reporting will provide safeguards for American taxpayers and the
financial system as a whole'').
---------------------------------------------------------------------------

    Finally, the Commission notes that, even if there is only one
registered SDR for some period of time, other Commission rules are
designed to minimize any undue advantage that the first SDR might
otherwise enjoy. For example, every SDR, even the first and only
registered SDR in a particular asset class, must offer fair, open, and
not unreasonably discriminatory access to users of its services.\568\
Furthermore, any fees that it charges would have to be fair and
reasonable and not unreasonably discriminatory.\569\
---------------------------------------------------------------------------

    \568\ See Rule 13n-4(c)(1)(iii) under the Exchange Act, 17 CFR
240.13n-4(c)(1)(iii).
    \569\ See Rule 13n-4(c)(1)(i) under the Exchange Act, 17 CFR
240.13n-4(c)(1)(i).
---------------------------------------------------------------------------

5. No Delay for Substituted Compliance Determinations
    Three commenters urged the Commission to defer compliance with
Regulation SBSR until the Commission has made substituted compliance
determinations with respect to regulatory reporting and public
dissemination of security-based swap transactions for certain foreign
jurisdictions.\570\ In the view of one of these commenters, this
approach could ``save reporting sides the effort and cost of building
to the SBSR requirements if their current builds will suffice.'' \571\
Another commenter stated that ``[r]equiring the changes to systems,
personnel and trade flows necessary to comply with the Commission's
Proposal only to later be granted substituted compliance would impose
significant and unnecessary burdens for negligible short-term
benefits.'' \572\
---------------------------------------------------------------------------

    \570\ See ISDA/SIFMA Letter at 19-20; SIFMA/FSR Letter at 12-13,
15 (recommending deferring compliance until the Commission makes
comparability determinations for ``key'' foreign jurisdictions
including Australia, Canada, the European Union, Japan, and
Switzerland); IIB Letter at 19.
    \571\ ISDA/SIFMA Letter at 20.
    \572\ SIFMA/FSR Letter at 15.
---------------------------------------------------------------------------

    The Commission declines to accept this suggestion and does not
believe that compliance with Title VII's regulatory reporting and
public dissemination requirements, as implemented by Regulation SBSR,
should be delayed until the Commission has made any substituted
compliance determinations. The Commission has not yet received any
substituted compliance applications

and, therefore, does not yet have sufficient information regarding any
foreign jurisdiction to make the findings necessary to issue a
substituted compliance order. In addition, because many other
jurisdictions are, like the Commission, still in the process of
establishing and implementing their regulatory requirements, the
Commission cannot predict when--or even if--any jurisdictions
ultimately will have regulatory systems that are comparable to
Regulation SBSR. If the Commission were to accept the commenters'
suggestion, the Commission might have to defer compliance for a lengthy
period, which would unnecessarily delay the implementation of the
reporting and public dissemination regime.
6. No Delay for Adoption of SB SEF Rules
    Two commenters urged the Commission to delay Compliance Date 1
until the Commission adopts final rules relating to SB SEFs and
provides sufficient time for entities to register with the Commission
as SB SEFs.\573\ One of these commenters argued, for example, that
``the Commission should prepare alternative compliance regimes in the
chance that all of the SB swap trading rules are not in place (and, as
a result, market participants cannot meet the reporting obligations of
Rule 901) by Compliance Date 1.'' \574\
---------------------------------------------------------------------------

    \573\ See WMBAA Letter at 5-6; ISDA/SIFMA Letter at 3.
    \574\ WMBAA Letter at 6.
---------------------------------------------------------------------------

    The Commission declines to act on the commenters' suggestion.
Delaying compliance with Regulation SBSR until final rules relating to
SB SEFs are adopted would result in the Commission and other relevant
authorities continuing to lack complete records of all security-based
swap transactions, which will facilitate market and systemic risk
oversight. The Commission believes that Regulation SBSR can be
successfully implemented even before the adoption of final SB SEF rules
and the registration of SB SEFs with the Commission. The Commission
understands that, currently, many security-based swaps trade off-
platform and it is likely that a sizeable portion of the security-based
swap market will continue to trade off-platform, even after SB SEFs
have the opportunity to register with the Commission. The Commission
believes that delaying Compliance Date 1 until SB SEFs have registered
would unnecessarily delay the reporting of security-based swaps that
trade off-platform.
    The Commission understands that there are a small number of
existing entities that likely meet the definition of ``security-based
swap execution facility'' at present but are not yet registered with
the Commission as such. However, Rule 901(a)(1) applies to all
platforms, including unregistered SB SEF. Moreover, the Commission does
not believe that the finalization of its SB SEF rules would affect
their capability to report such transactions to a registered SDR
because the Commission understands that such entities are likely to be
swap execution facilities that already have incurred swap reporting
duties under CFTC rules.\575\ Thus, these entities already have
substantial reporting infrastructure that can likely be used to support
security-based swap reporting duties.\576\ For transactions that occur
on exempt SB SEFs, the Commission considered an alternative of
requiring a side to report each transaction effected on the SB SEF that
will be submitted to clearing until SB SEFs have an opportunity to
register with the Commission. However, this alternative is unworkable
because platform transactions that will be submitted to clearing may be
anonymous, and the sides cannot be expected to ascertain the reporting
side or report the necessary counterparty information if they are
anonymous to each other.\577\
---------------------------------------------------------------------------

    \575\ See Swap Data Recordkeeping and Reporting Requirements, 77
FR 2136 (January 13, 2012) (discussing reporting under the CFTC
rules and swap execution facilities roles in that reporting); see
also ``The Role of Swap Execution Facilities (SEFs) in Derivatives
Trade Execution, Clearing and Reporting: Part 2'' at https://riskfocus.com/the-role-of-swap-execution-facilities-sefs-in-derivatives-trade-execution-clearing-and-reporting-part-2/ (last
visited on May 25, 2016) for a summary of such reporting.
    \576\ See supra Section IV(H).
    \577\ See supra Section IV(B).
---------------------------------------------------------------------------

7. Compliance With UIC Requirements
    Several commenters urged the Commission to defer compliance with
Regulation SBSR's UIC requirements until international standards for
these UICs are developed and can be used across multiple SDRs and
multiple jurisdictions.\578\ Two of these commenters expressed concern
that requiring each registered SDR to establish its own UIC system
ahead of an internationally recognized standard would generate
significant complexities and costs and would frustrate data aggregation
efforts.\579\ One commenter argued that the Commission generally should
``consider a separate compliance schedule for UIC fields to allow
sufficient time for SB SDRs to work collaboratively with market
participants, including prospective UIC issuers, to develop an industry
standard or, at minimum, an SB SDR-specific methodology.'' \580\
---------------------------------------------------------------------------

    \578\ See DTCC Letter at 2-3; ISDA/SIFMA Letter at 3, 12; DTCC/
ICE/CME Letter at 3-4; Financial InterGroup Letter at 4.
    \579\ DTCC Letter at 10; DTCC/ICE/CME Letter at 3.
    \580\ DTCC Letter at 11. See also DTCC/ICE/CME Letter at 3
(stating that the Commission should allow ``sufficient time for the
IDs to be developed in collaboration with the industry'').
---------------------------------------------------------------------------

    After carefully considering the issues raised by commenters, the
Commission believes, for the reasons described below, that use of the
various UICs must commence on Compliance Date 1:
a. UICs for Legal Entities
    For any UIC that can be represented with a Legal Entity Identifier
(``LEI''), compliance is required on Compliance Date 1. In the
Regulation SBSR Adopting Release, the Commission recognized the Global
Legal Entity Identifier System (``GLEIS'') as an internationally
recognized standards-setting system (``IRSS'') that satisfies the
requirements of Rule 903.\581\ Under Rule 903(a), if an IRSS recognized
by the Commission has assigned a UIC to a person, unit of a person, or
product, each registered SDR must employ that UIC for reporting
purposes under Regulation SBSR, and SDR participants must obtain such
UICs for use under Regulation SBSR. Counterparties, ultimate parents,
brokers, execution agents, platforms, registered clearing agencies, and
registered broker-dealers typically are legal entities and typically
already have or will be able to obtain an LEI. Accordingly, compliance
with the LEI requirements under Regulation SBSR is required on
Compliance Date 1.
---------------------------------------------------------------------------

    \581\ See 80 FR at 14631-32.
---------------------------------------------------------------------------

b. Branch ID, Trading Desk ID, and Trader ID
    Regulation SBSR also requires UICs for three types of ``sub-legal
entities'': Branches, trading desks, and individual traders. As
commenters note, neither the GLEIS nor any other potential IRSS assigns
identifiers to any sub-legal entities at this time.\582\ Although the
GLEIS has begun exploring the possibility of assigning identifiers to
branches and certain natural persons,\583\ it is unclear when any final
decision to do so might be taken. Given the

uncertainty about when or even if an IRSS will eventually be able to
issue identifiers for all branches, trading desks, and traders, the
Commission does not believe that it would be appropriate to delay
compliance with these UIC requirements until an IRSS can provide them.
---------------------------------------------------------------------------

    \582\ See DTCC Letter at 9-10; Financial InterGroup Letter at 3-
4.
    \583\ See, e.g., LEI Regulatory Oversight Committee,
``Consultation document on including data on branches in the Global
LEI System,'' available at http://www.leiroc.org/publications/gls/lou_20151019-1.pdf (last visited on May 25, 2016); and ``Statement
on Individuals Acting in a Business Capacity,'' available at http://www.leiroc.org/publications/gls/lou_20150930-1.pdf (last visited on
May 25, 2016).
---------------------------------------------------------------------------

    The Commission recognizes that this approach raises the possibility
that different SDRs could, in theory, assign different UICs to the same
person, unit of a person, or product. If this were to occur, the
Commission could have to map the UICs assigned by one registered SDR to
the corresponding UICs assigned by one or more other SDRs to maintain a
complete picture of the market activity pertaining to a particular
person or sub-legal entity. The Commission specifically addressed this
issue in the Regulation SBSR Adopting Release.\584\ However, the
Commission previously noted a mechanism whereby a participant could use
the same UICs at multiple SDRs.\585\ Regulation SBSR does not prohibit
a participant from making suggestions to a registered SDR regarding the
UICs that the SDR is required to assign, particularly for sub-legal
entities.\586\ Through this mechanism for assignment, a person who is a
participant of two or more registered SDRs could--with the concurrence
of these SDRs--utilize the same UICs across multiple SDRs.\587\
---------------------------------------------------------------------------

    \584\ See 80 FR at 14632 (``UICs, even if SDR-specific, will
provide a streamlined way of reporting, disseminating, and
interpreting security-based swap information. The Commission
believes that requiring registered SDRs to develop their own UICs--
but only for UICs that are not assigned by or through an IRSS that
has been recognized by the Commission--will result in less confusion
than the currently available alternatives, such as allowing each
reporting side to utilize its own nomenclature conventions, which
would subsequently have to be normalized by registered SDRs or by
the Commission'').
    \585\ See Regulation SBSR Adopting Release, 80 FR at 14723, n.
1371 (``assume that a person becomes a participant of a registered
SDR and obtains UICs for its trading desks and individual traders
from that SDR. Later, that person becomes a participant at a second
registered SDR. The second SDR could issue its own set of UICs for
this person's trading desks and individual traders, or it could
recognize and permit use of the same UICs that had been assigned by
the first registered SDR'').
    \586\ This could also be true for identifying counterparties
that do not fall within Rule 908(b) and do not otherwise have an LEI
that could be used for the counterparty ID.
    \587\ In connection with its comments regarding how Regulation
SBSR's compliance dates should address UIC issues, one commenter
recommended that the Commission ``consult and agree with market
participants'' on how to assign various UICs, including branch ID,
trading desk ID, trader ID, and product IDs. See DTCC Letter at 10-
11. The commenter then recommended compliance dates of different
lengths after a standard for each type of UIC had been agreed upon.
See id. The Commission already has established a mechanism for how
these UICs must be assigned: Rule 903(a), as adopted in the
Regulation SBSR Adopting Release, provides that, in the absence of a
Commission-recognized IRSS that can supply the UIC, a registered SDR
must assign the UIC using its own methodology. Furthermore, in light
of the guidance above regarding how a registered SDR may confer with
a participant to assign a mutually agreeable set of UICs--and how,
through this process, the same UICs could be used for a particular
participant across multiple SDRs--the Commission does not believe
that it is necessary or appropriate to establish different
compliance dates for each type of UIC in the manner recommended by
the commenter.
---------------------------------------------------------------------------

c. Transaction ID
    Also beginning on Compliance Date 1, each registered SDR must
comply with Rule 901(g), which requires the SDR to assign a transaction
ID to each security-based swap, or establish or endorse a methodology
for transaction IDs to be assigned by third parties. Because of the
potential importance of identifying individual transactions for
systemic risk and market oversight purposes, the Commission believes
that it is essential for registered SDRs to comply with Rule 901(g)
from the moment that they begin receiving mandatory transaction
reports.\588\
---------------------------------------------------------------------------

