US and Europe review derivatives reporting frameworks

Regulators hope to streamline and improve the quality of derivatives data being reported.

Derivatives regulators in the US and Europe have launched a review of rules relating to the reporting of swaps and other derivatives in a bid to tidy up the quality of data being reported.

The US Commodity Futures Trading Commission (CFTC) has recently launched a 40-day review of its swap data reporting rules, with a focus on receiving “accurate, complete and high-quality data on swaps transactions” and to streamline data reported.

The CFTC’s Division of Market Oversight has also laid out some rule changes relating to swap data repository (SDR) operations, as well as addressing reporting workflows and standardising data fields.

“The CFTC’s Division of Market Oversight has taken stock of our progress implementing the standards agreed to at the Pittsburgh G-20 summit and codified in Dodd-Frank, and has produced a roadmap laying out future steps we could take to ensure we have complete, accurate, and high-quality data to fulfill our statutory responsibilities,” said CFTC acting chairman Christopher Giancarlo.

Meanwhile the European Securities and Markets Authority (ESMA) has published its final standards on reporting derivatives data under the European Market Infrastructure Regulation (EMIR).

In the document, ESMA has stuck by its dual-sided reporting system but has included certain standards to avoid double counting of derivatives data by trade repositories such as those operated by CME Group and LSEG.

One of the main criticisms of the EMIR reporting rules is that it requires dual-sided reporting of OTC derivatives, which has often led to inflated data.

According to a letter to regulators from a group of industry trading bodies last year, it estimated the cost for end-users implementing the dual-sided system could exceed €100 million.

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