CFTC ends routine physical commodity swaps reporting under Part 20

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CFTC ends swaps reporting

Highlights

CFTC issued a final order ending routine daily and event-based Part 20 position-reporting requirements for physical commodity swaps, effective upon Federal Register publication.
CFTC Chair Michael S. Selig stated the move eliminates unnecessary, costly, and duplicative reporting for clearing organizations, clearing members, and swap dealers.
The order retains obligations for recordkeeping and compliance with special-call provisions under Part 20, requiring continued transaction and methodology record retention.

Regulatory shift in swap reporting

As reported by Commodity Futures Trading Commission, the agency has issued a final order that sunsets the routine position-reporting requirements of Part 20, the large trader reporting rules for physical commodity swaps. Under the order, clearing organizations, clearing members and swap dealers no longer have to file the daily and event-based position reports currently required under Part 20.

CFTC Chair Michael S. Selig says American financial market participants should not be burdened with costly and duplicative reporting requirements that do not improve regulatory quality. He says the order removes a significant and unnecessary burden on the industry while allowing the Commission to retain access to the position information it needs to protect these markets.

The Commission says it is acting under Section 20.9, a sunset provision that was built into Part 20 when the rule was first adopted in 2011 as a temporary measure. It says the rule came before the agency's broader swap data reporting framework, which has since developed through swap data repository registration under Part 49, swap data reporting requirements in Parts 43 and 45, and position limits in Part 150.

Compliance impact for market participants

The order does not fully remove Part 20 obligations immediately. As a transitional measure, the Commission is retaining the rule's recordkeeping and special-call provisions.

Reporting entities must continue to keep records of paired swap and swaption transactions as well as futures-equivalent conversion methods, and they must provide that information when the Commission issues an appropriately scoped special call. The order takes effect upon publication in the Federal Register.

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