    \588\ Also beginning on Compliance Date 1, each registered SDR
must comply with the companion requirement in Rule 901(f) that a
registered SDR time-stamp all incoming transaction reports.
---------------------------------------------------------------------------

    One commenter expressed the belief that SDRs will be able to assign
transaction IDs to pre-enactment and transitional security-based swaps
by the date that the Commission had proposed in the Regulation SBSR
Proposed Amendments Release.\589\ Since the proposed compliance
schedule would have required historical security-based swaps to be
reported by or before proposed Compliance Date 1, the comment implies
that registered SDRs also should be able to assign transaction IDs to
newly executed transactions beginning on Compliance Date 1.
---------------------------------------------------------------------------

    \589\ See ICE Letter at 8.
---------------------------------------------------------------------------

    A second commenter urged the Commission to ``recognize the `first
touch principle' as an acceptable standard for SB SDRs to meet their
901(g) obligations.'' \590\ The commenter explained that, under the
existing CFTC swap data reporting rules, an SDR is not required to
issue a transaction ID and can rely on the reporting side to submit its
internal transaction ID.\591\ As provided in existing Rule 901(g), a
registered SDR may endorse a methodology for third parties to assign a
transaction ID to an individual security-based swap. If an SDR wishes
to allow third parties (such as platforms or counterparties) to assign
transaction IDs, the SDR must explain in its policies and procedures
under Rule 907(a)(5) \592\ any form or content requirements imposed by
the SDR that the third party would be required to follow.
---------------------------------------------------------------------------

    \590\ DTCC Letter at 20.
    \591\ See id. The Commission notes, however, that, under CFTC
Rule Sec.  45.5(c), 17 CFR 45.5(c), a swap data repository must
create and transmit a unique swap identifier for an off-facility
swap if the reporting counterparty for that swap is a non-swap
dealer/major swap participant.
    \592\ Rule 907(a)(5) requires a registered SDR to establish and
maintain written policies and procedures for assigning UICs,
including but not limited to transaction IDs, in a manner consistent
with Rule 903.
---------------------------------------------------------------------------

d. Product ID
    One commenter argued that, before requiring compliance with the
product ID requirement, the Commission should ``consult and agree with
market participants on a standard to be applied. An agreed upon public
standard would provide greater certainty to reporting sides and SB SDRs
to build to one uniform standard as opposed to bespoke models for each
SDR.'' \593\ After careful consideration of this comment, the
Commission has determined not to delay compliance with the product ID
requirement. At the present time, it is unclear if or when market
participants could agree upon and implement standards for a product ID.
Therefore, in the absence of an IRSS that can assign product IDs,
registered SDRs must by Compliance Date 1 begin assigning product IDs,
and persons with a duty to report transactions must use these SDR-
assigned product IDs in their mandatory reports. To enable their
participants to report transactions using the appropriate product IDs
on Compliance Date 1, registered SDRs must set out in their written
policies and procedures how they will assign product IDs (and all other
UICs other than those available through an IRSS recognized by the
Commission) in a manner consistent with Rule 903. A registered SDR
should consider publishing as far in advance of Compliance Date 1 as
possible the product IDs of the products most likely to be traded on or
shortly after Compliance Date 1. The Commission recognizes, however,
that it is not practical for a registered SDR to publish a list of all
possible products with their product IDs, as many products have not yet
been created (or certain types of contracts have not yet become
sufficiently standardized as to become products, as that term is
defined in Rule 900(aa), and thus require a product ID). Therefore, as
a practical matter, the Commission does not believe that a registered
SDR could comply with Rule 907(a) unless its policies and procedures
include a mechanism or process for the registered SDR to assign a
product ID to a new product before or

simultaneously with the initial transaction in that product, and to
make available the product ID so that reports of transactions in that
new product can include the correct product ID.
---------------------------------------------------------------------------

    \593\ DTCC Letter at 10.
---------------------------------------------------------------------------

8. Switching of Reporting Side Designation
    One commenter's analysis of the problems that could result from a
Commission determination to require reporting compliance ahead of the
SBS entities registration compliance date was premised on the
assumption that a U.S. non-dealing entity that was the reporting side
for a security-based swap executed during the Interim Period would
remain the reporting side for the life of the security-based swap.\594\
The commenter argued that Regulation SBSR should not permit the
reporting side designation to ``switch'' from one side to the other
over life of a security-based swap contract.\595\ The Commission
disagrees with this comment.
---------------------------------------------------------------------------

    \594\ See ISDA I at 13; ISDA II at 7.
    \595\ See ISDA I at 8 (``Switching the reporting side during the
term of a trade is in every respect an enormous challenge . . .
[and] will likely have a significant impact on the completeness,
integrity and correctness of reported SBS data'').
---------------------------------------------------------------------------

    Rule 901(a)(2)(ii) sets forth a reporting hierarchy that has two
possible outcomes for any transaction pair: (1) One side occupies a
higher rung in the hierarchy than the other side, in which case the
side that occupies the higher rung ``shall be the reporting side''; or
(2) the outcome is a tie, and ``the sides shall select the reporting
side.'' Sides in a tie situation, after having made an initial
selection of the reporting side, can select a new reporting side later
in the life of the contract.\596\
---------------------------------------------------------------------------

    \596\ If the sides insisted on selecting a new reporting side
but Rule 901(a)(2)(ii) did not permit them to do so, they could
accomplish the new selection by tearing up the existing security-
based swap and immediately replacing it with a new security-based
swap having exactly the same terms, except that they select a
different reporting side for the new transaction.
---------------------------------------------------------------------------

    Over the life of a security-based swap, a registered SDR needs to
know the reporting side of a security-based swap so that it knows
whether it is receiving a report of a life cycle event or an error
report from the entity that is obligated to report that information. A
registered SDR should consider incorporating into its policies and
procedures how it would accommodate any change to the reporting side
designation. A registered SDR may, for example, seek to obtain, in the
case of an elective switch, information from one or both sides that
confirms the switch.

D. Compliance Date 2

    Compliance Date 2 is the date on which all registered SDRs that can
accept security-based swaps in a particular asset class must begin
public dissemination, pursuant to Rule 902, of transactions in that
asset class. On Compliance Date 2, each such SDR will be required to
comply with Rules 902 (regarding public dissemination generally),
904(d) (requiring dissemination of transaction reports held in queue
during normal or special closing hours), and 905(b)(2) (with respect to
public dissemination of corrected transaction reports) for all
security-based swaps in that asset class, except as provided by Rule
902(c). As discussed further below, Compliance Date 2 is the first
Monday that is three months after Compliance Date 1.
    One commenter expressed the view that commencing the requirement
for public dissemination nine months after SDR registration would be
sufficient, provided that other compliance issues arising earlier in
the compliance schedule are resolved.\597\ Likewise, a second commenter
believed that Compliance Date 2 should be three months after Compliance
Date 1, but only after stating its belief that Compliance Date 1 should
be 12 months rather than six months after the first registered SDR
commences operations.\598\ A third commenter believed that three months
after Compliance Date 1 was not sufficient time for SDRs to comply with
the data dissemination requirements in Regulation SBSR and recommended
six months instead.\599\ A fourth commenter recommended that Compliance
Date 2 be three months after the later of Compliance Date 1 and the
date on which the Commission has determined appropriate exceptions,
delays, and/or notional caps to preserve the identity, business
transactions, and market positions of any person.\600\ The fourth
commenter asserted that the longer time was necessary for Compliance
Date 2 because ``concerns regarding the compromise of market anonymity
for illiquid and large notional trades have not adequately been
addressed during the interim period.'' \601\
---------------------------------------------------------------------------

    \597\ See DTCC Letter at 21.
    \598\ See LCH.Clearnet Letter at 12.
    \599\ See ICE Letter at 8.
    \600\ See ISDA/SIFMA Letter at 17.
    \601\ ISDA/SIFMA Letter at 3.
---------------------------------------------------------------------------

    The Commission has revised its proposed approach to Compliance Date
2 as it relates to the handling of covered cross-border transactions.
In the Regulation SBSR Proposed Amendments Release, the Commission
proposed that the public dissemination requirements associated with
Compliance Date 2 would not have applied to covered cross-border
transactions.\602\ However, as discussed in Section IX(E), supra, the
Commission in the U.S. Activity Proposal sought additional comment on
whether public dissemination of covered cross-border transactions
should be made effective \603\ and, in this release, the Commission has
determined that all transactions described in Rule 908(a)(1), including
covered cross-border transactions, shall be subject to public
dissemination, except as otherwise provided by Rule 902(c). Therefore,
compliance with the public dissemination requirements shall commence on
Compliance Date 2 for covered cross-border transactions along with
other security-based swaps, and there is no longer any reason to
consider an effective or compliance date for covered cross-border
transactions separate from all other transactions that are subject to
public dissemination.
---------------------------------------------------------------------------

    \602\ See supra note 460 (explaining that term). One commenter
supported excluding covered cross-border transactions from public
dissemination on Compliance Date 2, as well as the Commission's
decision to seek public comment before determining if and when to
include them in the scope of transactions subject to public
dissemination. See ISDA/SIFMA Letter at 18. The Commission addressed
this comment in Section IX(E), supra.
    \603\ See 80 FR at 27485.
---------------------------------------------------------------------------

    The Commission proposed and is now adopting a three-month period
between Compliance Date 1 and Compliance Date 2. This three-month
period is designed to give registered SDRs and persons having a duty to
report an opportunity to identify and resolve any issues related to
trade-by-trade reporting by participants and further test their data
dissemination systems. The Commission staff intends to monitor the
implementation of Regulation SBSR between Compliance Dates 1 and 2.
    Also, similar to the approach taken for Compliance Date 1, the
Commission believes that it will be helpful to the industry to begin
public dissemination on a Monday, which ensures that registered SDRs
have at least the immediately preceding weekend to conduct any final
systems changes or testing before public dissemination begins.
Therefore, Compliance Date 2 is the first Monday that is three months
after Compliance Date 1.
    Finally, Compliance Date 2 is the date by which participants of
registered SDRs that are subject to Rule 906(b) must comply with that
rule.\604\ This

represents a change from the proposed compliance schedule, under which
covered participants would have been required to comply with Rule
906(b) on Compliance Date 1.\605\ A person does not become subject to
Rule 906(b) until it becomes a participant of a registered SDR. A
counterparty to a security-based swap becomes a participant of a
registered SDR only when a security-based swap to which it is a
counterparty is reported to that SDR on a mandatory basis.\606\ Thus, a
security-based swap counterparty cannot become a participant until
Compliance Date 1 at the earliest, because transactions will not be
reported to a registered SDR on a mandatory basis until Compliance Date
1. A large number of security-based swap counterparties will become
participants on Compliance Date 1 or the first days and weeks following
Compliance Date 1. This could, in the Commission's view, cause
unnecessary difficulties for registered SDRs and their new participants
if participants were required to comply with Rule 906(b) on Compliance
Date 1.\607\
---------------------------------------------------------------------------

    \604\ Rule 906(b) requires each participant of a registered SDR
to provide to the SDR information sufficient to identify the
participant's ultimate parent(s) and any affiliate(s) of the
participant that also are participants of that registered SDR. Rule
906(b) further provides that a participant must ``promptly'' notify
the registered SDR of any changes to that information. Rule
907(a)(6) requires each registered SDR to establish and maintain
written policies and procedures for periodically obtaining from each
participant information that identifies the participant's ultimate
parent(s) and any participant(s) with which the participant is
affiliated.
    \605\ See Regulation SBSR Proposed Amendments Release, 80 FR at
14765.
    \606\ See Rule 900(u).
    \607\ For example, assume that S, T, and U are affiliated and
all have a single ultimate parent (P) and the Commission had
required compliance with Rule 906(b) on Compliance Date 1. At
09:30:02 UTC on Compliance Date 1, a security-based swap involving S
as a counterparty is reported to SDR A on a mandatory basis. This is
the first time that S is a counterparty to a transaction reported to
SDR A on a mandatory basis, and no affiliates of S are
counterparties to security-based swaps that have been reported to
SDR A. Upon becoming a participant of SDR A, S must report to SDR A
that it has an ultimate parent (P) and no affiliates that are also
participants. At 10:30:57 UTC, a security-based swap involving T as
a counterparty is reported to SDR A on a mandatory basis. T also
becomes a participant of SDR A and must report to SDR A that it has
an ultimate parent (P) and one affiliate (S) that also is a
participant of SDR A. Because Rule 906(b) also requires S to
promptly notify SDR A of any changes to its ultimate parent and
affiliate information, S must amend its submission to SDR A to
reflect that its affiliate T has just become a participant. At
11:30:33 UTC, a security-based swap involving U as a counterparty is
reported to SDR A on a mandatory basis. U must report to SDR A that
it has an ultimate parent (P) and two affiliates that are
participants (S and T). U's becoming a participant also triggers
revisions to S and T's reports to reflect that their affiliate U has
just become a participant. Thus, the creation of new participants in
the first hours and days after Compliance Date 1 could trigger the
requirement to file a large number of amended reports under Rule
906(b).
---------------------------------------------------------------------------

