About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

CFTC Releases Draft Implementation Proposals, Data Reporting Timelines are a Key Consideration

Subscribe to our newsletter

Following on from the decision last week to give the industry an extra 30 days in which to provide feedback on the majority of its recent proposals, the Commodity Futures Trading Commission (CFTC) has released a short consultation paper concerning the phased implementation timelines for the swaps component of the Dodd Frank rules, which highlights the importance of data reporting to the whole process. A number of timelines will be predicated on the effective dates for data reporting, indicates the regulator, which is giving the industry time to comment on the specific implementation issues that may arise from the proposed phasing of the rules.

The “concepts” in the paper do not provide concrete deadlines and timelines on which to provide feedback, rather they suggest an order in which implementation should be phased and the potential correlation between various parts of the complex beast that is the Dodd Frank Act. The Act grants the CFTC and the Securities and Exchange Commission (SEC) certain flexibility to set effective dates and a schedule for compliance with rules implementing Title VII of the Act, which involves oversight of swaps and security-based swaps.

The regulators therefore have the ability to phase the implementation of these new requirements on the basis of factors such as: “the type of swap, including by asset class; the type of market participants that engage in such trades; the speed with which market infrastructures can meet the new requirements; and whether registered market infrastructures or participants might be required to have policies and procedures in place ahead of compliance with such policies and procedures by non-registrants.”

Accordingly, the CFTC is seeking feedback on all of these factors from market participants to determine the most appropriate phasing and has provided a list of concepts that the regulator is bearing in mind to this end. Many of these are pure common sense, such as the need for market infrastructures to be properly set up with the necessary policies, procedures and rulebooks in place before reporting to these bodies begin. It also notes that those entities that have not been previously regulated will need extra time in which to comply, as well as those that manage third party sub-accounts (such as asset managers).

One thing that comes across loud and clear from the list of concepts is the renewed importance that has been placed on the data reporting process and new infrastructure that is being established to facilitate this. For example, the CFTC states: “Some provisions of the proposed rules under Dodd Frank rely upon the CFTC having access to data. For example, the Commission’s proposed rules on block sizes for swaps and position limits depend on data reported to data repositories. Thus, effective dates for some rules may be dependent upon the effective dates for data reporting.”

The regulator also notes the importance of firms establishing adequate “technology connectivity” to these various infrastructures. “A rule’s effective date may take into account the time and resources needed to achieve the needed technology connectivity,” it states. However, this will differ by asset class due to the various stages of standardisation and connectivity across the market.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: An update on data standards and global identifiers

Data standards and global identifiers have been parts of capital markets’ practices for many years, and more are being developed, reviewed and shaped as the industry acknowledges their role in streamlining data management, reducing risk, improving transparency, and achieving compliance. This webinar will discuss data standards and identifiers in play, as well as those in...

BLOG

Data Benefit of CSDDD at Risk as FIs Seek Exclusion, Experts Warn

The anticipated exclusion of financial companies from the EU’s sustainability due diligence law has stung ESG professionals, with some arguing that an opportunity to improve data quality would be missed. The EU’s executive body, the European Commission (EC), is reportedly ready to cede to requests from parts of the financial sector to be left out...

EVENT

RegTech Summit London

Now in its 8th year, the RegTech Summit in London will bring together the RegTech ecosystem to explore how the European capital markets financial industry can leverage technology to drive innovation, cut costs and support regulatory change.

GUIDE

Regulatory Data Handbook 2023 – Eleventh Edition

Welcome to the eleventh edition of A-Team Group’s Regulatory Data Handbook, a popular publication that covers new regulations in capital markets, tracks regulatory change, and provides advice on the data, data management and implementation requirements of more than 30 regulations across UK, European, US and Asia-Pacific capital markets. This edition of the handbook includes new...