The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight has issued a letter requiring market participants to comply with the new large trader reporting system for physical commodity swaps and swaptions.

Clearing organizations and clearing members must begin reporting under the new large trader reporting system on Monday (Nov. 21), and the division requires that fully compliant month-end open interest reports (from September 2011 through February 2012) be submitted to the Commission by March 20, 2012.

The division said it will provide a temporary and conditional safe harbor for less-than-fully compliant reporting as it launches its XML-based large trader reporting system for swaps. The safe harbor will only be for market participants that make a good faith effort to comply with the new rules, according to the agency.

Because this is the first time that swaps data is being collected by the CFTC on a systematic basis, the temporary relief is intended to provide sufficient time for the industry and the CFTC to transition to fully compliant reporting.

A party requesting safe harbor must submit an e-mail informing the division when it expects to come into full compliance with the rules and the arrangement that it is making to come into full compliance.

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