    In light of this concern, the Commission now believes that it is
appropriate to delay compliance with Rule 906(b) for an additional
three months to avoid triggering a large number of new filings and
amendments that likely would have been required if the Commission had
required compliance with Rule 906(b) on Compliance Date 1. Accordingly,
the Commission is not requiring compliance with Rule 906(b) until
Compliance Date 2. This will allow for a number of security-based swaps
to be reported over the three-month period between Compliance Dates 1
and 2 that will create a critical mass of participants, thereby
permitting the filing of initial reports under Rule 906(b) that are
less likely to require repeated updating because of the addition of new
participants that are affiliated with existing participants.\608\
---------------------------------------------------------------------------

    \608\ The Commission recognizes, however, that several Rule
906(b) reports could have to be amended to reflect the addition of a
new participant, even after Compliance Date 2. For example, assume
that ultimate parent P has 20 subsidiaries, each of which is a
participant of SDR A. Rule 906(b) requires a report from each
subsidiary showing P as the ultimate parent and each of the other 19
subsidiaries as affiliates. Now assume that a new 21st subsidiary of
P is a counterparty to a transaction reported to SDR A on a
mandatory basis. This would trigger amendments to the existing 20
reports to reflect the addition of a new affiliate participant.
Because these reports would be unnecessarily duplicative, the
Commission interprets Rule 906(b) as being satisfied if one member
of a financial group provides all of the required ultimate parent
and affiliate information on behalf of each group member that is a
participant of that registered SDR. While the registered SDR could
seek to obtain a separate report from each group member that is a
participant, the Commission encourages registered SDRs to consider
establishing policies and procedures under Rule 907(a)(6) that would
allow for abbreviated reporting for the entire group. Such
abbreviated group reporting would still be subject to the
requirement that any changes be reported to the registered SDR
``promptly.'' Furthermore, a participant in the group would still be
subject to a requirement to separately disclose any ultimate parent
or affiliate information that differs from that of other members of
the group. In the example above, assume that the 17th subsidiary of
P is a 50-50 joint venture with Q. Under the approach suggested
here, one member of the P group could file an abbreviated Rule
906(b) report on behalf of all members of the P group (that would
identify all 20 subsidiaries, including the 17th). However, the 17th
subsidiary would be subject to a separate requirement to notify the
registered SDR that, unlike all of the other P group affiliates, it
has two ultimate parents (P and Q) and would have to identify any
additional participant affiliates that it might have through its Q
parent.
---------------------------------------------------------------------------

E. New Compliance Date 3 for Historical Security-Based Swaps

    In the Regulation SBSR Proposed Amendments Release, the Commission
proposed that persons with a duty to report historical security-based
swaps in the relevant asset class would have been required to report
these transactions to a registered SDR that accepts transactions in
that asset class, in accordance with Rule 901(i), by Compliance Date 1.
As discussed further below, the Commission is adopting a new Compliance
Date 3 for the reporting of historical security-based swaps. Compliance
Date 3 is two months after Compliance Date 2.
    One commenter expressed the view that requiring reporting of
historical security-based swaps in advance of the SBS entities
registration compliance date would place the bulk of the reporting
burden on U.S. persons, including buy-side U.S. persons, because U.S.
persons would be the reporting side for all historical security-based
swaps entered into with a foreign dealing entity that did not involve
ANE activity.\609\ Furthermore, this commenter expressed concern that
it could not be reliably determined whether U.S. personnel were used to
engage in ANE activity for historical security-based swaps because
parties were not required to capture or exchange such information at
the time the transactions were executed.\610\ The commenter concluded
that it would be significantly easier to ascertain the reporting side
for historical transactions after the SBS entities registration
compliance date, because most would involve a counterparty that will
register as a security-based swap dealer.\611\ This commenter, in a
joint letter with another association, also expressed the view that the
volume of non-live historic security-based swaps ``will be enormous''
and that ``reporting over five years of security-based swap transaction
data will require tremendous effort and coordination between reporting
sides and their SDR.'' \612\ These comments recommended an extended
period for reporting non-live historical security-based swaps after the
SBS entities registration compliance date, and argued that the
commencement of reporting under Regulation SBSR would be more effective
if the reporting of non-live historic security-based swaps were done
separately and after security-based swap dealer registration.\613\
---------------------------------------------------------------------------

    \609\ See ISDA II at 10; ISDA III at 2, 4.
    \610\ See ISDA II at 10.
    \611\ See id.
    \612\ ISDA/SIFMA Letter at 16.
    \613\ See id. at 16-17.
---------------------------------------------------------------------------

    These commenters also argued that ``[d]ealer registration will
greatly expand the scope of SBS subject to reporting at a later date,
essentially creating additional individual compliance dates for
registrants and their counterparties to report additional SBS activity
and historic SBS,'' which ``will also trigger the question as to who
has the reporting obligation for

historical SBS.'' \614\ This comment is premised on the correct
observation that a historical security-based swap between two
unregistered non-U.S. persons, neither of whom engaged in ANE activity,
would fall within Rule 908(a) only after one side or the other
registers with the Commission as a security-based swap dealer. One of
these commenters also expressed the view that ``existing TIW
functionality cannot be leveraged to accomplish reporting [of
historical security-based swaps] in advance of registration.'' \615\
Therefore, in the commenter's view, to satisfy obligations to report
historical transactions before the SBS entities registration compliance
date, market participants would need to expend ``significant effort and
cost to develop appropriate new industry agreements, conduct
significant outreach to U.S. Persons and build interim reporting
logic.'' \616\
---------------------------------------------------------------------------

    \614\ Id. at 7.
    \615\ ISDA II at 11.
    \616\ Id.
---------------------------------------------------------------------------

    In light of these considerations, the Commission is adopting a new
Compliance Date 3, which is designed to minimize the concerns raised by
the commenters. Persons with a duty to report historical security-based
swaps in an asset class must do so by the date that is two months after
Compliance Date 2. To the extent that historical transactions involve a
non-U.S. counterparty that is likely to register as a security-based
swap dealer, deferring compliance with the requirement to report
historical transactions until security-based swap dealers are
registered will significantly reduce undue burdens on non-dealing
persons who are their counterparties. After the SBS entities
registration compliance date, registered security-based swap dealers
will be clearly identifiable as such and will bear the responsibility
for reporting any historical transactions with unregistered persons to
the extent that information about such transactions is available. The
two-month gap between Compliance Date 2 and Compliance Date 3 is
designed to avoid problems that could arise if registered SDRs and
their participants had been required to achieve major compliance
milestones on the same day or in close proximity.
    The Commission notes that the relevant transactions need not be
reported on Compliance Date 3, but rather by Compliance Date 3. The
Commission encourages reporting sides to report historical security-
based swaps as far in advance of Compliance Date 3 as possible, to
avoid difficulties that might arise if reporting sides attempt to
report a large number of historical transactions in the last few days
or hours before Compliance Date 3.
    The Commission believes that a new Compliance Date 3, occurring
after the SBS entities registration compliance date, for reporting of
historical transactions represents an appropriate consideration of the
benefits of mandatory reporting in light of the likely costs. Before
security-based swap dealers register as such with the Commission, the
only way a foreign dealing entity could incur any duty under Regulation
SBSR is if it were engaging in ANE activity with respect to a
particular transaction. The Commission is persuaded by commenters who
argued that it could be difficult or impossible to ascertain whether
historical transactions of foreign dealing entities involved ANE
activity, as information about the involvement of U.S. personnel in
particular transactions might not exist or might be difficult to
reconstruct for transactions that were executed, in some cases, many
years ago.\617\ Because the Commission anticipates that foreign dealing
entities that account for the vast majority of cross-border
transactions will register as security-based swap dealers, the issues
associated with identifying whether a foreign dealing entity has
engaged in ANE activity will not arise for the vast majority of
historical cross-border transactions. After the SBS entities
registration compliance date, the reporting hierarchy can easily be
applied because at least one side will likely include a registered
security-based swap dealer. This approach will minimize instances where
unregistered U.S. persons could become the reporting side when they are
counterparties with foreign dealing entities.
---------------------------------------------------------------------------

    \617\ See ISDA II at 10; ISDA/SIFMA Letter at 16-17.
---------------------------------------------------------------------------

    A registered SDR that accepts reports of transactions in the
relevant asset class may allow persons with a duty to report historical
transactions in that asset class on a rolling basis at any time after
Compliance Date 1. When it begins accepting reports of historical
security-based swaps submitted on a mandatory basis, a registered SDR
must comply with Rule 901(f) and time-stamp, to the second, any
security-based swap data that it receives pursuant to Rule 901(i). The
registered SDR also must comply with Rule 901(g) with respect to
transaction IDs for each historical security-based swap that it
receives.
    As participants begin reporting historical security-based swaps to
a registered SDR, participants and registered SDRs also must comply
with Rules 901(e) and 905 regarding any historical security-based swaps
that are so reported. A report of a life cycle event of a historical
transaction that relates to information required by Rule 901(c) would
trigger public dissemination of the life cycle event if the report is
submitted on or after Compliance Date 2.\618\
---------------------------------------------------------------------------

    \618\ See Regulation SBSR Adopting Release, 80 FR at 14609
(``life cycle events relating to the primary trade information of
historical security-based swaps must, after the public dissemination
requirement goes into effect, be publicly disseminated''). However,
an error correction of a historical security-based swap involving
Rule 901(c) information would not trigger public dissemination, even
after Compliance Date 2. See id.
---------------------------------------------------------------------------

    The Commission notes that registered SDRs and their participants
need not comply with Rule 906(a) with respect to historical security-
based swaps. Rule 906(a) requires a registered SDR to identify
security-based swaps for which the SDR lacks counterparty ID and (if
applicable) broker ID, branch ID, execution agent ID, trading desk ID,
and trader ID. Regulation SBSR requires reporting of historical
security-based swaps only ``to the extent that information about such
transactions is available''--including information pertaining to the
remaining UICs. Because broker IDs, branch IDs, execution agent IDs,
trading desk IDs, and trader IDs will not be assigned by registered
SDRs until they become operational, these UICs likely will not have
existed or been recorded in connection with any historical security-
based swaps. Therefore, because these UICs are not applicable to
historical security-based swaps, a registered SDR is not required by
Rule 906(a) to query non-reporting sides for those UICs with respect to
any historical transactions, and non-reporting sides are not required
by Rule 906(a) to provide any UICs with respect to historical
transactions.

F. No Separate Compliance Dates for Cross-Border Transactions

    Compliance Dates 1, 2, and 3 apply equally to all security-based
swaps that fall within Rule 908(a), as amended herein, and all
security-based swap counterparties that fall within Rule 908(b), as
amended herein. Compliance Dates 1, 2, and 3 apply to all transactions
contemplated by the reporting hierarchy in Rule 901(a)(2), as amended
herein, including the cross-border provisions of new Rule
901(a)(2)(ii)(E). Thus, U.S.-to-U.S. transactions do not have different
compliance dates than the cross-border transactions that fall within
Rule 908(a).

