February 28, 2013
Mr. Gary Barnett
Director
Division of Swap Dealer and Intermediary Oversight
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street NW
Washington, DC 20581
Re: Additional Request for No-Action Relief: Recordkeeping Requirements under Subpart F of the Internal Business Conduct Rule
Dear Mr. Barnett:
The Securities Industry and Financial Markets Association (“SIFMA”)1 hereby requests additional relief on behalf of SIFMA member firms, similarly situated swap dealers and major swap participants (collectively, the “Firms”) from certain recordkeeping requirements of Subpart F of the Internal Business Conduct Rule (“Subpart F”).2 SIFMA respectfully requests that the Division of Swap Dealer and Intermediary Oversight (the “Division”) of the Commodity Futures Trading Commission (the “CFTC”) confirm it will not recommend that the CFTC take enforcement action against a Firm not in compliance with certain requirements of Subpart F described herein for a period of time as further explained below.
SIFMA and its member firms are grateful for the no-action relief provided by the Division in its October 26, 2012 letter (the “No-Action Letter”)3 in response to SIFMA’s request for no-action relief set out in a letter dated August 10, 2012 (the “August 2012 Letter”) (each attached as an Appendix hereto). SIFMA and its member firms also appreciate the opportunity to continue their ongoing dialogue with the CFTC about how Firms may comply with the recordkeeping requirements of Subpart F.
1 SIFMA brings together the shared interests of hundreds of securities firms, banks and asset managers. SIFMA’s mission is to support a strong financial industry, investor opportunity, capital formation, job creation and economic growth, while building trust and confidence in the financial markets. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association. For more information, visit www.sifma.org.
2 Swap Dealer and Major Swap Participant Recordkeeping and Reporting, Duties, and Conflicts of Interest Policies and Procedures; Futures Commission Merchant and Introducing Broker Conflicts of Interest Policies and Procedures; Swap Dealer, Major Swap Participant, and Futures Commission Merchant Chief Compliance Officer; 77 Federal Register 20128; April 3, 2012; Final Rule (CFTC: RIN 3038-AC96).
3 CFTC Letter No. 12-29 (Oct. 26, 2012). Pursuant to the No-Action Letter, prior to March 31, 2013, the Division will not recommend that the CFTC take an enforcement action against any Firm for failure to be fully compliant with (i) the requirement that swap dealers (“SDs”) and major swap participants (“MSPs”) make and keep records of all oral communications related to pre-execution swap trade information (and communications that lead to the conclusion of a related cash or forward transaction) pursuant to Regulations 23.202(a) and (b), (ii) the requirement that SDs and MSPs maintain all transaction records and daily trading records in a manner “identifiable and searchable” by transaction and counterparty pursuant to Regulations 23.201(a)(1), 23.202(a) and 23.202(b), (iii) the requirement that SDs and MSPs use a UTC timestamp when recording quotations prior to and at the time of execution of a swap pursuant to Regulations 23.202(a)(1)(ii), (a)(2)(iv), (b)(3) and (b)(4), and (iv) the requirement that SDs and MSPs retain swap records at their principal places of business or such other principal offices as designated by the SDs or MSPs.