CFTC Makes Technical Amendments to Maintain Current Portfolio Reconciliation References

The CFTC adopted an interim final rule to amend the definition of "material terms" for purposes of portfolio reconciliation under swap data recordkeeping and reporting requirements (the "SDR Rule"). The changes reflect recent amendments to the SDR Rule (see previous coverage).

Rule 23.500(g) ("Swap Documentation") defines "materials terms" and references citing to Minimum Primary Economic Terms Data set forth in Appendix I of Part 45. Amendments to the Appendix are scheduled to become effective on January 25, 2021. The interim final rule makes "technical organizational changes to its regulations to ensure that market participants will continue engaging in portfolio reconciliation exercises in their current manner, without disruption." The CFTC stated that "without these amendments, market participants would lack meaningful regulatory reference concerning how to perform portfolio reconciliation exercises in light of changes made to appendix 1 of part 45 by the SDR Rule."

The interim final rule went into effect on January 5, 2021, and comments on the rule must be submitted by March 8, 2021.