    One commenter, responding to the proposed compliance schedule in
the Regulation SBSR Proposed Amendments Release, warned that, if the
Commission required regulatory reporting before security-based swap
dealer registration, U.S. non-dealing entities would incur the
reporting duty when they traded against large foreign dealing entities
\619\ and that U.S.-to-U.S. transactions would be subject to public
dissemination before U.S.-to-non-U.S. transactions.\620\ As a result,
the commenter argued, ``U.S. person end-users may avoid trading with
other U.S. persons until after dealer registration to avoid their data
being publicly disseminated.'' \621\ The commenter concluded that U.S.
non-dealing entities' avoidance of other U.S. counterparties would
disadvantage U.S. dealing entities and result in less liquidity for
U.S. non-dealing entities.\622\ The commenter also cautioned that
``[w]ith a limited list of counterparties and an even narrower list of
dealers to such transactions, public dissemination of this smaller
segment of SBS data bears the risk that counterparty identity could be
disclosed to the public.'' \623\
---------------------------------------------------------------------------

    \619\ See ISDA/SIFMA at 7.
    \620\ See id. at 7-8.
    \621\ Id. at 7.
    \622\ See id. at 7.
    \623\ Id. at 7-8.
---------------------------------------------------------------------------

    As noted in Section IX, supra, the Commission is adopting
amendments to Rules 901(a) and 908 substantially as proposed to cover
additional types of cross-border transactions, and Compliance Dates 1,
2, and 3 will apply equally to all counterparties that fall within Rule
908(b) and all security-based swaps that fall within Rule 908(a). Thus,
because Regulation SBSR's compliance dates for U.S.-to-U.S.
transactions are the same as for U.S.-to-non-U.S. transactions, there
is no incentive for U.S. counterparties to trade only with non-U.S.
persons to avoid any Regulation SBSR requirements.\624\
---------------------------------------------------------------------------

    \624\ The Commission believes that this result is generally
consistent with the commenter's statement that ``SBS data will be
more comprehensive and useful if upon the first day that reporting
is required under SBSR, broadly all participants that will be a
reporting side will have those obligations and such obligation is
evident to all other participants in covered SBS.'' Id. at 6.
---------------------------------------------------------------------------

G. Exemptions Related to the Compliance Schedule

    In June 2011, the Commission exercised its authority under Section
36 of the Exchange Act \625\ to exempt any person from having to report
any pre-enactment security-based swaps, as required by Section 3C(e)(1)
of the Exchange Act,\626\ until six months after an SDR that is capable
of receiving security-based swaps in that asset class is registered by
the Commission.\627\ In the Regulation SBSR Proposed Amendments
Release, the Commission proposed to extend the exemption from the
requirement to report pre-enactment security-based swaps to ensure
consistency between the proposed compliance schedule and the
exemption.\628\ Because Compliance Date 1, as proposed in the
Regulation SBSR Proposed Amendments Release, would have required the
reporting of pre-enactment security-based swaps within six months after
the commencement of operations of the first registered SDR in that
asset class rather than six months after the date of the registration
of the first SDR, the Commission also proposed to extend the exemption
from Section 3C(e)(1) exemption to synchronize it with proposed
Compliance Date 1.
---------------------------------------------------------------------------

    \625\ 15 U.S.C. 78mm.
    \626\ 15 U.S.C. 78c-3(e)(1).
    \627\ See Effective Date Release, 76 FR at 36291.
    \628\ See 80 FR at 14765-66.
---------------------------------------------------------------------------

    The Commission received one comment on this aspect of its proposed
exemption. The commenter agreed that the exemption for the reporting of
pre-enactment security-based swaps should be extended to and terminate
on Compliance Date 1.\629\
---------------------------------------------------------------------------

    \629\ See LCH.Clearnet Letter at 13.
---------------------------------------------------------------------------

    As discussed above, the Commission is adopting new Compliance Date
3 relating to the reporting of historical security-based swaps, which
includes pre-enactment security-based swaps. To harmonize the existing
exemption with the compliance date for reporting of pre-enactment
security-based swaps, the Commission is exercising its authority under
Section 36 of the Exchange Act to exempt any person from having to
report any pre-enactment security-based swaps, as required by Section
3C(e)(1) of the Exchange Act, in a particular asset class until
Compliance Date 3. The Commission finds that such exemption is
necessary or appropriate in the public interest, and is consistent with
the protection of investors, because such action prevents the existing
exemption from expiring before persons with a duty to report pre-
enactment security-based swaps are able and are required to report them
to a registered SDR.
    In conjunction with the proposed extension of the Section 3C(e)(1)
exemption included in the Regulation SBSR Proposed Amendments Release,
the Commission also proposed that, with respect to security-based swaps
in a particular asset class, the exemption from Section 29(b) of the
Exchange Act,\630\ in connection with Section 3C(e)(1), would terminate
on proposed Compliance Date 1. One commenter agreed with this proposed
extension of the Section 29(b) exemption in connection with Section
3C(e)(1).\631\ In addition, one commenter asked that the Commission
clarify how Section 3C(e)(1) of the Exchange Act relates to the Section
29(b) exemption.\632\ The commenter noted that the Commission's Section
29(b) exemption applies to security-based swap entered into on or after
July 16, 2011, and that Section 3C(e)(1) applies only to pre-enactment
security-based swaps, i.e., those entered into before July 21,
2010.\633\
---------------------------------------------------------------------------

    \630\ 15 U.S.C. 78cc(b). In the Effective Date Release, the
Commission exercised its authority under Section 36 of the Exchange
Act to temporarily exempt any security-based swap contract entered
into on or after July 16, 2011, from being void or considered
voidable by reason of Section 29(b) of the Exchange Act, because any
person that is a party to the security-based swap contract violated
a provision of the Exchange Act that was amended or added by
Subtitle B of Title VII of the Dodd Frank Act and for which the
Commission has taken the view that compliance will be triggered by
registration of a person or by adoption of final rules by the
Commission, or for which the Commission has provided an exception or
exemptive relief, until such date as the Commission specifies. See
Effective Date Release, 76 FR at 36305. Section 29(b) of the
Exchange Act provides, in relevant part: ``Every contract made in
violation of any provision of this title or of any rule or
regulation thereunder, and every contract . . . heretofore or
hereafter made, the performance of which involves the violation of,
or the continuance of any relationship or practice in violation of,
any provision of this title or any rule or regulation thereunder,
shall be void (1) as regards the rights of any person who, in
violation of any such provision, rule, or regulation, shall have
made or engaged in the performance of any such contract, and (2) as
regards the rights of any person who, not being a party to such
contract, shall have acquired any right thereunder with actual
knowledge of the facts by reason of much the making or performance
of such contract was in violation of any such provision rule or
regulation . . .''
    \631\ See LCH.Clearnet Letter at 13.
    \632\ See ISDA/SIFMA Letter at 18.
    \633\ See id.
---------------------------------------------------------------------------

    The Commission confirms that the existing exemption from Section
29(b) set forth in the Effective Date Release applies only to security-
based swaps entered into on or after July 16, 2011.\634\ Section
3C(e)(1) applies only to pre-enactment security-based swaps.\635\ As a
result, an extension of the Section 29(b) exemption in connection with
Section 3C(e)(1) would have had no effect. Therefore, there is no need
for the Commission to revise or extend the exemption from Section 29(b)
in connection with Section 3C(e)(1).\636\
---------------------------------------------------------------------------

    \634\ See Effective Date Release, 76 FR at 36305-306.
    \635\ See 15 U.S.C. 78c-3(e)(1).
    \636\ The same commenter also asked for confirmation that the
Commission provided the Section 29(b) exemption solely to promote
legal certainty and to avoid doubt as to the applicability of
Section 29(b) to other Exchange Act provisions and that the
Commission has ``not taken any view as to whether, when, or under
what circumstances Section 29(b) might apply to any provision of
Title VII of Dodd-Frank or rule or regulation thereunder, including
SBSR.'' ISDA/SIFMA Letter at 18. Because the Commission is not today
providing any relief related to the Section 29(b) exemption, the
Commission is not modifying the view set forth in the Effective Date
Release. See Effective Date Release, 76 FR at 36305-306.

---------------------------------------------------------------------------

H. Substituted Compliance Requests

    Rule 908(c) permits a person that potentially would become subject
to Regulation SBSR or a foreign financial regulatory authority to
submit a substituted compliance request with respect to the rules of a
foreign jurisdiction pertaining to regulatory reporting and public
dissemination of security-based swap transactions. The submission of a
substituted compliance request is elective; therefore, the Commission
is not establishing a ``compliance date'' for Rule 908(c).
Nevertheless, such persons may begin submitting substituted compliance
requests pursuant to the requirements of Rule 908(c) upon the effective
date of this release.

XI. Paperwork Reduction Act

    Certain amendments to Regulation SBSR that the Commission is
adopting today contain ``collection of information requirements''
within the meaning of the Paperwork Reduction Act of 1995
(``PRA'').\637\ The Commission published notices requesting comment on
the collection of information requirements relating to Regulation SBSR
in the Regulation SBSR Proposed Amendments Release \638\ and the U.S.
Activity Proposal \639\ and submitted relevant information to the
Office of Management and Budget (``OMB'') for review in accordance with
the PRA.\640\ In addition, the Commission adopted portions of
Regulation SBSR that contain collections of information requirements in
the Regulation SBSR Adopting Release.\641\ The titles of the
collections for Regulation SBSR are: (1) Rule 901--Reporting
Obligations--For Reporting Sides; (2) Rule 901--Reporting Obligations--
For Registered SDRs; (3) Rule 901--Reporting Obligations--For
Platforms; (4) Rule 901--Reporting Obligations--For Registered Clearing
Agencies; (5) Rule 901--Reporting Obligations--For New Broker-Dealer
Respondents; (6) Rule 902--Public Dissemination of Transaction Reports;
(7) Rule 903--Coded Information; (8) Rule 904--Operating Hours of
Registered Security-Based Swap Data Repositories; (9) Rule 905--
Correction of Errors in Security-Based Swap Information--For Reporting
Sides; (10) Rule 905--Correction of Errors in Security-Based Swap
Information--For Non-Reporting Sides; (11) Rule 905--Correction of
Errors in Security-Based Swap Information--For Registered SDRs; (12)
Rule 905--Correction of Errors in Security-Based Swap Information--For
Platforms; (13) Rule 905--Correction of Errors in Security-Based Swap
Information--For Registered Clearing Agencies; (14) Rule 905--
Correction of Errors in Security-Based Swap Information--For New
Broker-Dealer Respondents; (15) Rule 906(a)--Other Duties of All
Participants--For Registered SDRs; (16) Rule 906(a)--Other Duties of
All Participants--For Non-Reporting Sides; (17) Rule 906(b)--Other
Duties of All Participants--For All Participants; (18) Rule 906(c)--
Other Duties of All Participants--For Covered Participants; (19) Rule
906(c)--Other Duties of All Participants--For Platforms; (20) Rule
906(c)--Other Duties of All Participants--For Registered Clearing
Agencies; (21) Rule 906(c)--Other Duties of All Participants--For New
Broker-Dealer Respondents; (22) Rule 907--Policies and Procedures of
Registered Security-Based Swap Data Repositories; and (23) Rule
908(c)--Substituted Compliance (OMB Control No. 3235-0718). Compliance
with these collections of information requirements is mandatory. An
agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless the agency displays a
currently valid control number.
---------------------------------------------------------------------------

    \637\ 44 U.S.C. 3501 et seq.
    \638\ See Regulation SBSR Proposed Amendments Release, 80 FR at
14742-43.
    \639\ See U.S. Activity Proposal, 80 FR at 27503.
    \640\ 44 U.S.C. 3507; 5 CFR 1320.11.
    \641\ See Regulation SBSR Adopting Release, 80 FR at 14787.
---------------------------------------------------------------------------

    The Commission is adopting the amendments to Regulation SBSR
largely as proposed, with certain revisions. These amendments impact
Rules 900, 901, 902, 905, 906, 907, and 908 of Regulation SBSR.
    The hours and costs associated with complying with Regulation SBSR
constitute reporting and cost burdens imposed by each collection of
information. Certain estimates (e.g., the number of reporting sides,
the number of non-reporting sides, the number of participants, and the
number of reportable events \642\ pertaining to security-based swap
transactions) contained in the Commission's earlier PRA assessments
have been revised to reflect the amendments to Regulation SBSR being
adopted today, as well as additional information and data now available
to the Commission. The revised paperwork burdens estimated by the
Commission herein are consistent with those made in the Regulation SBSR
Proposed Amendments Release and the U.S. Activity Proposal. However, as
described in more detail below, certain estimates have been modified,
as necessary, to reflect the most recent data available to the
Commission.
---------------------------------------------------------------------------

    \642\ Reportable events include initial security-based swap
transactions, life cycle events, and corrections of errors in
previously reported information.
---------------------------------------------------------------------------

    The Commission requested comment on the collection of information
requirements associated with the amendments to Regulation SBSR proposed
in the Regulation SBSR Proposed Amendments Release and the U.S.
Activity Proposal. As noted above, the Commission received 25 comment
letters on the Regulation SBSR Proposed Amendments Release and the U.S.
Activity Proposal that specifically address Regulation SBSR. Any
comments related to the collection of information burdens potentially
arising from the proposed amendments are addressed below.

A. Definitions--Rule 900

    Rule 900 sets forth definitions of various terms used in Regulation
SBSR. In this release, the Commission is adopting certain amendments to
Rule 900, including amendments to the definition of ``participant'' in
existing Rule 900(u) \643\ and a new defined term ``widely accessible''
in Rule 900(tt).\644\ These changes, in themselves, will not result in
any new ``collection of information'' requirements within the meaning
of the PRA. Changes in definitions that might impact a collection of
information requirement are considered with the respective rule that
imposes the requirement.\645\
---------------------------------------------------------------------------

    \643\ Rule 900(u) has been amended such that the definition of
``participant'' now includes platforms, registered clearing agencies
that are required to report alpha dispositions pursuant to new Rule
901(e)(1)(ii), and registered broker-dealers that incur the duty to
report security-based swap transactions to a registered SDR pursuant
to new Rule 901(a)(2)(ii)(E)(4). See supra Section V(A).
    \644\ The adopted definition of ``widely accessible'' has the
effect of prohibiting a registered SDR from charging fees for or
imposing usage restrictions on the security-based swap transaction
data that it is required to publicly disseminate under Regulation
SBSR. See supra Section VIII(A).
    \645\ For example, as a result of the expanded definition of
``participant,'' additional entities now are subject to the
requirement in Rule 906(c) to establish, maintain, and enforce
written policies and procedures that are reasonably designed to
ensure compliance with any obligations to report information to a
registered SDR in a manner consistent with Regulation SBSR. See
infra Section XI(D)(2)(c). The new defined term ``widely
accessible,'' however, will not create a new collection of
information requirement or affect an existing collection of
information requirement.

