The Securities and Exchange Commission and the Commodity Futures Trading Commission jointly opened a public comment period on Wednesday, asking market participants and the general public for feedback on how to simplify and harmonize swap data reporting requirements. The regulators say the push is meant to cut compliance costs and reduce complexity for firms that report derivative trades, while making the market more transparent and efficient.
Why the regulators are acting now
Swap data reporting has been a tangled web for years. After the 2010 Dodd-Frank Act mandated that most over-the-counter derivatives be reported to trade repositories, the SEC and CFTC each wrote their own rules. The result: overlapping, sometimes conflicting data fields, formats, and timelines. That forces firms to maintain separate systems for each regulator – a cost they eventually pass on to clients. The agencies say harmonizing the rules could save the industry millions and give them cleaner data to spot systemic risk.
The request for comment covers both the SEC's Regulation SBSR and the CFTC's Part 43 and Part 45 rules. Topics include data elements, reporting timeframes, error correction procedures, and how to handle new derivative types like digital-asset swaps.
What the agencies want to hear
The SEC and CFTC have posted a list of more than 60 specific questions. They want to know which data fields are redundant, whether real-time vs. end-of-day reporting makes sense for different products, and how to align definitions across the two rulebooks. They are also asking about the cost of compliance today – broken down by firm size – and which changes would deliver the biggest bang for the buck. The comment period runs for 60 days after publication in the Federal Register, which is expected within the next week.
No specific industry group or company has publicly endorsed the proposal yet. But trade associations representing banks, hedge funds, and asset managers have long complained about the current two-regulator setup. Any final rule would still have to be voted on by the SEC and CFTC commissioners, so the timeline for actual change remains unclear.
A rare joint effort
Joint rulemakings between the two agencies are uncommon. The SEC and CFTC have different legal mandates and cultures – the SEC focuses on investor protection, the CFTC on market integrity and preventing manipulation. Past attempts to align derivatives rules have stalled. This time, both chairs have made harmonization a priority, and the comment request is seen as a sign they are willing to compromise.
Still, the details matter. If the agencies settle on a minimum set of data fields that both can live with, that could mean less information for the public and for regulators themselves. Some transparency advocates worry that streamlining could dumb down the data. The comment period is meant to surface those trade-offs.
The deadline for submitting comments will be 60 days from the Federal Register publication date. After that, the agencies will review the feedback and draft a proposal – a process that could take months or even years.
