US regulators taking strong stance on swaps data reporting

US derivatives regulators plan to overhaul swaps reporting in order to streamline and improve the quality of reports.

The top US derivatives regulator is taking significant steps to improve the swaps data reporting process in order to streamline the process and improve the quality of reports.

Market participants are globally required to fill in multiple fields following a swaps trade, however a lack of standardisation and consequences from not completing the report has left the process flawed.

Recognising the issues, the Commodity Futures Trading Commission (CFTC) has taken steps over the past two years to work with data repositories and has improved the completion rates of the reports from 18% in Q1 2013 to 80% in September 2015.

The CFTC will now work with the market to develop standards for reporting and chairman said the commission will come up with ‘proposals on 100 fields before the end of the year’.

Speaking at the Futures Industry Association Expo in Chicago, CFTC chairman Timothy Massad said: “Some required fields are not reported by participants. SDRs don’t believe they have the authority to reject data if it is incomplete.

“The proposals will specify the form, manner and the allowable values that each data element can have. We will publish proposals on about 100 fields before the end of the year, and invite public comment. And we encourage market participants to get together and come up with common suggestions and other ideas.”

Massad has also warned participants that the regulator ‘will not hesitate to take enforcement actions’ against those failing to report swaps trades or failing to report errors.

“For those industry participants who do not make timely, complete and accurate reporting, we will not hesitate to carry out enforcement actions,” he added.