---------------------------------------------------------------------------

B. Reporting Obligations--Rule 901

1. Existing Rule 901
    Existing Rule 901 specifies, with respect to initial security-based
swap transactions and life cycle events (and adjustments due to life
cycle events), who is required to report, what data must be reported,
when it must be reported, where it must be reported, and how it must be
reported. Existing Rule 901(a) sets forth a ``reporting hierarchy''
that specifies the side that has the duty to report a security-based
swap. Existing Rule 901(b) states that if there is no registered SDR
that will accept the report required by Rule 901(a), the person
required to make the report must report the transaction to the
Commission. Existing Rule 901(c) sets forth the primary trade
information and Rule 901(d) sets forth the secondary trade information
that must be reported. Existing Rule 901(e) requires the reporting of
life cycle events and adjustments due to life cycle events. Existing
Rule 901(f) requires a registered SDR to timestamp, to the second, any
information submitted to it pursuant to Rule 901, and existing Rule
901(g) requires a registered SDR to assign a transaction ID to each
security-based swap, or establish or endorse a methodology for
transaction IDs to be assigned by third parties. Existing Rule 901(h)
requires reporting sides to electronically transmit the information
required by Rule 901 in a format required by the registered SDR.
Existing Rule 901(i) requires reporting of pre-enactment security-based
swaps and transitional security-based swaps to the extent that
information about such transactions is available. Existing Rule 901(j)
generally provides the person with the duty to report 24 hours from the
time of execution to report the required information.
    For Reporting Sides. In the Regulation SBSR Adopting Release, the
Commission estimated that existing Rule 901 will impose an estimated
total first-year burden of approximately 1,394 hours \646\ per
reporting side for a total first-year burden of 418,200 hours for all
reporting sides.\647\ The Commission further estimated that existing
Rule 901 will impose ongoing annualized aggregate burdens of
approximately 687 hours \648\ per reporting side for a total aggregate
annualized cost of 206,100 hours for all reporting sides.\649\ The
Commission further estimated that existing Rule 901 will impose initial
and ongoing annualized dollar cost burdens of $201,000 per reporting
side, for total aggregate initial and ongoing annualized dollar cost
burdens of $60,300,000.\650\
---------------------------------------------------------------------------

    \646\ See 80 FR at 14676. The Commission derived its estimate
from the following: (355 hours (one-time hourly burden for
establishing an OMS) + 172 hours (one-time hourly burden for
establishing security-based swap reporting mechanisms) + 180 hours
(one-time hourly burden for compliance and ongoing support) = 707
hours (one-time total hourly burden). See Regulation SBSR Adopting
Release, 80 FR at 14676, n. 1074 (436 hours (annual-ongoing hourly
burden for internal order management) + 33.3 hours (revised annual-
ongoing hourly burden for security-based swap reporting mechanisms)
+ 218 hours (annual-ongoing hourly burden for compliance and ongoing
support) = 687.3 hours (one-time total hourly burden). See id. (707
one-time hourly burden + 687 revised annual ongoing hourly burden =
1,394 total first-year hourly burden).
    \647\ See Regulation SBSR Adopting Release, 80 FR at 14676. The
Commission derived its estimate from the following: (1,394 hours per
reporting side x 300 reporting sides) = 418,200 hours.
    \648\ See id.
    \649\ See id. The Commission derived its estimate from the
following: (687 hours per reporting side x 300 reporting sides) =
206,100 hours.
    \650\ See id. The Commission derived its estimate from the
following: ($201,000 per reporting side x 300 reporting sides) =
$60,300,000. See Cross-Border Proposing Release, 78 FR at 31113-15.
---------------------------------------------------------------------------

    For Registered SDRs. In the Regulation SBSR Adopting Release, the
Commission estimated that the first-year aggregate annualized burden on
registered SDRs associated with existing Rules 901(f) and (g) will be
2,720 burden hours, which corresponds to 272 burden hours per
registered SDR.\651\ The Commission also estimated that the ongoing
aggregate annualized burden associated with existing Rules 901(f) and
(g) will be 1,520 burden hours, which corresponds to 152 burden hours
per registered SDR.\652\
---------------------------------------------------------------------------

    \651\ See Regulation SBSR Adopting Release, 80 FR at 14676. See
Regulation SBSR Proposing Release, 75 FR at 75250. This figure is
based on the following: [(1,200) + (1,520)] = 2,720 burden hours,
which corresponds to 272 burden hours per registered SDR.
    \652\ See Regulation SBSR Adopting Release, 80 FR at 14676-77.
---------------------------------------------------------------------------

2. Rule 901--Amendment
    The amendments to Rule 901, as adopted herein, establish certain
additional requirements relating to the reporting of security-based
swap transactions. These amendments contain additional ``collection of
information requirements'' within the meaning of the PRA. The
amendments to Rule 901 are contained in three collections: (a) ``Rule
901--Reporting Obligations--For New Broker-Dealer Respondents''; (b)
``Rule 901--Reporting Obligations--For Platforms''; and (c) ``Rule
901--Reporting Obligations--For Registered Clearing Agencies.'' The
following discussion sets forth the additional burdens resulting from
the amendments to Rule 901 adopted in this release.
a. Rule 901--Reporting Obligations Resulting From Amendments to Rule
901(a)(2)(ii)(E)
i. Summary of Collection of Information
    In the U.S. Activity Proposal, the Commission proposed certain
amendments to Rule 901 to assign the duty to report security-based
swaps in certain cross-border situations. In this release, the
Commission is adopting those amendments as proposed. Under new Rule
901(a)(2)(ii)(E)(2), in a transaction between an unregistered U.S.
person and an unregistered non-U.S. person who is engaging in ANE
activity, the sides are required to select the reporting side. In
addition, if both sides are unregistered non-U.S. persons and both are
engaging in ANE activity, the sides are required to select the
reporting side. New Rule 901(a)(2)(ii)(E)(3) addresses the scenario
where one side is subject to Rule 908(b) and the other side is not--
i.e., one side includes only unregistered non-U.S. persons and that
side does not engage in any ANE activity, and the other side includes
an unregistered U.S. person or an unregistered non-U.S. person that is
engaging in ANE activity. Under Rule 901(a)(2)(ii)(E)(3), the side with
the unregistered U.S. person or the unregistered non-U.S. person
engaging in ANE activity is the reporting side. New Rule
901(a)(2)(ii)(E)(4) addresses the scenario where neither side includes
a counterparty that falls within Rule 908(b)--i.e., neither side
includes a registered person, a U.S. person, or a non-U.S. person
engaging in ANE activity--but the transaction is effected by or through
a registered broker-dealer (including a registered SB SEF). Under Rule
901(a)(2)(ii)(E)(4), the registered broker-dealer is required to report
the transaction.\653\
---------------------------------------------------------------------------

    \653\ In this release, the Commission also is adopting an
amendment to Rule 901(d)(9) that requires a registered broker-
dealer, if it is required to report a security-based swap under Rule
902(a)(2)(ii)(E)(4), to include in the transaction report its broker
ID. As discussed in Section XII(A)(6), infra, the requirement to
identify itself in such a transaction report is considered part of
the overall burden of establishing and operating the broker-dealer's
reporting infrastructure. As a result, the burdens associated with
identifying itself in the transaction report are included in the
burdens discussed below. See infra notes 916-917 and accompanying
discussion.
---------------------------------------------------------------------------

ii. Respondents
    In the Regulation SBSR Proposed Amendments Release, the Commission
estimated that there will be 300 reporting side respondents and that,
among the 300 reporting sides,

approximately 50 will likely have to register with the Commission as
security-based swap dealers and approximately five will likely have to
register as major security-based swap participants, restating an
estimate contained in the Regulation SBSR Adopting Release.\654\ The
Commission noted that these 55 reporting sides likely will account for
the vast majority of security-based swap transactions and transaction
reports, and that only a limited number of security-based swap
transactions would not include at least one of these larger
counterparties on either side.\655\
---------------------------------------------------------------------------

    \654\ See Regulation SBSR Proposed Amendments Release, 80 FR at
14788.
    \655\ See id.
---------------------------------------------------------------------------

    One commenter to the U.S. Activity Proposal recommended that the
Commission collect a more complete set of data to more precisely
estimate the number of non-U.S. persons that would be affected by the
proposed rules.\656\ In the U.S. Activity Adopting Release, the
Commission stated that, in the absence of comprehensive reporting
requirements for security-based swap transactions, and the fact that
the location of personnel that arrange, negotiate, or execute a
security-based swap transaction is not currently recorded by
participants, a more precise estimate of the number of non-U.S. persons
affected by the rule is not currently feasible. However, because the
Commission assumes that all transactions by foreign dealing entities
with other non-U.S. persons on U.S. reference entities are arranged,
negotiated, or executed by personnel located in the United States, the
analysis contained in the U.S. Activity Adopting Release results in an
estimate of the upper bound of the number of firms that would likely
assess the location of their dealing activity. The results of such an
assessment, already accounted for in the U.S. Activity Adopting
Release, determines the number of new respondents impacted by the
amendments to Rule 901.
---------------------------------------------------------------------------

    \656\ See ISDA I at 7. See also id. at 3 (arguing that ``the SEC
currently lacks the data necessary to precisely estimate . . . the
number of registered broker-dealers that intermediate SBS
transactions; and the number of additional non-U.S. persons that
might incur reporting obligations under the Proposal'').
---------------------------------------------------------------------------

    The Commission believes that the amendments to Rule
901(a)(2)(ii)(E), as adopted herein, will result in an additional 20
respondents that will be required to report transactions under the
amendments to Regulation SBSR.\657\ The Commission estimates that these
20 new respondents will consist solely of registered broker-dealers
that are required to report one or more security-based swaps by new
Rule 901(a)(2)(ii)(E)(4). The Commission acknowledges that amendments
to Rule 901(a)(2)(ii)(E) adopted in this release place reporting
obligations, in certain circumstances, on unregistered foreign dealing
entities, as explained in Section IX(G), supra, which may suggest that
a larger number of additional respondents is appropriate. However, the
Commission notes that, based on observed transaction data in TIW that
provided the basis for its estimate of the number of respondents used
in the Cross-Border Adopting Release and Regulation SBSR Adopting
Release, unregistered foreign dealing entities were already included in
the subset of 245 unregistered person respondents that will not be
registered security-based swap dealers or major security-based swap
participants.\658\
---------------------------------------------------------------------------

    \657\ The Commission is unable to determine, at this time, how
many of the non-U.S. persons performing the assessments discussed in
the U.S. Activity Adopting Release will result in those entities
being required to report transactions under Regulation SBSR. The
Commission is therefore basing these burdens on the assumption that
all entities performing the assessment will be required to report
under Regulation SBSR. Further, the 20 respondents here reflect the
30 registered-broker dealers discussed in the U.S. Activity
Proposal, reduced by ten to account for registered broker-dealers
that are likely also to register as SB SEFs.
    \658\ The 245 respondents that are unregistered persons are
calculated as follows: (300 reporting sides -50 registered security-
based swap dealers -5 registered major security-based swap
participants) = 245 unregistered persons that are reporting sides.
---------------------------------------------------------------------------

iii. Total Initial and Annual Reporting Burdens
    Pursuant to Rule 901, all security-based swap transactions must be
reported to a registered SDR or to the Commission. Together, paragraphs
(a), (b), (c), (d), (e), (h), and (j) of Rule 901 set forth the
parameters that govern how covered transactions are reported. These
reporting requirements impose initial and ongoing burdens on
respondents. The Commission believes that these burdens will be a
function of, among other things, the number of reportable events and
the data elements required to be reported for each such event.
    Respondents that fall under the reporting hierarchy in Rule
901(a)(2)(ii) incur certain burdens as a result thereof with respect to
their reporting of covered transactions. As stated above, the
Commission believes that an estimate of 20 additional respondents will
incur the duty to report under Regulation SBSR. This estimate includes
all persons that will incur a reporting duty under the amendments to
Regulation SBSR that are not already subject to burdens under existing
Rule 901, as adopted in the Regulation SBSR Adopting Release.
    In the Regulation SBSR Adopting Release, the Commission estimated
that there will likely be approximately 3 million reportable events per
year under Rule 901.\659\ The Commission further estimated that
approximately 2 million of these reportable events will consist of
uncleared transactions. The Commission estimated that 2 million of the
3 million total reportable events will consist of the initial reporting
of security-based swaps as well as the reporting of any life cycle
events. The Commission also estimated that of the 2 million reportable
events, approximately 900,000 will involve the reporting of new
security-based swap transactions, and approximately 1,100,000 will
involve the reporting of life cycle events under Rule 901(e).\660\
---------------------------------------------------------------------------

