The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) was signed into law on July 21, 2010. Title VII of Dodd-Frank, known as the “Wall Street Transparency and Accountability Act”, created a series of new regulatory measures relating to disclosure and tracking of derivative transactions. While the substantial burden of swap disclosure and tracking under Dodd-Frank falls to entities defined as “swap dealers” (known as “SDs”) and “major swap participants” (known as “MSPs”), private parties have some duties under Title VII, both with respect to new and historical swaps. Two primary obligations are the requirements that these parties, referred to as End Users, maintain certain records with respect to their swap(s) and obtain a Legal Entity Identifier.

The purpose of this Client Alert is to outline the primary obligations for private End Users who have interest rate swaps classified as “historical swaps” under Dodd-Frank.

Definitions. Swaps entered into before July 21, 2010 and in existence on or after April 25, 2011 are defined as “preenactment swaps”; swaps entered into on or after July 21, 2010 and in existence on or after April 25, 2011 are defined as “transition swaps”; pre-enactment swaps and transition swaps are defined as “historical swaps”.

Recordkeeping Requirements. End Users are required to retain “full, complete and systematic records, together with all pertinent data and memoranda” relating to their swaps both during the life of the swap and for at least five years following termination of the swap. While these records may be maintained electronically or in hard copy, they must be able to be accessed by the End User within five business days during the required retention period.

Legal Entity Identifier. Title VII requires that swap participants obtain what is referred to as a “legal entity identifier” or “LEI”. However, the global system necessary to create LEIs is not yet in existence. In the interim, swap parties are to obtain what is referred to as a “CICI” (CFTC Interim Compliant Identifier). Under the regulations relating to this provision of Dodd-Frank, swap reporting parties, typically an SD or MSP for an interest rate swap, must obtain a CICI by April 10, 2013. If the End User does not have a CICI by that date, the SD or MSP counterparty can use an internal identifier to identify the End User until the End User obatins a CICI. End Users are required to obtain a CICI no later than October 7, 2013 (180 days after April 10, 2013).

The information in this Client Alert is intended to be summary in nature. End Users should consult with counsel of their choice about these matters which relate to their historical swaps.