On April 25, 2019, the U.S. Commodity Futures Trading Commission (“CFTC”) announced its approval of a proposed rule and request for comment (“Proposed Rule”) that, if finalized, would amend swap data repository (“SDR”) regulations. The Proposed Rule also proposes to amend existing SDR reporting requirements for market participants. In sum, if adopted, the Proposed Rule will require market participants who are subject to reporting obligations under Part 45 of the CFTC Rules (“reporting counterparties”) to:
- verify the accuracy of swap data against swaps reports generated and provided by the SDR; and
- correct swap data errors and omissions “as soon as technologically practicable . . . but no later than three business days following” discovery of the error or omission.
Similarly, any non-reporting counterparty that discovers an error or omission would have to lodge a report with the reporting counterparty as soon as technologically practicable but within three business days after discovering the error or omission.
The comment period for the Proposed Rule ends on July 29, 2019. The remainder of this post provides additional information about the Proposed Rule and potential implications for market participants.