DERIVSOURCE: White House Reviews SEC and CFTC Steps to Harmonize Swaps Reporting
The US government is reviewing an early-stage move from the Securities and Exchange Commission and the Commodity Futures Trading Commission to revisit reporting requirements for both swaps and security-based swaps.
The measure is marked as being in a “prerule” stage, according to a new post on the White House’s Office of Management and Budget. The two regulators are seeking to better coordinate and this would allow for public input before formally proposing a rule.
The different data reporting requirements have long been a point of consternation for market participants who argue the regulatory treatment for them in other countries is more harmonised.
Under post financial crisis legislation, the SEC currently allows some security-based swaps market participants comply with CFTC requirements but that regulatory relief is set to expire in 2029.
The International Swaps and Derivatives Association and the Securities Industry and Financial Markets Association wrote a letter last month asking the agencies to align their rules for both types of swaps data reporting.
Their joint letter said: “A consistent regulatory approach in the US is warranted because swaps and SBS behave functionally in the same manner, have similar risk profiles, are often used by market participants for the same economic purpose, are largely priced alike, and are typically offered by the same trader at the same dealer institutions.”
ICE Trade Vault LLC, which acts as a swap data repository and is a subsidiary of Intercontinental Exchange Inc., also asked the agencies to synchronise the agencies’ reporting rules.
A CFTC spokesperson said the measure, filed with the White House by the SEC, was a joint effort and pointed to SEC Chairman Paul Atkins’ remarks at a March industry conference where he said he had asked staff to draw up a plan to codify a “harmonised reporting regime.”
The agencies would need to vote to propose a rule and then take public feedback on it. They would then incorporate the input and then vote again for it to become final.