    \659\ See Regulation SBSR Adopting Release, 80 FR at 14675.
    \660\ The Commission notes that it is adopting an amendment to
Rule 901(e)(2). Existing Rule 901(e)(2) states in relevant part that
a life cycle event must be reported ``to the entity to which the
original security-based swap transaction was reported'' (emphasis
added). As amended, Rule 901(e)(2) now states that a life cycle
event would have to be reported ``to the entity to which the
original security-based swap transaction will be reported or has
been reported'' (emphasis added). This amendment accounts for the
possibility that persons with a duty to report a transaction
generally may do so up to 24 hours after the time of execution, a
registered clearing agency might submit a report of a termination of
an alpha to the alpha SDR before the alpha SDR has received the
transaction report of the alpha transaction itself. See supra
Section III(I). The Commission does not believe that this amendment
to Rule 901(e)(2) gives rise to any PRA burdens not already
accounted for in its analysis of burdens under Rule 901. See infra
Section XI(B)(2)(b).
---------------------------------------------------------------------------

    Based on the Commission's assessment of the effect of the
amendments to Rule 901(a)(2)(ii)(E) adopted herein, the Commission
believes that there will be approximately 2,700 additional reportable
events per year under Rule 901.\661\ Using a similar approach to the
Regulation SBSR Adopting Release,\662\ while also accounting for
security-based swaps that will be reported by a registered broker-
dealer, the Commission estimates that, of the 2,700 new reportable
events, 1,512 will involve the reporting of new security-based swap
transactions, and approximately 1,188 will involve the

reporting of life cycle events under Rule 901(e).\663\
---------------------------------------------------------------------------

    \661\ See U.S. Activity Proposal, 80 FR at 27504.
    \662\ See 80 FR at 14676. The Commission notes that, while the
approach for determining the burdens is similar to that used in the
Regulation SBSR Adopting Release, the aggregate burden hours for all
aspects of Rule 901differ slightly as a result of these new
respondents having to report a different number of reportable
events.
    \663\ See U.S. Activity Proposal, 80 FR at 27504. The Commission
expects 540 reportable events (2,700 x 0.2) to be new security-based
swap transactions reported by registered broker-dealers, and 972
reportable events to be other new security-based swap transactions
that would be required to be reported under the rule ((2,700 -540) x
0.45), for a total of 1,512 reportable events that are new security-
based swap transactions. The remaining 1,188 reportable events
((2,700 -540) x 0.55) are estimated to be life cycle events
reportable under Rule 901(e).
---------------------------------------------------------------------------

    Based on these estimates, the Commission believes that Rule 901(a)
will result in the additional new respondents resulting from amendments
to Rule 901(a)(2)(ii)(E), having a total burden of 7.6 hours
attributable to the initial reporting of security-based swaps by
respondents to registered SDRs under Rules 901(c) and 901(d) over the
course of a year.\664\ The Commission further estimates that these
respondents will have a total burden of 5.9 hours attributable to the
reporting of life cycle events under Rule 901(e) over the course of a
year.\665\ Therefore, the Commission believes that the amendments to
Rule 901(a)(2)(ii)(E), as adopted herein, will result in a total
reporting burden for respondents under Rules 901(c) and (d) along with
the reporting of life cycle events under Rule 901(e) of 14 burden hours
per year. The Commission believes that many reportable events will be
reported through electronic means and that the ratio of electronic
reporting to manual reporting is likely to increase over time. The
Commission believes that the bulk of the burden hours will be
attributable to manually reported transactions.\666\ Thus, respondents
that capture and report transactions electronically will likely incur
fewer burden hours than those respondents that capture and report
transactions manually.
---------------------------------------------------------------------------

    \664\ The Commission calculated the following: ((1,512 x 0.005)/
(20 respondents)) = 0.38 burden hours per respondent or 7.6 total
burden hours attributable to the initial reporting of security-based
swaps. See U.S. Activity Proposal, 80 FR at 27505 (adjusted to
reflect revised number of respondents). In the Regulation SBSR
Adopting Release, the Commission estimated that it would take
approximately 0.005 hours for each security-based swap transaction
to be reported. See 80 FR at 14676, n. 1073. See also Regulation
SBSR Proposing Release, 75 FR at 75249, n. 195.
    \665\ The Commission calculated the following: ((1,188 x 0.005)/
(20 respondents)) = 0.30 burden hours per reporting side or 5.9
total burden hours attributable to the reporting of life cycle
events under Rule 901(e). See U.S. Activity Proposal, 80 FR at 27505
(adjusted to reflect revised number of respondents). In the
Regulation SBSR Adopting Release, the Commission estimated that it
would take approximately 0.005 hours for each security-based swap
transaction to be reported. See 80 FR 14676, n. 1073. See also
Regulation SBSR Proposing Release, 75 FR at 75249, n. 195.
    \666\ See Regulation SBSR Adopting Release, 80 FR at 14676.
---------------------------------------------------------------------------

    Based on the foregoing and applying the same calculation methods
used in the Regulation SBSR Adopting Release, the Commission estimates
that the amendments to Rule 901 proposed in the U.S. Activity Proposal
and adopted herein will impose an estimated total first-year burden of
approximately 1,362 hours per respondent \667\ for a total first-year
burden of 27,240 hours for all additional respondents that will incur
the duty to report under the adopted amendments to Rule
901(a)(2)(ii)(E)(1)-(4).\668\ The Commission estimates that the
amendments to Rule 901 will impose ongoing annualized aggregate burdens
of approximately 655 hours \669\ per respondent for a total aggregate
annualized burden of 13,100 hours for those respondents.\670\ The
Commission further estimates that the amendments to Rule 901 will
impose initial and ongoing annualized dollar cost burdens of $201,000
per respondent, for total aggregate initial and ongoing annualized
dollar cost burdens of $4,020,000.\671\
---------------------------------------------------------------------------

    \667\ The Commission derived its estimate from the following:
(355 hours (one-time hourly burden for establishing an OMS) + 172
hours (one-time hourly burden for establishing security-based swap
reporting mechanisms) + 180 hours (one-time hourly burden for
compliance and ongoing support) = 707 hours (one-time total hourly
burden). See U.S. Activity Proposal, 80 FR at 27505, n. 454 (436
hours (annual ongoing hourly burden for internal order management) +
0.68 hours (revised annual ongoing hourly burden for security-based
swap reporting mechanisms as a result of reduced estimate of number
of respondents) + 218 hours (annual-ongoing hourly burden for
compliance and ongoing support) = 654.7 hours (one-time total hourly
burden). See U.S. Activity Proposal, 80 FR at 27505, n. 454 (revised
to take into account reduced estimate of number of respondents) (707
one-time hourly burden + 654.7 revised annual-ongoing hourly burden
= 1,362 total first-year hourly burden).
    \668\ The Commission derived its estimate from the following:
(1,362 hours per respondent x 20 respondents) = 27,240 hours.
    \669\ See supra note 667.
    \670\ The Commission derived its estimate from the following:
(655 hours per respondent x 20 respondents) = 13,100 hours.
    \671\ The Commission derived its estimate from the following:
($201,000 per respondent x 20 respondents) = $4,020,000. See U.S.
Activity Release, 80 FR at 27505 (providing preliminary estimates
based on a higher number of respondents). See also Regulation SBSR
Adopting Release, 80 FR at 14676, nn. 1066 and 1078.
---------------------------------------------------------------------------

b. Rule 901--Reporting Obligations for Platforms and Clearing Agencies
Resulting From Amendments to Rules 901(a)(1) and (2) and Platforms and
Reporting Sides Resulting From Amendments to Rule 901(a)(3)

i. Summary of Collection of Information

    In addition to amendments to Rule 901 to assign the duty to report
security-based swaps in certain cross-border situations proposed in the
U.S. Activity Proposal, in this release the Commission also is
assigning the duty to report security-based swaps that are clearing
transactions or are executed on a platform and will be submitted to
clearing. To facilitate such reporting, the Commission is adopting
amendments to Rules 901(a)(1), (a)(2)(i), and (a)(3). Specifically,
under new Rule 901(a)(1), if a security-based swap is executed on a
platform and will be submitted to clearing, the platform on which the
transaction was executed shall have the duty to report the transaction
to a registered SDR. New Rule 901(a)(2)(i) assigns the reporting duty
for a clearing transaction to the registered clearing agency that is a
counterparty to the security-based swap. New Rule 901(a)(3) requires
any person that has a duty to report a security-based swap that is
submitted to clearing--which would be a platform or a reporting side--
to provide the registered clearing agency with the transaction ID of
the alpha and the identity of the registered SDR to which the alpha
will be reported or has been reported.
ii. Respondents
    The amendments to Rules 901(a)(1) and (a)(2)(i) adopted herein
assign reporting duties for security-based swap transactions, in
certain enumerated cases set forth in these rules, to platforms and
registered clearing agencies, respectively. The Commission estimates
that these amendments to Rule 901(a) will result in 14 additional
respondents incurring the duty to report under Regulation SBSR: Ten
platforms and four registered clearing agencies.\672\ Amended Rule
901(a)(3) will require a person--either the platform upon which the
security-based swap was executed or the reporting side for those
security-based swaps other than clearing transactions--to report, for
those security-bases swaps submitted to a registered clearing agency,
the transaction ID of the submitted security-based swap and the
identity of the registered SDR to which the transaction will be or has
been reported. The Commission believes that new Rule 901(a)(3), as
amended, will place

reporting obligations on 300 reporting sides \673\ and ten
platforms.\674\
---------------------------------------------------------------------------

    \672\ The Commission made the same preliminary estimate of the
number of respondents resulting from these proposed amendments in
the Regulation SBSR Proposed Amendments Release. See 80 FR at 14788.
    \673\ As stated above, the Commission has estimated that there
would be 300 reporting sides plus the 20 new broker-dealer
respondents discussed in Section XI(B)(2)(a), supra. See also supra
note 657.
    \674\ Although new Rule 901(a)(2)(ii)(E)(4) requires a
registered broker-dealer to report security-based swaps in some
circumstances, the Commission believes that registered broker-
dealers will not incur duties under Rule 901(a)(3). A registered
broker-dealer would incur the reporting duty only if it effects a
transaction for unregistered non-U.S. counterparties, neither of
which is engaging in ANE activity. If the unregistered non-U.S.
direct counterparties have guarantors that would clear the
transaction on their behalf, it is likely that one or both of these
guarantors would occupy a higher rung on the reporting hierarchy
such that the duty would not fall to the registered broker-dealer
under Rule 901(a)(2)(ii)(E)(4). Therefore, it is unlikely that a
broker-dealer that effects such a transaction would incur the duty
under Rule 901(a)(3) to provide the transaction ID and the identity
of the alpha SDR to the registered clearing agency.
---------------------------------------------------------------------------

iii. Total Initial and Annual Reporting Burdens
(a) Platforms and Registered Clearing Agencies
    Pursuant to Rule 901, all security-based swap transactions must be
reported to a registered SDR or to the Commission. Together, paragraphs
(a), (b), (c), (d), (e), (h), and (j) of Rule 901 set forth the
parameters that reporting entities must follow to report security-based
swap transactions. Because platforms and registered clearing agencies
now have the duty to report, initial and ongoing burdens will be placed
on these entities. The Commission continues to believe that these
burdens will be a function of, among other things, the number of
reportable events and the data elements required to be reported for
each such event.
    In the Regulation SBSR Adopting Release, the Commission estimated
that respondents will face three categories of burdens to comply with
Rule 901.\675\ The Commission believes that platforms and registered
clearing agencies will face the same categories of burdens as those
identified in the Regulation SBSR Adopting Release for other types of
respondents. First, each platform and registered clearing agency will
likely have to develop the ability to capture the relevant transaction
information.\676\ Second, each platform and registered clearing agency
will have to implement a reporting mechanism. Third, each platform and
registered clearing agency will have to establish an appropriate
compliance program and support for the operation of any system related
to the capture and reporting of transaction information. The Commission
continues to believe that platforms and registered clearing agencies
will need to develop capabilities similar to those highlighted in the
Regulation SBSR Adopting Release in order to be able to capture and
report security-based swap transactions. The Commission also continues
to believe that, once a platform or registered clearing agency's
reporting infrastructure and compliance systems are in place, the
burden of reporting each individual reportable event will be small when
compared to the burdens of establishing the reporting infrastructure
and compliance systems.\677\ The Commission continues to believe that
all of the reportable events, for which platforms and registered
clearing agencies will be responsible for reporting, will be reported
through electronic means.\678\
---------------------------------------------------------------------------

