Implementing Dodd-Frank

The Dodd-Frank Act, specifically under Title VII, introduces new regulations to the OTC derivatives markets. In addition to creating new designations for market participants the rules mandate the supervisory function be split between the SEC (security based swaps) and CFTC (swaps). The rules call for mandatory clearing on a regulated exchange for standardized derivatives to be executed on Swap Execution Facilities (SEF). The rules also call for higher capital requirements for swaps that are not cleared, mandatory reporting of OTC derivatives to Swap Data Repositories (SDR) and reporting of certain data to the public.

Much of the earlier focus for ISDA has been on part 43 (Real-Time Public Reporting of Swap Transaction Data) and part 45 (Swap Data Recordkeeping and Reporting Requirements). The goal of part 43 is to provide real-time transaction and pricing data to the public that will increase efficiencies and transparency while driving down liquidity risk. Part 45 details the recordkeeping and reporting requirements that the commission believes will ‘reduce systemic risk, increase transparency and promote market integrity within the financial system.’ There have been many changes to FpML to support specific requirements for Dodd-Frank. For part 43 and 45 reporting, FpML has created two new views, called “Transparency” (for public real-time reporting) and “Recordkeeping” (for non-public regulatory reporting to SDRs, including support for Primary Economic Terms (PET) reporting). The FpML Regulatory Reporting (RPTWG) is focused on support of the CFTC Dodd-Frank Act requirements and defines the processes for reporting into SDRs using FpML while the FpML Commodity Reporting (COMMRPTWG) working group worked on developing extensions covering the CFTC’s 17 CFR Part 20 regulations, which require reporting of positions in a number of covered commodities resulting from OTC swaps and options trading activity.

ISDA supports regulatory efforts to increase the safety and soundness of financial and OTC derivatives markets. The Association has actively participated in the Dodd-Frank rule-making process by providing statistics, studies and comment letters to members of Congress, the SEC and the CFTC. Read More..

Part 43/45:

• 17 CFR Part 43 Real-Time Public Reporting of Swap Transaction Data
• 17 CFR Part 45 Swap Data Recordkeeping and Reporting Requirements

Part 46:

• 17 CFR Part 46 Swap Data Recordkeeping and Reporting Requirements: Pre-Enactment and Transition Swaps

Part 39:

• 17 CFR Part 39 Derivatives Clearing Organization General Provisions and Core Principles

Part 20

FpML provides support for Part 20 Large Trader Reporting since version 5.2. The FpML Commodity Reporting Working Group was formed September 2011 and was tasked by the CFTC to extend the FpML standard to define reports covering the Commission’s 17 CFR Part 20 regulations, which require reporting of positions in a number of covered commodities resulting from OTC swaps and options trading activity. The working group includes broad industry participation from over 40 firms and has been the main forum for technical and business-related LTR discussions. The working group has been instrumental in the development of resources, such as the CFTC Guidebook, that help clarify wording of the rules and provide implementation guidance to market participants

• CFTC Large Swaps Trader Reporting website
• Sample exposure reports are available for download. See the latest FpML version 5.4, Reporting View, \exposure folder.