CFTC Swap Data Reporting in Uncertain Times: 5 Reasons Why It Matters More

Given the backdrop in Washington, clients and industry contacts are asking me if the CFTC remains as focused on reporting and whether firms could consider scaling back their efforts. I understand the logic: a shifting regulatory environment in the US, recent No-Action Reliefs on error correction and notification, and signals of a regulatory pivot towards crypto and fraud.

Factor in an industry exhausted after years of gruelling rewrites and the case for easing off feels almost compelling. Almost.

My answer is a categorical nope – and here’s why.

1. Regulators increasingly use the data for far more than systemic risk monitoring

The Dodd-Frank Act reporting framework may have originated from the 2008/9 financial crisis with systemic risk the objective, but regulators across the G20 countries are using this data for an expanding range of purposes, including:

• Market surveillance
• Position monitoring
• Market abuse and insider trading detection
• Policy calibration.

ASIC’s recent review of the Australian CFD market is a case in point. They used the reported data for consumer protection purposes and the resulting enforcement action secured nearly A$40m in refunds to retail investors. A different use case entirely from the original mandate but made possible by the quality of the underlying data.

And consider the Archegos collapse. The SEC took significant criticism for what it didn’t see coming. The idea that either the CFTC or SEC would voluntarily walk away from data they’ve spent years working to obtain and improve just doesn’t hold up.

It’s also worth remembering that the original systemic risk mandate is looking as mission critical as it has been since The Big Short. If anything the environment we’re operating in has made it more relevant:

• War in the Middle East driving oil prices sky high and damaging the global economy
• Growing concerns about structural vulnerabilities in the private credit space
• Questions about whether the current AI boom might be a bubble
• Significant uncertainty about the risks, opacity and sustainability of cryptocurrency markets (and yes, the irony of arguing for data quality while regulators are being nudged to go easier on crypto is not lost on me)
• All of the above sitting alongside risks like stretched asset valuations, elevated sovereign debt levels, and a geopolitical risk environment that feels anything but settled.

2. No-Action Relief letters are not a free pass on data quality

It would be easy to assume the two recent CFTC No-Action Relief letters (easing the so-called ‘Part 49’ burdens around Error Correction and Error Notification) are a signal that the commission is easing off. It’s actually the opposite.

Let’s recap:

• NOAR Letter 25-25 (July 2025) means firms only having to submit a ‘failure to timely correct’ notification where the issue impacts over 5% of the open trades within that asset class.
• NOAR Letter 25-43 (December 2025) reduces the correction requirements in three main ways:
  • Reduced requirements to correct dead (matured/terminated) trades
  • Corrections focused on the most important fields (LEIs, UTIs, UPIs and Appendix A fields)
  • Only the latest version of any trade needs corrected.

Collectively, that’s a significant reduction in administrative burden. And credit to ISDA for the advocacy that got the CFTC to this more pragmatic place.

But the intent is telling. The Commission isn’t saying reporting quality matters less. It’s saying: we’ve cleared away the noise, so now crack on with what really matters. In other words, there are no excuses left. 

Regardless of where the CFTC sits on enforcement priorities, NFA examinations of swap dealers continue with data accuracy and reporting controls firmly in scope. The same goes for FINRA’s examinations on the SEC side. Reporting quality is not an optional extra.

And here’s the sting in the tail: those two No-Action Relief letters cut both ways.The NFA will likely expect firms to demonstrate exactly what they’re doing with the correction requirements that remain. Relief from the burdensome stuff is not a pass on the important stuff.

3. Cross-jurisdiction reporting means issues don’t stay isolated to CFTC

If your firm is big and important enough to be invited into the Swap Dealers Ballroom, there’s a strong chance you’ve qualified for other equally prestigious obligations. The Security-Based Swap Dealers convention is only two blocks down Fifth Avenue. Toronto and the glamour of the CSA Gala are just a short flight from JFK. And further afield, your international colleagues are getting dressed up for EMIR, ASIC, HKMA and more.

Even if the CFTC were to signal a reduced focus in data quality – which it won’t – the underlying data, systems and teams that support them tend to have multi-jurisdictional duties. Let your CFTC data grow stale or polluted and there will be a knock-on effect across every other regime you report into.

As I commented here, the CFTC and SEC recently announced a Memorandum of Understanding that has implications for swap and security-based swap data. The MOU commits the two agencies to sharing access to reported data, combining analytical and monitoring capabilities, and coordinating on examinations and enforcement.

Given that these two agencies have historically been more territorial than collaborative, that part about sharing analytical capabilities and analysis is game-changing. Likewise, collaboration on monitoring capabilities and examinations is an interesting and sensible development. And none of it points towards a reduced emphasis on data quality, quite the opposite. Factor in the rapid pace of AI tooling and the two commissions will soon be able to pore over your swap data like never before.

4. The current ‘quiet period’ is the best time to improve your reporting

The last three or four years of reporting rewrites have been a major slog. Factor in the SEC’s Security-Based Swap Reporting implementation in late 2021 and early 2022, the CFTC ReWrite in 2022, Phase 2 in 2024, and Canada’s CSA Rewrite in 2025 and even firms with purely North American obligations have been living on a near-permanent regulatory deadline treadmill. And regulatory deadlines, as everyone in this industry knows, are not renowned for their flexibility.

Whilst we wait for the next round of regulatory timelines, it’s entirely understandable to want to take a bit of a breather. But it’s also a missed opportunity.

With the rewrites bedded in and the next major deadline not imminent, this is precisely the window to tackle the things that always get deprioritised: cleaning up source data, enhancing systems, tightening controls, and investing in the teams that run them. Firms that use this period will be in a fundamentally stronger position than those that don’t.

Because before long, the CFTC will have fired the starting gun on the remaining phases of the rewrite, or the CSA will have announced timelines for the next iteration of their Derivatives Data Technical Manual. Or both. And we’ll all be back in deadline mode, and those “day two” initiatives will get quietly shelved again. The window is open now – it won’t stay that way.

5. High quality data is a business asset, not a compliance tax

Several years of regulatory stress, my once youthful team is now looking like The Battered Bastards of Baseball, and all for what? So that regulators can ensure we’re not the next Bear Stearns?

Well, not quite. Because it’s not just the regulators who can use this data. You can too. And you should.

The good news is that within all that regulatory effort your firm has achieved most of the following:

• Sourced and cleaned up massive amounts of data
• Associated LEIs to internal client and counterparty codes
• Collated and normalised data from multiple upstream systems
• Linked collateral data from a collateral management system with actual trade data
• Enriched and verified financial product codes and taxonomies with UPI data
• Implemented multiple data controls that surface anomalies and issues like never before.

It’s not just the regulators who now have better oversight of your derivatives business. You do too. This data and the infrastructure around it, is an asset. It isn’t siloed like many trading or upstream systems. It spans your entire derivatives business, with potential value extending across risk, finance, operations, legal and commercial functions simultaneously.

Looking at the reporting data and controls as solely a regulatory burden is not only shortsighted. It’s also a strategic error. There is value within that data if you choose to unlock it.

So is CFTC Swap Data Reporting still worth the effort?

The regulatory pressure hasn’t gone away – it’s evolved. The CFTC and SEC have better tools, broader mandates, and now a formal framework for sharing data and analysis with each other. Examination programmes continue. Cross-jurisdictional obligations don’t disappear because Washington feels uncertain. And the quiet period won’t last.

But beyond the compliance case, the firms that will come out ahead aren’t just the ones that report accurately. They’re the ones that recognise what they’ve built and put it to work.

The data is there. The infrastructure is there. The only question is whether you choose to treat it as a burden or an asset.