    \675\ See Regulation SBSR Adopting Release, 80 FR at 14675-77.
    \676\ In the Regulation SBSR Adopting Release, the Commission
discussed the development, by reporting sides, of an internal order
and trade management system. See 80 FR at 14675-76. The Commission
continues to believe that the costs of developing a transaction
processing system are comparable to the costs discussed therein.
Although the actual reporting infrastructure needed by platforms and
registered clearing agencies could have some attributes that differ
from the attributes of an internal order and trade management
system, the Commission nonetheless believes that the cost of
implementing a transaction processing system, and establishing an
appropriate compliance program and support for the operation of the
system, will be similar to the costs for reporting sides discussed
in the Regulation SBSR Adopting Release.
    \677\ In the Regulation SBSR Adopting Release, the Commission
reiterated its belief that reporting specific security-based swap
transactions to a registered SDR--separate from the establishing of
infrastructure and compliance systems that support reporting--will
impose an annual aggregate cost of approximately $5,400,000. See 80
FR at 14675-77.
    \678\ As a result of the amendment to Rule 901(h) adopted
herein, which replaces ``reporting side'' with ``person having the
duty to report,'' all persons who have a duty to report under
Regulation SBSR must electronically transmit the information
required by Rule 901 in a format required by the registered SDR. The
Commission believes that the infrastructure build described above
will necessarily include the ability to electronically transmit to a
registered SDR the information required by Rule 901, such that any
burdens resulting from the amendment to Rule 901(h) are included
within the Rule 901 burdens for persons with the duty to report that
are not reporting sides.
---------------------------------------------------------------------------

    In the Regulation SBSR Adopting Release, the Commission estimated
that the total burden placed upon reporting sides as a result of
existing Rule 901 will be approximately 1,361 hours \679\ per reporting
side during the first year,\680\ before taking into account the
reporting of individual reportable events. The Commission believes that
the per-entity cost will be comparable for platforms and registered
clearing agencies, resulting in a total first-year burden of 1,361
hours and an annual burden of 654 hours for each platform and
registered clearing agency, before taking into account the reporting of
individual reportable events, under new Rules 901(a)(1) and (a)(2)(i),
as adopted herein.
---------------------------------------------------------------------------

    \679\ The Commission derived its estimate from the following:
(355 hours (one-time hourly burden for establishing an OMS) + 172
hours (one-time hourly burden for establishing security-based swap
reporting mechanisms) + 180 hours (one-time hourly burden for
compliance and ongoing support) = 707 hours (one-time total hourly
burden). See Regulation SBSR Proposed Amendments Release, 80 FR at
14789, n. 298 (436 hours (annual ongoing hourly burden for internal
order management) + 218 hours (annual-ongoing hourly burden for
compliance and ongoing support) = 654 hours (one-time total hourly
burden. See id. (707 one-time hourly burden + 654 revised annual-
ongoing hourly burden = 1,361 total first-year hourly burden).
    \680\ See Regulation SBSR Adopting Release, 80 FR at 14675-77.
---------------------------------------------------------------------------

    In the Regulation SBSR Adopting Release, the Commission estimated
that there will be approximately 3 million reportable events per year
under Rule 901, of which approximately 2 million will consist of
uncleared transactions (i.e., those transactions that will be reported
by a reporting side).\681\ In the Regulation SBSR Adopting Release, the
Commission did not assign reporting duties for the remaining 1 million
annual reportable events, which consist of platform-executed alphas,
clearing transactions, and any life cycle events pertaining to these
two types of transactions.
---------------------------------------------------------------------------

    \681\ See id.
---------------------------------------------------------------------------

    In this release, the Commission is adopting amendments to Rule 901
that assign the reporting duty for these 1 million reportable events to
platforms and registered clearing agencies. The Commission estimates
that, of the 1 million reportable events, approximately 370,000 will be
new security-based swap transactions.\682\ Of these 370,000 new
transactions, the Commission estimates that platforms will be
responsible for reporting approximately one-third, or 120,000, of
them.\683\ The Commission estimates that the amendments to Rule 901(a)
will result in platforms having a total burden of 600 hours
attributable to the reporting of security-based swaps under Rule 901
over the course of a year, or 60 hours per platform.\684\
---------------------------------------------------------------------------

    \682\ See Regulation SBSR Amendments Proposing Release, 80 FR at
14777, n. 235.
    \683\ Since only platform-executed security-based swaps that
will be submitted to a registered clearing agency for clearing are
subject to this release, platforms are not responsible for any life
cycle event reporting under Rule 901(e). See Regulation SBSR
Amendments Proposing Release, 80 FR at 14777.
    \684\ The Commission calculates the following: ((120,000 x
0.005)/(10 platforms)) = 60 burden hours per platform or 600 total
burden hours attributable to the reporting of security-based swaps.
See Regulation SBSR Proposed Amendments Release, 80 FR at 14789-90.
In the Regulation SBSR Proposing Release, the Commission estimated
that it would take approximately 0.005 hours for each security-based
swap transaction to be reported. See 75 FR at 75249, n. 195.

---------------------------------------------------------------------------

    The Commission estimates that registered clearing agencies will be
responsible for reporting 880,000 reportable events.\685\ These
reportable events consist of 250,000 initial security-based swaps along
with 630,000 life cycle events. The Commission estimates that the
amendments to Rule 901(a) will result in registered clearing agencies
having a total burden of 1,250 hours attributable to the reporting of
new security-based swaps to registered SDRs over the course of a year,
or 312.5 hours per registered clearing agency.\686\ The Commission
estimates that the amendments to Rule 901(a) will result in registered
clearing agencies having a total burden of 3,150 hours attributable to
the reporting of life cycle events to registered SDRs under Rule 901(e)
over the course of a year, or 787.5 hours per registered clearing
agency.\687\ The Commission continues to believe that the amendments
will result in a total reporting burden for registered clearing
agencies under Rules 901(c) and 901(d) along with the reporting of life
cycle events under Rule 901(e) of 4,400 burden hours, or 1,100 hours
per registered clearing agency.\688\ The Commission believes that all
reportable events that will be reported by platforms and registered
clearing agencies pursuant to these amendments will be reported through
electronic means.
---------------------------------------------------------------------------

    \685\ As is discussed above, the Commission estimates that
platforms will be responsible for reporting only approximately
120,000 of the 1 million new reportable events and registered
clearing agencies will be responsible for reporting the remainder.
    \686\ The Commission calculates the following: ((250,000
security-based swaps x 0.005 hours per security-based swap)/(4
registered clearing agencies)) = 312.5 burden hours per registered
clearing agency or 1,250 total burden hours attributable to the
reporting of such security-based swaps. See Regulation SBSR Proposed
Amendments Release, 80 FR at 14789-90. In the Regulation SBSR
Proposing Release, the Commission estimated that it would take
approximately 0.005 hours for each security-based swap to be
reported. See 75 FR at 75249, n. 195.
    \687\ The Commission calculates the following: ((630,000
security-based swaps x 0.005 hours per security-based swap)/(4
registered clearing agencies)) = 787.5 burden hours per registered
clearing agency or 3,150 total burden hours attributable to the
reporting of life cycle events under Rule 901(e). See Regulation
SBSR Proposed Amendments Release, 80 FR at 14789-90. In the
Regulation SBSR Proposing Release, the Commission estimated that it
would take approximately 0.005 hours for each security-based swap to
be reported. See 75 FR at 75249, n. 195.
    \688\ As is discussed immediately above, the Commission believes
that registered clearing agencies would incur a burden of 1,250
hours attributable to the reporting of security-based swaps pursuant
to Rule 901(a)(2)(i) along with a burden of 3,150 hours attributable
to the reporting of life cycle events under Rule 901(e). As
discussed in note 683, supra, a platform is not responsible for the
reporting of any life cycle events of any platform-executed
security-based swap that will be submitted to clearing.
---------------------------------------------------------------------------

    The Commission estimates that the amendments to Rule 901 will
impose ongoing annualized aggregate burdens of approximately 714 hours
per platform \689\ for a total aggregate annualized burden of 7,140
hours for all platforms.\690\ The Commission further believes that the
first year burden on platforms will be 1,421 burden hours per platform
\691\ for a total first year burden of 14,210 burden hours for all
platforms.\692\ The Commission further estimates that the amendments to
Rule 901 will impose initial and ongoing annualized dollar cost burdens
of $201,000 per platform,\693\ for total aggregate initial and ongoing
annualized dollar cost burden of $2,010,000.\694\
---------------------------------------------------------------------------

    \689\ As discussed above, the Commission believes that platforms
will incur a burden of 654 hours per year (before taking into
account individual transaction reporting) plus a transaction
reporting burden of 60 hours per year resulting in a total annual
burden per platform of 714 burden hours.
    \690\ The Commission derived its estimate from the following:
(714 hours per platform x 10 platforms) = 7,140 hours.
    \691\ As discussed above, the Commission believes that platforms
will incur an initial burden of 707 hours plus an annual burden of
714 hours for a total burden of 1,421 per platform.
    \692\ The Commission derived its estimate from the following:
(1,421 hours per platform x 10 platforms) = 14,210 hours.
    \693\ See Regulation SBSR Proposed Amendments Release, 80 FR at
14789, n. 303 (these burdens reflect the dollar costs of hardware
and software related expenses, including necessary back-up and
redundancy, per SDR connection, for two SDR connections, along with
cost of storage capacity, reduced to account only for platforms).
    \694\ The Commission derived its estimate from the following:
($201,000 per reporting person x 10 platforms) = $2,010,000.
---------------------------------------------------------------------------

    The Commission estimates that the amendments to Rule 901 will
impose ongoing annualized aggregate burdens of approximately 1,754
hours per registered clearing agency \695\ for a total aggregate
annualized burden of 7,016 hours for all registered clearing
agencies.\696\ The Commission further believes that the first year
burden on registered clearing agencies will be 2,461 burden hours per
registered clearing agency \697\ for a total first year burden of 9,844
burden hours for all registered clearing agencies.\698\ The Commission
further estimates that the amendments to Rule 901 will impose initial
and ongoing annualized dollar cost burdens of $401,000 per registered
clearing agency,\699\ for total aggregate initial and ongoing
annualized dollar cost burden of $1,604,000.\700\
---------------------------------------------------------------------------

    \695\ As discussed above, the Commission believes that
registered clearing agencies will incur a burden of 654 hours per
year (before taking into account individual transaction reporting)
plus a transaction reporting burden of 1,100 hours per year
resulting in a total annual burden of 1,754 burden hours.
    \696\ The Commission derived its estimate from the following:
(1,754 hours per registered clearing agency x 4 registered clearing
agencies) = 7,016 hours.
    \697\ As discussed above, the Commission believes that platforms
will incur an initial burden of 707 hours plus an annual burden of
1,754 hours for a total burden of 2,461 per registered clearing
agency.
    \698\ The Commission derived its estimate from the following:
(2,461 hours per registered clearing agency x 4 registered clearing
agencies) = 9,844 hours.
    \699\ See Regulation SBSR Proposed Amendments Release, 80 FR at
14789, n. 303 (reduced to account only for registered clearing
agencies). The Commission estimates that a registered clearing
agency, as a result of newly adopted Rule 901(e)(1)(ii), might have
to establish connectivity to an alpha SDR, to which it might not
otherwise establish connectivity. Accordingly, the Commission
estimates that each registered clearing agency will connect to four
registered SDRs. The Commission derived the total estimated expense
for registered clearing agencies as (($100,000 hardware- and
software-related expenses, including necessary backup and
redundancy, per SDR connection) x (4 SDR connections per registered
clearing agency)) + ($1,000 cost of storage capacity) = $401,000 per
registered clearing agency. See Regulation SBSR Proposed Amendments
Release, 80 FR at 14776 (estimating the hardware- and software-
related expenses per SDR connection at $100,000). This estimate
assumes that the systems required to establish connectivity to a
registered SDR to meet requirements under Rule 901(e)(1)(ii) are
similar to those required by reporting sides to meet regulatory
reporting requirements. To the extent that a registered clearing
agency is able to utilize a limited purpose connection to report
only the information required by Rule 901(e)(1)(ii), the cost of
establishing such a connection could be less.
    \700\ The Commission derived its estimate from the following:
($401,000 per registered clearing agency x 4 registered clearing
agencies) = $1,604,000.
---------------------------------------------------------------------------

    The Commission recognizes that some entities that will qualify as
platforms or registered clearing agencies may have already spent time
and resources building the infrastructure that will support their
eventual reporting of security-based swaps. The Commission notes that,
as a result, the burdens and costs estimated herein could be greater
than those actually incurred by affected parties as a result of
compliance with the amendments to Rule 901(a). Nonetheless, the
Commission believes that its estimates represent a reasonable approach
to estimating the paperwork burdens associated with the amendments to
Rule 901(a).
(b) Rule 901(a)(3) Burdens
    Rule 901(a)(3), as adopted herein, requires a person who has the
duty to report an alpha security-based swap to promptly provide the
registered clearing agency to which the alpha has been submitted the
transaction ID of the submitted security-based swap and the identity of
the registered SDR to which the transaction will be or has been

reported. Entities that report alphas to registered SDRs also will
already have established the infrastructure needed to submit security-
based swaps to a registered clearing agency that acts as a central
counterparty; this connectivity to a registered clearing agency is not
required by Regulation SBSR. Rule 901(a)(3) will require the person who
reports the alpha to a registered SDR to provide the registered
clearing agency two additional data elements--the transaction ID of the
alpha and the identity of the alpha SDR--along with all of the other
transaction information that must be submitted to clear the
transaction. The Commission estimates that the additional one-time
burden related to the development of the ability to capture and submit
these two additional data elements will be 10 burden hours per
respondent and the additional one-time burden related to the
implementation of a reporting mechanism will be 6 burden hours per
respondent.\701\ The Commission estimates that the additional ongoing
burden related to the ability to capture the additional specific data
elements required by amended Rule 901(a)(3) will be 10 burden hours and
the additional ongoing burden related to the maintenance of the
reporting mechanism will be 2 burden hours, per platform and reporting
side.\702\
---------------------------------------------------------------------------

