CFTC repository rule won't save regulators from data leak bills, say European supervisors (News Story)
August 23, 2011
The CFTC recently released final rules governing swaps-data repositories. The CFTC included efforts to protect foreign regulators from liability that could arise from data leaks, but European regulators are concerned that they will not be able avoid liability=y. The rules attempt to resolve a clause in the Dodd-Frank Act that would make them liable for any costs that arise after data has been requested from a US-registered repository, including lawsuits triggered by data leaks. Unfortunately, the CFTC's fix won't do the trick, European regulators say.
The root of the problem is a requirement in Dodd-Frank that foreign regulators indemnify US SDRs against any costs the repository incurs as a result of sharing information with them. The CFTC's solution is for repositories in the US to register with every foreign regulator that might want access to their data, giving them shared jurisdiction. But that would fall foul of Europe's regulatory structure, according to a senior source at one European supervisor.
Cross References: Dodd-Frank Act Section 728; CEA Sec. 21(d); CFTC Rule 49.18(b); 76 FR XXXX; Swap Data Repository -Final Rule (pre-Federal Register version)