On December 15, 2023, the Commodity Futures Trading Commission (CFTC) approved proposed amendments to 17 C.F.R. Parts 43 and 45 regarding real-time public reporting and swap recordkeeping and reporting. The amendments include two key modifications: (1) adding additional data elements and modifying certain existing data elements in the appendices of Part 43 and 45; and (2) expanding Unique Product Identifier (UPI) requirements to the other commodity asset class. In considering these amendments, reporting entities should note the following items:

1. The CFTC’s proposal includes the addition of 49 new data fields. This increases the number of reportable fields from 128 to 177 (a 37% increase in reportable fields).
2. Reporting entities[1] will now in some cases be required to submit a separate UPI for Part 43 and Part 45.

A more detailed analysis of each of the amendments is provided below.

Amendments to the Appendices of Part 43 and 45

The Commission proposes to add 49 data fields and modify certain existing fields within the appendices of Parts 43 and 45. Nineteen of the proposed fields are taken from the published Technical Guidance on the Harmonisation of Critical OTC Derivatives Data Elements (CDE Technical Guidance).[2] The remaining 30 fields are specific to the CFTC and are not included in the CDE Technical Guidance.[3] In her statement on the proposed rule, Commissioner Pham noted “the CFTC already has 47 data fields which are jurisdiction specific. If the current rule were adopted that would make almost 40% of the CFTC’s data fields jurisdiction-specific, moving the CFTC further away from the opportunity to meaningfully aggregate data across borders.”

Additionally, the Commission proposed revisions to existing data elements in Part 43 and Part 45 appendices to harmonize descriptions with those adopted at the international level and eliminate certain detail describing form and manner of the data element. This detail would still be present in the technical specification but not in the appendices to the rules.

Expansion of UPI Requirements to the Other Commodity Asset Class

On February 16, 2023, the CFTC designated UPIs for swaps in the credit, equity, foreign exchange, and interest rate asset classes with a compliance date of January 29, 2024. The newest proposal expands the UPI designation to cover the other commodity asset class. Along with the expansion of UPI requirements, came the consideration of geographic masking for certain commodity contracts. The proposed rules would require entities to provide a geographically masked UPI for Part 43 and a separate UPI for Part 45 that does not limit the geographic detail of the underlying assets. CFTC Commissioners generally supported this part of the proposal, which as Commissioner Mersinger stated, “would allow for the use of the recently designated unique product identifier in the ‘other commodity’ asset class by adopting a reporting process that would prevent the unintended disclosure of the identities, business transactions or market positions of swap counterparties”.

Put Patomak’s Expertise to Work

Patomak has deep experience in assisting reporting entities with swap data reporting. If you’d like to learn more about how Patomak can partner with you, contact Jill Sommers (jsommers@patomak.com), Mark Wetjen (mwetjen@patomak.com), Sudhir Jain (sjain@patomak.com), Anne Montminy (amontminy@patomak.com), or Timothy Brown (tbrown@patomak.com).

[1] Reporting entities include swap execution facilities, designated contract markets, and reporting counterparties as defined in Parts 43 and 45.

[2] The data elements from the CDE Technical Guidance include data elements related to Custom Baskets, Price Schedules, Products, and Notional Amounts and Quantity Schedules.

[3] The data elements not from the CDE Technical Guidance include data elements related to Clearing, Counterparty, Notional Amounts and Quantities, Price, Product, and Transaction Categories.