Seeks to know what detail should be reported on both cleared and bilateral swaps.
The Commodity Futures Trading Commission on March 19 published a request for public comment on a great many operational detail involved actually making swap data repositories work. Since both cleared and bilateral swaps fall under Dodd-Frank’s reporting requirements, even treasurers planning to use the end user hedge exemption might find it useful to follow the process or comment.
According to a research note from risk consultancy Derivatives Risk Solutions, “The consultation attempts to drill down to the level of detail needed in order to make swap transaction reporting operationally feasible, tackling such gnarly issues as who ‘owns’ swap data submitted to, or transferred by, an SDR.”
DRS says there are about 70 questions on which the CFTC wants input. The regulator formed a working group to explore these issues and, in its Federal Register filing, writes, “Among other objectives, the Working Group was asked to identify and make recommendations to resolve reporting challenges, and to consider data field standardization and consistency in reporting by market participants.”
Again, according to DRS, the points of interest include the following:
- The terms of a swap confirmation that constitute “confirmation data”;
- How to ensure the timely, complete and accurate reporting of “continuation data” (i.e. data resulting from swap life cycle events) and valuation data;
- Approaches to a change of status of a reporting counterparty;
- Clarification of the appropriate manner to report swap transactions of a type not explicitly addressed in the swap data reporting rules;
- Standardisation of data elements, particularly those relating to bespoke, exotic or complex swaps;
- Challenges associated with the reporting of:
- Allocations;
- Compressions;
- Prime brokerage swaps; and
- Commodity trade options;
- Approaches to addressing duplicative reporting;
- Reporting of inter-affiliate relationships;
- Identification of reporting entities which are not in compliance with swap data reporting rules as a result of reliance on no-action relief;
- Challenges associated with “Post-Price Swaps”;
- Reporting of combinations of swap transactions forming strategies and packages;
- Challenges in reporting Primary Economic Terms data and collateral information;
- The reporting of cleared swaps;
- The affirmative steps, if any, that SDRs should take to verify the accuracy of swap data;
- Challenges associated with obtaining and maintaining an LEI; and
- Further methods by which the CFTC could enhance Part 45 to facilitate oversight of Swap Dealers, Major Swap Participants, risk monitoring and surveillance.
The comment period is the standard 60 days.