    \701\ The Commission estimates that the additional burdens
related to programming systems to allow for the reporting of the
additional data fields will be: [(Sr. Programmer (5 hours) + Sr.
Systems Analyst (5 hours)) = 10 burden hours (development of the
ability to capture transaction information); (Sr. Programmer (3
hours) + Sr. Systems Analyst (3 hours)) = 6 burden hours
(implementation of reporting mechanism)]. The total one-time burden
associated with Rule 901(a)(3) will be 16 burden hours per
respondent for a total one-time burden of 4,960 hours (16 x 310
(i.e., 300 reporting sides + 10 platforms)). See Regulation SBSR
Proposed Amendments Release, 80 FR at 14790, n. 315.
    \702\ The Commission estimates that the additional burdens
related to the reporting of these additional data fields will be:
[(Sr. Programmer (5 hours) + Sr. Systems Analyst (5 hours)) = 10
burden hours (maintenance of transaction capture system); (Sr.
Programmer (1 hour) + Sr. Systems Analyst (1 hour)) = 2 burden hours
(maintenance of reporting mechanism)]. The total ongoing burden
associated with amended Rule 901(a) will be 12 burden hours per
platform and reporting side for a total ongoing burden of 3,720
hours (12 x 310 (i.e., 300 reporting sides + 10 platforms)). For the
Commission's preliminary estimate of the burdens associated with
Rule 901(a)(3), see Regulation SBSR Proposed Amendments Release, 80
FR at 14790, n. 316.
---------------------------------------------------------------------------

(c) Bunched Order Executions and Allocations
    Bunched order executions and the security-based swaps that result
from their allocation are types of security-based swaps that must be
reported pursuant to Rule 901(a). In the Regulation SBSR Adopting
Release, the Commission provided guidance regarding how Regulation SBSR
applies to uncleared bunched order executions and the security-based
swaps that result from their allocation.\703\ In Section VI, supra, the
Commission provides guidance regarding how Regulation SBSR applies to
bunched order executions that will be submitted to clearing and the
security-based swaps that result from the allocation of any bunched
order execution, if the resulting security-based swaps are cleared.
---------------------------------------------------------------------------

    \703\ See 80 FR at 14626-27.
---------------------------------------------------------------------------

    This guidance does not increase the number of respondents under
Regulation SBSR or increase the burdens for any respondent.\704\ The
estimates of the number of reportable events provided by the Commission
in the Regulation SBSR Adopting Release included bunched order
executions and the security-based swaps that result from their
allocation. Thus, there are no burdens associated with this guidance
that the Commission has not already taken into account.
---------------------------------------------------------------------------

    \704\ For the Commission's preliminary estimate of the burdens
associated with this guidance, see Regulation SBSR Proposed
Amendments Release, 80 FR at 14790.
---------------------------------------------------------------------------

(d) Prime Brokerage Transactions
    In the Regulation SBSR Proposed Amendments Release, the Commission
set forth the application of Regulation SBSR to a prime brokerage
transaction involving three security-based swap legs. In Section
VII(B)(2), supra, the Commission supplements its views to account for
cases where the documentation among the relevant market participants
provides for a two-legged structure rather than a three-legged
structure. Since the Commission's initial estimates of the number of
reportable events provided for the reporting of all legs of a prime
brokerage transaction,\705\ those estimates assumed that prime
brokerage transactions involved a three-legged structure. In light of
the possibility that some prime brokerage transactions may involve only
two legs, the Commission may have overestimated the total number of
reportable events arising from prime brokerage transactions. However,
because prime brokerage transactions are unlikely to represent a
significant percentage of reportable events, the Commission continues
to believe that its previous estimate of reportable events is
reasonable.\706\
---------------------------------------------------------------------------

    \705\ See Regulation SBSR Proposed Amendments Release, 80 FR at
14785, n. 276.
    \706\ Combining the Commission's estimates in the Regulation
SBSR Adopting Release and this release, the Commission believes that
there will be approximately 3 million reportable events per year
under Rules 901 and 905. Two million of those reportable events were
required to be reported pursuant to provisions adopted in the
Regulation SBSR Adopting Release, and 1 million are required to be
reported by amendments adopted herein. See supra Section
XI(B)(2)(a)(iv).
---------------------------------------------------------------------------

3. Rule 901--Aggregate Total PRA Burdens and Costs
    Based on the foregoing, the Commission estimates the following
aggregate total PRA burdens and costs, by category of entity, resulting
from Rule 901, as contained in the Regulation SBSR Adopting Release and
as amended in this release.
a. For Platforms
    As discussed in Section XI(B)(2)(b)(iii)(a), supra, the Commission
estimates that the hourly burden resulting from the amendments to Rule
901(a)(1) on platforms would be 1,421 hours in the first year and 714
hours annually thereafter, per platform. The Commission further
estimates that the annual dollar cost of the amendments will be
$201,000. The Commission also estimates that the hourly burden
resulting from the amendments to Rule 901(a)(3) on platforms will be 28
hours in the first year and 12 hours annually thereafter, per platform.
In aggregate, the Commission estimates that the amendments to Rule 901
will result in a first year burden 1,449 hours per platform for a total
first year hourly burden of 14,490 hours. The Commission further
estimates that the annual aggregate burden resulting from the
amendments to Rule 901 will be 726 hours per platform, for a total
annual hourly burden of 7,260 hours. Finally, the Commission estimates
that the annual dollar cost of the amendments will be $201,000 per
platform, for a total annual dollar cost of $2,010,000.
b. For Registered Clearing Agencies
    As discussed in Section XI(B)(2)(b)(iii)(a), supra, the Commission
estimates that the hourly burden resulting from the amendments to Rule
901(a)(2) on registered clearing agencies will be 2,461 hours in the
first year and 1,754 hours annually thereafter, per registered clearing
agency. The Commission estimates that the total hourly burden on all
registered clearing agencies will be 9,844 in the first year and 7,016
annually thereafter. The Commission further estimates that the annual
dollar cost of the amendments will be $401,000 per registered clearing
agency, or $1,604,000 for all registered clearing agencies.

c. For New Broker-Dealer Respondents
    The Commission believes that, as a result of amendments to Rule
901(a)(2)(ii)(E) adopted herein, there will be 20 new broker-dealer
respondents who will incur reporting responsibilities, and that they
will incur first-year burdens of 1,362 hours. The Commission further
believes that these new respondents will incur annual burdens of 655
hours each year thereafter. In addition, the Commission believes that
these new respondents will incur annual costs of $201,000.
d. For Reporting Sides
    In the Regulation SBSR Adopting Release, the Commission estimated
that reporting sides will incur a first-year burden of 1,394 hours per
reporting side and an hourly burden of 687 hours annually
thereafter.\707\ As a result of the amendments to Rule 901(a)(3)
adopted herein, the Commission believes that these burdens will
increase. The Commission believes that reporting sides will have a new
first-year burden of 1,422 hours per reporting side,\708\ or 426,600
hours for all reporting sides.\709\ The Commission further estimates
that reporting sides will have a new annual burden after the first year
of 699 hours per reporting side,\710\ or 209,700 hours for all
reporting sides.\711\ The Commission also believes that the annual
dollar cost of Rule 901 to reporting sides will remain unchanged at
$201,000 per reporting side, or $60,300,000 for all reporting sides.
---------------------------------------------------------------------------

    \707\ See Regulation SBSR Adopting Release, 80 FR at 14676.
    \708\ The Commission estimates the new first year burden as
follows: (1,394 hours (original burden resulting from previously
adopted rules) + 28 hours (burden resulting from amendments to Rule
901(a)(3))) = 1,422 hours.
    \709\ The Commission estimates the new aggregate burden as
follows: (1,422 hours x 300 reporting sides) = 426,600 hours.
    \710\ The Commission estimates the new annual burden as follows:
(687 hours (original burden resulting from previously adopted rules)
+ 12 hours (burden resulting from amendments to Rule 901(a)(3))) =
699 hours.
    \711\ The Commission estimates the new aggregate burden as
follows: (699 hours x 300 reporting sides) = 209,700 hours.
---------------------------------------------------------------------------

C. Correction of Errors in Security-Based Swap Information--Rule 905

1. Existing Rule 905
    Existing Rule 905 sets out a process for correcting errors in
reported and disseminated security-based swap information. Under Rule
905(a)(1), where a counterparty that was not on the reporting side for
a security-based swap transaction discovers an error in the information
reported with respect to such security-based swap, that counterparty
must promptly notify the reporting side of the error. Under existing
Rule 905(a)(2), where a reporting side for a security-based swap
transaction discovers an error in the information reported with respect
to a security-based swap, or receives notification from its
counterparty of an error, the reporting side must promptly submit to
the entity to which the security-based swap was originally reported an
amended report pertaining to the original transaction. An amended
report must be submitted to a registered SDR in a manner consistent
with the policies and procedures of the registered SDR required
pursuant to Rule 907(a)(3).
    Existing Rule 905(b) sets forth the duties of a registered SDR
relating to corrections. If the registered SDR either discovers an
error in a transaction on its system or receives notice of an error
from a reporting side, the registered SDR must verify the accuracy of
the terms of the security-based swap and, following such verification,
promptly correct the erroneous information contained in its system.
Rule 905(b)(2) further requires that, if such erroneous information
relates to a security-based swap that the registered SDR previously
disseminated and falls into any of the categories of information
enumerated in Rule 901(c), the registered SDR must publicly disseminate
a corrected transaction report of the security-based swap promptly
following verification of the trade by the counterparties, with an
indication that the report relates to a previously disseminated
transaction.
    In the Regulation SBSR Adopting Release, the Commission estimated
that Rule 905(a) will impose an initial, one-time burden associated
with designing and building a reporting side's reporting system to be
capable of submitting amended security-based swap transactions to a
registered SDR. The Commission further estimated that Rule 905(a) will
impose on all reporting sides an initial (first-year) aggregate burden
of 15,015 hours, which is 50.0 burden hours per reporting side,\712\
and an ongoing aggregate annualized burden of 7,035 hours, which is
23.5 burden hours per reporting side.\713\
---------------------------------------------------------------------------

    \712\ See Regulation SBSR Adopting Release, 80 FR at 14681-83.
    \713\ See id.
---------------------------------------------------------------------------

    With regard to non-reporting-side participants, the Commission
estimated in the Regulation SBSR Adopting Release that Rule 905(a) will
impose an initial and ongoing burden associated with promptly notifying
the reporting side after discovery of an error as required under Rule
905(a)(1).\714\ The Commission estimated that the annual burden will be
998,640 hours, which corresponds to 208.05 burden hours per non-
reporting-side participant.\715\
---------------------------------------------------------------------------

    \714\ See id.
    \715\ This figure was based on the Commission's estimate of (1)
4,800 non-reporting-side participants; and (2) one transaction per
day per non-reporting-side participant. The Commission noted that
the burdens of Rule 905 on reporting sides and non-reporting-side
participants will be reduced to the extent that complete and
accurate information is reported to registered SDRs in the first
instance pursuant to Rule 901. See id.
---------------------------------------------------------------------------

    Existing Rule 905(b) requires a registered SDR to develop protocols
regarding the reporting and correction of erroneous information. In the
Regulation SBSR Adopting Release, the Commission noted that the rules
adopted in the SDR Adopting Release generally require a registered SDR
to have the ability to collect and maintain security-based swap
transaction reports and update relevant records and, in light of these
broader duties, that the burdens imposed by Rule 905(b) on a registered
SDR will represent only a minor extension of these main duties.\716\
The Commission also stated that a registered SDR must have the capacity
to disseminate additional, corrected security-based swap transaction
reports pursuant to Rule 902. The Commission concluded that the burdens
on registered SDRs associated with Rule 905--including systems
development, support, and maintenance--are addressed in the
Commission's analysis of those other rules and, thus, that Rule 905(b)
imposes only an incremental additional burden on registered SDRs.\717\
---------------------------------------------------------------------------

    \716\ See id.
    \717\ The Commission estimated that developing and publicly
providing the necessary procedures will impose on each registered
SDR an initial one-time burden of approximately 730 burden hours,
and that to review and update such procedures on an ongoing basis
will impose an annual burden on each registered SDR of approximately
1,460 burden hours. See id.
---------------------------------------------------------------------------

    The Commission estimated in the Regulation SBSR Adopting Release