CFTC Reminds SDs and MSPs of Reporting Obligations

The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") reminded swap dealers ("SDs") and major swap participants ("MSPs") to comply with data reporting obligations under CFTC Rules 23.204 ("Reports to Swap Data Repositories") and 23.205 ("Real-Time Public Reporting"). The staff noted that the advisory comes as staff has observed that SDs and MSPs "are having reporting issues and failures" resulting in inaccurate and untimely swap data reporting.

The DSIO noted the following frequent reporting issues and failures by SDs and MSPs: (i) readily apparent errors; (ii) incomplete reporting; (iii) duplicative swap reporting; (iv) calculation errors; and (v) reporting delays.

The DSIO observed these reporting practices that SDs and MSPs "may want to consider":

• Data Gatekeepers: Firms may want to use automated systems that perform verification processes to identify errors prior to reporting.
• Automated Review of Reported Data: To improve accuracy of reported data and correct errors promptly, an SD or MSP should seek to identify errors (which may be assisted by automated processes) and make timely corrections during the 48 hour SDR data accuracy confirmation period provided for in CFTC Rule 49.11 ("Confirmation of Data Accuracy").
• Erroneous Record Checks: If an SDR flags potentially erroneous records during validation checks, SDs and MSPs should review, correct and resubmit information promptly. SDs and MSPs should also consider having a process in place to investigate errors to prevent future recurrences.
• Improved Change Management Practices: SDs and MSPs should review their procedures for managing system changes and updates to confirm they are adequately testing for reporting system impacts.
• Data Correction: Errors and omissions in reported data should be corrected promptly after discovery in accordance with CFTC Rules 43.3(e)(ii) ("Method and Timing for Real-Time Public Reporting - Errors or Omissions") and 45.14 ("Reporting of Errors and Omissions in Previously Reported Data").
• Third-Party Service Providers: If an SD or MSP uses a third-party service provider to transmit data to a SDR, the SD or MSP remains responsible for complying with the reporting requirements.