The Commodity Futures Trading Commission (CFTC) has indicated that it will lead a public roundtable on 16 September to discuss its proposed new ownership and control report (OCR), including the practicalities of customer identification. The move is in response to the concerns raised by industry participants, including Futures Industry Association (FIA) president John Damgard who sent a letter to the CFTC during the comment period earlier this year highlighting the “significant burden” that the new customer data reporting regime could pose for the industry.
The proposed OCR calls for the collection of ownership, control and related information for all trading accounts active on US futures exchanges and other reporting entities. Specifically, OCR data would include entity information including trading account numbers, the names and addresses of accounts’ owners and controllers, owners’ and controllers’ dates of birth and other information necessary to uniquely identify owners and controllers to identify related trading accounts.
In his letter to the CFTC, Damgard asks the CFTC to hold off on implementing these proposals, as he believes them to be “premature”, given the lack of standardisation of data management practices and entity identification standards across the industry. Instead he suggests an industry-wide committee should be formed to discuss the operational issues involved in the reporting process and to provide feedback on the “appropriate design” of the OCR.
The roundtable, which will be held from 1pm (EST) at the CFTC’s headquarters in Washington, will therefore give market participants such as Damgard the opportunity to discuss these concerns in a public forum. Furthermore, the CFTC has extended the comment period for the Federal Register Notice to 7 October in order to give interested parties time to prepare comments on matters that are discussed at the OCR roundtable, thus delaying its implementation timetable accordingly.
The event will include discussion of the data sources involved in the gathering of OCR data and whether some data items for particular transaction types may be more challenging than others to collect. The CFTC also indicates that it will discuss whether the generation of a unique account identification number to potentially provide a more efficient way to identify owners and controllers than the data points currently specified in the OCR should be introduced.
In terms of data implementation challenges, the CFTC indicates a list of questions it hopes to answer: “How can reporting entities establish uniform protocols for receiving OCR data? What level of cooperation is necessary between reporting entities and root data sources in order to implement the OCR? What mechanisms will reporting entities employ to collect and receive OCR data? How will reporting entities ensure OCR data is accurately paired with account information from their trade registers? How will OCR data protocols be maintained or modified after implementation?”
The idea of a single repository for this data, as proposed by Damgard, is also likely to crop up during these discussions.
More information about the roundtable can be found on the CFTC website here.