FIA Petitions CFTC to Repeal Large Trader Reporting Rules for Physical Commodity Swaps

The FIA petitioned the CFTC to repeal its large trader reporting rules for physical commodity swaps ("Swaps LTR Rules") under Part 20 ("Large Trader Reporting for Physical Commodity Swaps") of the CFTC's regulations.

In its petition letter, the FIA explained that the Swaps LTR Rules, adopted in 2011 as a temporary measure to monitor large positions in physical commodity swaps, included a sunset provision allowing the CFTC to render them ineffective once swap data repositories ("SDRs") could supply the necessary surveillance data. The FIA noted that the CFTC has since developed a comprehensive reporting framework through SDRs under Parts 43 ("Real-Time Public Reporting"), 45 ("Swap Data Recordkeeping and Reporting Requirements"), and 49 ("Swap Data Repositories") of the CFTC Rules, as well as position limits under Part 150 ("Limits on Positions"). The FIA noted that SDRs now provide more detailed, standardized, and timely data than the duplicative reports required under the Swaps LTR Rules. 

The FIA advanced several arguments for repeal of the Swaps LTR Rules: (i) the rules are redundant and obsolete, as SDRs already provide higher-quality, standardized, and timelier T+1 data compared to Part 20 T+2 reporting; (ii) compliance with the Swaps LTR Rules imposes significant duplicative costs, with firms potentially spending over $1 million to establish and maintain reporting systems and facing ongoing expenses for storage, staffing, and upgrades; (iii) the "Position Type Indicator" requirement is burdensome and was never subject to cost-benefit analysis, having originated in staff guidance rather than rulemaking; and (iv) repeal would align with Executive Order 14192, which directs agencies to eliminate outdated regulations.