SIFMA AMG Urges CFTC and SEC to Harmonize Swap Data Reporting Regimes

The Asset Management Group of SIFMA ("SIFMA AMG") said the CFTC and SEC should prioritize data quality and harmonization over increased reporting volume in the agencies' effort to weigh changes to the design and scope of swap and security-based swap data reporting requirements.

In a comment letter on the joint request, SIFMA AMG argued that (i) accurate, consistent, usable data is more valuable than greater data quantity, so the agencies should focus on reducing complexities that cause inaccurate reporting and reconciliation problems; (ii) the SEC should align its rules with the CFTC's existing framework and global standards where possible, since avoiding unnecessary divergence would let firms build more efficient cross-regime processes and reduce errors; and (iii) regulators should avoid unnecessary redesigns of mature reporting systems, given the resources already invested, and calibrate any changes narrowly so implementation burdens don't outweigh regulatory benefit.

SIFMA AMG also urged that the transparency framework be calibrated to maximize benefits to the market as a whole while limiting adverse effects on the pricing and hedging of individual transactions, particularly larger trades. It said block thresholds should give market participants a meaningful window to hedge risk before trade details are publicly disseminated, warning that immediate full disclosure could impair liquidity and compromise client position confidentiality.

SIFMA AMG noted that its recommendations build on positions from prior letters, including its 2017 comments on Regulation SBSR ("Regulatory Reporting and Public Dissemination of Security-Based Swap Information") and its 2017 letter on the CFTC Division of Market Oversight's swaps reporting review.