CFTC adjusts timetable for ownership and control reporting
On Sept. 28, the Commodity Futures Trading Commission provided futures and swaps traders with additional time to comply with new reporting requirements established by the CFTC’s Ownership and Control Reporting final rule. The CFTC also said it would consider modifying certain provisions in the OCR rule as requested by FIA in a petition filed earlier this year.
The OCR requirements are designed to provide the CFTC with additional information about customers active in the listed and cleared derivatives markets. Clearing firms and their customers have been working to develop the necessary systems and procedures to collect and transmit the required data, but as the Sept. 30 deadline approached, it became clear that approximately half of the reporting entities were not yet ready or able to provide the CFTC with the full range of data required.
For that reason, FIA filed a request with the CFTC in September seeking more time to ensure a smooth transition to the new reporting requirements and increase the reliability and consistency of the data provided to the CFTC. The CFTC in a Sept. 28 letter responded affirmatively to FIA’s request and set out new compliance deadlines stretching from April 2016 to February 2017, depending on the type of report. The CFTC noted that the extension of time is subject to several conditions and advised all reporting parties to check regularly for updates on the OCR testing page on the CFTC website.
Since the promulgation of the OCR rule, FIA has engaged in a broad outreach program to educate customers and counterparties about the OCR rule. FIA also has worked to educate the CFTC on the practical difficulties that firms are encountering as they attempt to comply with the new reporting requirements. For that reason, FIA filed a petition with the CFTC in June asking the agency to recognize the difficulties with the current OCR rule and amend the rule to clarify how it is meant to apply, improve the ability of reporting entities to comply and enhance the quality of the data submitted to the CFTC.
In the Sept. 28 letter, CFTC staff indicated a willingness to consider FIA’s suggestions in three areas:
- provide relief from reporting information covered by foreign privacy laws;
- reduce the amount of data required on trading ac- count controllers; and
- modify the level of trading volume that triggers OCR reporting.
FIA also is working to help the industry reduce the cost of compliance by providing an automated service through its subsidiary, FIA Technology Services, for filing OCR reports to the CFTC. The FIA Tech OCR Data Service is a web-based reporting system that allows participating firms, such as futures commission merchants, clearing organizations, foreign brokers and swap dealers, to capture and store client data needed for regulatory reporting purposes and file ownership and control reports to the CFTC and to U.S. exchanges that require this information. This industry solution provides a consistent way to report the data and provides a central location for clients to manage data reported by multiple FCMs.
The OCR Data Service is now in production and is in use by 32 FCMs and approximately 6,000 clients. Reports are filed automatically based on daily trading data supplied by reporting firms. The OCR Data Service files these reports directly to the CFTC incorporating owner and controller information maintained by users within the system.
