On July 10, 2017, the Division of Market Oversight of the Commodity Futures Trading Commission (“CFTC”) announced that it would undertake a multi-year review of the CFTC’s swap reporting regulations. The review was prompted by a report by the agency’s Inspector General, which called into the question the efficacy of the existing regulations, noting in particular the lack of standardization and usefulness of the data. The agency is aiming for full industry implementation of revised reporting regulations by the end of 2019.
The CFTC’s review will take place in two phases. The first phase will address the operations of swap data repositories (“SDRs”), including the validation and confirmation processes for reported data. The Inspector General’s report observed that the CFTC, SDRs and the regulated industries have not developed standardized data reports, which has hindered the CFTC’s ability to measure the costs and benefits of proposed regulations such as margin rules for uncleared swaps. The regulatory review will set up processes for validating reported data and rejecting missing or invalid data. It will also take a fresh look at data reconciliation procedures, including the frequency and degree of reconciliation.
The second phase of the review will focus on standardization and right-sizing of the data collected and harmonization with international standards. The CFTC will consider the minimum data necessary to perform its oversight functions and, where possible, reduce the data fields that currently must be reported. It will also consider whether to adopt next-day reporting deadlines.
The CFTC is seeking comments on its Roadmap to Achieve High Quality Swaps Data until August 21, 2017.
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