U.S. Securities and Exchange Commission and Commodity Futures Trading Commission seek comment on harmonizing swap and security-based swap data reporting

The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission have issued a joint request for comment on whether to redesign, narrow or otherwise simplify swap and security-based swap data reporting rules. The review is aimed at bringing the two regimes into closer alignment, reducing duplicative or low-utility reporting, improving data quality and usability, and lowering operational complexity for firms active in both markets, while keeping each agency’s separate Dodd-Frank Act mandate intact. The request asks market participants where the current frameworks should be harmonized and whether reporting requirements, data elements and validation rules should be changed. Key issues include whether the SEC should further align its security-based swap rules with the CFTC framework before the SEC’s 2019 compliance statement expires on Nov. 5, 2029, how public dissemination rules affect transparency and liquidity, whether some reported fields should be combined, removed or moved into reference data, and whether additional data validation, lifecycle-event simplification, materiality thresholds for error corrections, or machine-readable reporting logic would improve outcomes. The agencies also seek views on platform reporting, blockchain-based transactions, use of standardized identifiers such as the unique product identifier and Legal Entity Identifier, and implementation sequencing for any future reforms. The release notes that the CFTC framework can require up to 128 data elements and that inconsistent or overly complex reporting may be undermining the accuracy, completeness and timeliness of reported data. Comments are due within 60 days after publication in the Federal Register.