Associations Support Revised Financial Reporting for Bank Swap Dealers

In comments responding to the CFTC's proposed amendments on capital and financial reporting requirements for swap dealers and major swap participants, the Institute of International Bankers ("IIB"), the International Swaps and Derivatives Association ("ISDA") and the Securities Industry and Financial Markets Association ("SIFMA") supported the codification of certain CFTC staff interpretive letters. (See also "CFTC Proposes Revisions to Capital and Financial Reporting Rules for Swap Dealers".)

In comments supporting CFTC Letter 21-18 ("Time-Limited No-Action Position for Bank Swap Dealers from certain Financial Reporting Requirements") and its successor CFTC Letter 23-11 (regarding alternative financial codifying parts of staff interpretive letters, and amending certain other by SDs subject to the capital requirements of a prudential regulator) the Associations agreed with the following amendments:

• Non-U.S. Bank Swap Dealer Requirements. The Associations agreed that the proposed 90-day time period to file financial reports should permit Non-U.S. Bank SDs sufficient time to prepare and submit the reports that are submitted to their respective home country regulator, translated into English with balances converted to U.S. dollars, along with Schedule 1 to Appendix C.
• U.S. Bank Swap Dealer Requirements. The Associations agreed with the Final Rules' approach, which included (i) technical corrections to address misalignments within the financial reporting requirements and (ii) allowing U.S. bank SDs to file certain schedules from the Call Report directly with the Commission instead of replicating this information on a separate balance sheet and statement of regulatory capital as previously maintained in Appendix C. The Associations also supported the proposed "evergreen approach" that provides for U.S. Bank SDs to submit the relevant portions of the Call Report, as updated by U.S. prudential regulators from time to time.

The Associations also made one technical recommendation:

• Bank Swap Dealers/Security-Based Swap Dealers Requirements. The Associations noted an inconsistency in the proposed 30-day deadline for filing Form X–17A–5 FOCUS Report Part IIC with the CFTC, as compared to the 35-day deadline aligned with prudential regulators and the SEC for U.S. Bank SDs and all bank SBSDs filing the FOCUS Report Part IIC. The Associations recommended amending the rule text to reflect a consistent 35-day submission deadline across all relevant regulatory bodies.