CFTC Rewrite Delay Announcement

Yesterday, the CFTC’s Division of Data issued the long-awaited confirmation on the CFTC rewrite delay to December 5, 2022, pushing it out by 6 months, from the initial compliance date of May 25, 2022. The announcement comes in the form of a No-Action relief in response to a letter submitted by ISDA and the SDRs.

By issuing this No-Action relief, the CFTC Division of Data is indicating that they will not recommend enforcement action against anyone who does not meet the May 25, 2022 compliance date. This is the next best thing to the actual regulation itself being amended, which would have required a lot of gymnastics to accomplish and ultimately would have led to the same outcome.

Setting aside the language used in the announcement, this is certainly welcomed news to the industry who have been expecting a reprieve from the May implementation timeline and an additional 6 months will help both the SDRs and market participants prepare for the implementation.

As indicated in the letter, the fact that the technical specifications have been so fluid and haven’t been finalized, represented a key and significant issue at the heart of meeting the compliance date set out in the final rules effective January 25, 2021.

An interesting point raised in the No-Action letter was that the CFTC expectation is for UPI and ISO to be implemented in Q4 2023, which means that even with the 6-month extension, firms will still need to track, plan and budget for another significant change in 2023 to comply with the UPI and ISO requirements.

Overall, this is positive news for the industry that will ensure more clients are better prepared, data quality is improved, and clients have the ability to test properly ahead of a majority regulatory change.

As with any delay/extension to the compliance date, it’s imperative that firms use this opportunity to review their current systems, processes, technical/product solutions and ensure they are fit for purpose to meet the next regulatory challenge in front of them. As we’ve highlighted over the past year or so, the CFTC rewrite introduces significant changes including the introduction of collateral reporting for SDs, verification/reconciliation requirements and submission timing changes of T+1 and T+2.

IHS Markit is partnering with clients to help them with the CFTC rewrite and is already servicing over 500 of the largest customers around the world with their trade and transaction reporting requirements. Clients using IHS Markit for the current CFTC requirements will seamlessly migrate to the Rewrite for the December 2022 implementation date.

To learn more, contact us here.

About the author: Igor Kaplun

Mr. Kaplun serves as Global Head of Regulatory Reporting Business Development, S&P Global Market Intelligence Cappitech and is responsible for leading the expansion of the regulatory reporting capabilities globally. Mr. Kaplun has deep expertise in OTC derivatives, G20 regulatory reporting and post trade services. Prior to joining S&P Global Market Intelligence, Mr. Kaplun spent 11 years at CME Group, most recently as Head of the North America Trade Repository business. Earlier in his career Mr. Kaplun worked in market data, trade operations and support, product marketing and sales. Mr. Kaplun holds a Bachelor’s in Business Administration and Master’s in International Business from the University of Florida