CFTC Approves Proposed Amendments to Regulations Regarding Real-Time Public Reporting and Swap Data Recordkeeping and Reporting Requirements

On December 15, 2023, the Commodity Futures Trading Commission (CFTC) published a press statement to inform that it has approved proposed rule amendments under Statutory Instruments 17 CFR Part 43 and 17 CFR Part 45 aimed at enhancing real-time public reporting and swap data recordkeeping and reporting. The proposed measures – designed to align with international data standards to ensure accurate, complete, and high-quality data on swap transactions – have meanwhile (December 28, 2023) been published in the Federal Register for public consultation.
To recall, early 2023, the CFTC issued an order to designate a unique product identifier and product classification system to be used in swap recordkeeping and reporting“ (EventID 19678). Specifically, the unique product identifier (UPI) and corresponding classification into credit, equity, foreign exchange, and interest rate swaps will be furnished by the Derivatives Service Bureau Limited (DSB). These identifiers must subsequently be used by swap counterparties and major swap participants in their reporting of any swap related data to swap data repositories (SDRs) and for recordkeeping purposes. The purpose of the mandatory use of UPIs in swap transactions is to harmonize international swap (reporting) standards, particularly due to the fact that swap transactions often take place across borders
In its new consultation now, the CFTC seeks to make the necessary adjustments to Statutory Instruments 17 CFR Part 43 relating to Real Time Public Reporting and 17 CFR Part 45 relating to Swap Data Recordkeeping and Reporting Requirements, particularly appendices listed thereunder, to accommodate for the new mandatory use of the UPI. Specifically, the Commission seeks to implement the aforementioned reporting obligations of market participants and describe the various new data fields in the reports to be used in this context (see page 35 ff).
Concurrently, the CFTC is modifying either of the instruments to „allow the UPI to be extended to the other commodity asset class in the future. In its conclusion, the CFTC notes that the use of unique product identifiers is an important step forward towards increasing transparency in derivatives trading and facilitating data reconciliation and standardization.
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Comments on the proposed modifications to facilitate the reporting of UPIs in relation to swap transactions may be submitted to the Commission up to February 26, 2024.
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Alongside the consultation, the CFTC has also published the (proposed) changes to the technical reporting specifications in accordance with the proposed changes to the reporting and recordkeeping rules. Both a redline version and a clean version are attached to this Event.