Kaizen’s Senior Regulatory Reporting Specialist Alan McIntyre has been speaking to a number of publications on the much-awaited confirmation of the delay to the CFTC ReWrite.
The six month delay to the go-live of new reporting rules from the US regulator offers firms more time to interpret the amendments and ensure they have the right controls in place, Alan told Global Investor Group.
“While the reporting firms have more breathing space with this six-month delay, the verification and notification requirements are the most draconian rules we have seen in any reporting regime to date. The firms must verify the accuracy of the data reported to swaps data repositories (SDRs), check for errors and fix those within seven days, as well as having to notify of failure to correct in the event they can’t,” said Alan.
He told IFLR Practice Insight that requirements were the harshest we’ve seen so far: “Other regimes ask for reconciliation and data quality controls, but the CFTC has upped the ante.”
The ReWrite has been a long time in making so while the breathing space is welcomed, “we can expect the CFTC will demand the highest quality data. Firms should be using this additional time to test and remediate now, so as to avoid having to do so after the go-live under the full scrutiny of the regulator,” Alan told The Trade.
In a separate article from Global Investor Group, the main derivatives trade body ISDA and other market experts have called for details of how and when firms will have to adopt new international data protocols under the CFTC ReWrite. Alan explained that trade bodies and derivatives market makers had pushed for a “big bang” approach, which has now been rejected for a multi-phase approach.
“The idea of implementing everything at the same time has now been replaced with a focus on implementing the initial technical specifications according to the rules, but any further guidance on the second phase can only help firms prepare,” he said.
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