What is CFTC Transaction Reporting?

CFTC reporting is part of the regulatory framework under the Dodd-Frank Act, specifically Title VII, which was introduced on the back of the Global Financial Crisis to empower United States regulators to conduct effective market surveillance to support financial market stability and reduce systemic risk through increased transparency across the derivatives markets.

Firms engaging in over-the-counter derivatives trading within the United States are required to submit transaction details to a registered Swap Data Repository (SDR), such as DTCC, ICE Trade Vault and Chicago Mercantile Exchange (CME).

These reporting obligations consist of two main components:

- Real-time reporting under Part 43, aimed at providing market transparency by disclosing pricing information promptly.
- Transaction reporting under Part 45, enabling regulators to monitor the market for systemic risks.

CFTC Rewrite

The original regime was a rules-based regime and had been in place since October 2012. Whilst it had been updated periodically, the regime needed a more comprehensive update to bring it in line with other global regimes that had already switched to a more prescriptive, less rules-based approach with a focus on data quality. This was the aim of the CFTC Rewrite and is arguably the biggest change, emphasising the need for capital markets firms to have high quality data available and be able to report it.

Phase I of the CFTC Rewrite went live on 5th December 2022. This reduced the number of reportable fields to 128 standardised fields and introduced a number of Critical Data Elements (CDE), which includes the Unique Transaction Identifier (UTI). The primary purpose here was to standardise the format for completing the fields, and to harmonise with global standards as much as possible. Furthermore, the deadline for reporting was shortened to T+1 and any reporting errors must now be flagged within 7 days.

Phase II went live later than expected on 29th January 2024. The most significant changes were the requirement for firms to generate or obtain a Unique Product Identifier (UPI) for all asset classes, except commodities, and the adoption of ISO2022 XML messaging standards.