule also calls for issuance of the identifier used in recordkeeping and reporting under CFTC jurisdiction, and for any utility formed to issue such identifiers, to be subject to international supervision. The Commission is participating in an international process, coordinated by the Financial Stability Board (FSB), to establish governance principles and reference data requirements for a global legal entity identifier (LEI). That process calls for the regulatory LEI Expert Group convened by the FSB to make clear recommendations in this regard to the FSB by the end of April 2012, for consideration and endorsement by the FSB in May 2012. Until the FSB endorses the recommendations of the Expert Group in May 2012, the CFTC is referring to the identifier to be used in reporting under the CFTC rule as the CFTC Interim Compliant Identifier (CICI). As stated in the CFTC rule, the Commission plans to adopt the governance principles and LEI reference data requirements endorsed by the FSB, making them applicable to identification of swap counterparties under CFTC jurisdiction. Once these steps are completed, the Commission anticipates that the identifier now called the CICI will transition into the global LEI, and be referred to as the LEI.
Request for Submissions. To enable issuance of CICIs far enough in advance of July 16, 2012, the Commission is requesting submissions from industry participants who wish to be considered by the Commission for designation as the provider of CICIs for use in compliance with the CFTC rule beginning July 16, 2012. Submissions may be made electronically by email to cici@cftc.gov, or by mail or courier service to CICI, Commodity Futures Trading Commission, 1155 21st. St. NW, Washington, DC 20581. Submissions must be received by the CFTC no later than March 16, 2012, at 11:59 p.m. Eastern Standard Time. Submissions must include (1) the name, address, and telephone number of the entity, or of each entity in a joint venture, seeking to be designated as the provider of CICIs; (2) the name, address, office telephone number, mobile telephone number, and email address of a contact person or persons for the entity or entities making the submission; and (3) a statement that the entity or entities have read the CFTC swap data recordkeeping and reporting rule provisions concerning identifiers, and wish to be considered for designation as the provider of CICIs pursuant to the rule.
Requirements for Consideration. Candidates for designation must be prepared to demonstrate that they meet all of the requirements set forth in the CFTC swap data recordkeeping and reporting rule. In addition, submitters should be aware that: (1) the designation process will include an on-site, live demonstration for Commission staff of the process to be used for issuance of CICIs; (2) the Commission's designation will have a limited term of two years, and be terminable on six months notice if a different central utility for the global LEI is chosen later through the FSB process and becomes operational; and (3) the Commission's designation will require the designated utility to make public all CICI data, operations, identity validation processes and audit trail, and to pass to any successor utility, free of charge, all CICI data and all CICI intellectual property rights. Detailed requirements for designation and information concerning the designation process will be sent to submitters once their submissions are received.
Timeline for Designation Process. Submitters will be required to provide a written demonstration of their ability to meet all Commission requirements regarding the CICI by April 9, 2012, and to provide an on-site, live demonstration of their process for issuing CICIs before April 30, 2012. The Commission plans to designate the provider of CICIs shortly after the FSB Plenary Meeting on May 29, 2012.