CFTC Updates Large Trader Position Reporting Requirements

The CFTC amended the reporting requirements applicable to large trader position reporting requirements for futures and options. (See related coverage.)

The final rule replaces the old record format and replaces it with "modern data submission standards." Under the rule, the Director of the Office of Data and Technology will establish a standard for reports required to be submitted under CFTC Rule 17.00(a) ("Information to be furnished by futures commission merchants, clearing members and foreign brokers"), and replace the data fields previously enumerated in CFTC Rule 17.00(g) with an appendix specifying and adding certain applicable data elements. 

Additionally, the Part 17 Guidebook was revised to enable reporting firms to submit certain of the product-related data elements enumerated in Appendix C using a "Unique Instrument Code."

The amendments are effective 60 days following publication in the Federal Register. 

Statements

• CFTC Commissioner Kristin N. Johnson underscored the importance of the rule amendments. She stated, "access to more fulsome and reliable data will improve the Commission’s understanding of how traders employ futures and options, enable the Commission to surveil for market integrity in a single market or across markets, and facilitate the Commission’s detection of and enforcement many abusive trading practices." She noted that while the changes "can engender costs, the important data reported to the Commission plays a crucial role in stemming broader market disruptions."
• CFTC Commissioner Summer K. Mersinger said that it was "astonishing" that the rules that set forth "the submission standard and data fields to be used in large trader reports has been in place since 1986, and has remained largely unchanged during the past two decades." She said the large trader position "data streams are critical... for the CFTC’s performance of its market oversight responsibilities" but "have been a labor and time-intensive task for our staff for far longer than should have been the case, given the pace of technological developments." She also emphasized that "the door to further engagement must remain open throughout the compliance period for staff to provide requested guidance on how these new data elements are being interpreted."
• CFTC Commissioner Caroline D. Pham dissented, arguing that the final rule raised fair notice and due process concerns. She stated that the CFTC (i) is delegating authority to a "ghost office to make decisions that may cost firms millions of dollars to implement" and (ii) declined to adopt a reasonable notice standard in the regulation consistent with fair notice and due process under the Administrative Procedure Act.