CFTC’s Swap Data Rewrite Goes Live

The US Commodity Futures Trading Commission has become the first regulator to amend its swap data reporting framework to incorporate harmonized critical data elements developed by the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions, with the initial round of changes coming into effect on December 5.

In 2009, after the global financial crisis, the Group-of-20 economies wanted to increase transparency in derivatives markets by requiring the reporting of over-the-counter transactions to authorized trade repositories. Changes are now being made to reporting rules across regions to make them more globally consistent.

The first phase of CFTC’s rewrite was originally due to be implemented in May 2022 but delayed until December 5 to give market participants time to change to their system. The second phase of CFTC’s changes are due to follow in late 2023.

 Rostin Behnam, CFTC

Rostin Behnam, chair of the CFTC, said at ISDA’s AGM in May: “If the CFTC receives data in an automated and standardized way, it can be integrated with our existing analytics. This ensures that subject matter experts spend less time cleaning data and more time developing insights in support of surveillance, enforcement and monitoring programmes aimed at ensuring our markets maintain the highest level of integrity and transparency.”

Oliver Blower, chief executive of VoxSmart, which provides communications surveillance technology, said in an email that this long awaited re-write which attempts to frequently verify the completeness and accuracy of swaps data is great in principle but could prove hard to achieve in practice. For example, regulators could ask for reconstructed swap trades when markets are volatile, when many could be executed over the telephone.

“To meet the spirit of this CFTC re-write, expect financial institutions to lean on the support of automated technology to connect communication and trade data so that compliance teams can be empowered to check exceptional swaps trades almost instantly,” added Blower.

ISDA’s Digital Regulatory Reporting

The International Swaps and Derivatives Association, a trade organization for participants in the over-the-counter derivatives market, has developed a Digital Regulatory Reporting initiative which was designed to meet the CFTC’s rewrite. The DRR allows firms to check they are interpreting and implementing the rules in line with their peers for the first time.

In November this year ISDA said BNP Paribas had successfully implemented and tested the DRR.

“This marks the first time ISDA’s DRR initiative has been deployed in a real-world, production-level environment, with a successful submission of data to the Depository Trust & Clearing Corporation’s swap data repository,” added ISDA in a statement.

ISDA said DRR avoids the inconsistencies that can emerge when each firm takes its own interpretation of a written set of rules by providing a collective, mutualized interpretation of the relevant CFTC rule amendments developed by an industry working group. The Common Domain Model (CDM) is then used to transform that interpretation into open-source, human-readable and machine-executable code that firms can either use as the basis for implementation or to check their own interpretation of the rules is consistent with the peer-reviewed industry version.

Harry McAllister, information architect at BNP Paribas, said in a statement: “Working with our technical partners and having completed the necessary internal adaptations, including converting our internal trade and counterparty data to CDM format, we’re now in a position to implement the DRR for the CFTC rewrite on December 5, and subsequent changes to reporting rules expected in Europe and Asia-Pacific.”

 Scott O’Malia, ISDA

Scott O’Malia, chief executive of ISDA, said in a blog that other institutions are planning to use the DRR to benchmark their own implementations of the CFTC revisions.

“Attention now turns to other jurisdictions, as regulators in Australia, Canada, the European Union, Hong Kong, Japan, Singapore and the UK prepare to revise their own reporting rules,” O’Malia added. “Fortunately, we’re already a significant way along in developing DRR solutions for these rule sets too.”

ISDA believes that a large proportion of the code generated for the CFTC rewrite can be applied directly to the DRR being developed for revised reporting requirements under the European Market Infrastructure Regulation, due in April 2024, and  can be transferred directly to the Asia-Pacific.

O’Malia continued in the latest ISDA quarterly magazine: “Other regulators are set to follow the CFTC’s lead, meaning this will remain a key priority in 2023 and 2024. ISDA is working to extend the DRR in response, increasing the efficiency of implementation and ensuring regulators are better able to monitor potential sources of risk.”


In September this year Duco, a cloud-based data automation company, launched its no-code platform to help firms meet the data quality requirements of the upcoming CFTC rewrite. For example, the rewrite includes reduction in reportable fields from around 200 to 128; the addition of elements such as the Unique Transaction Identifier (UTI) and Unique Product Identifier (UPI) and a move to T+1, the day after a trade, for swap reporting.

Duco said the software-as-a-service (SaaS), data agnostic no-code platform provides firms with a fast, flexible way to aggregate, normalise and reconcile data for regulatory reporting. The platform can ingest files from multiple systems and in multiple formats without the need for technical data manipulation and its proprietary natural rule language (NRL) gives control over data quality checks to business users.

Christian Nentwich, chief executive of Duco, said in a statement: “The CFTC rewrite moves from a principles-based approach to something much more prescriptive. This is going to place a significant burden upon capital markets firms, many of whom are using inflexible legacy technology that requires hardcoding to remap existing processes to the new requirements.”