The CFTC is coming to the end of a long-overdue Dodd-Frank trade reporting revision. Commission staff has been working on this for years. In essence there are 128 standard fields under Parts 43, 45, and 49 (the main areas dealing with trade reporting). Here’s what you need to know: There is a significant increase in collateral and margin reporting on the trade Sensible. But this one is going to be painful for many. The integration between the credit system and the system of record (CTRM) is not terribly robust. Usually, it is a one-way feed from the CTRM to the credit system, perhaps once or twice a day. Here we need credit to go back into the CTRM when the swap is booked. The CFTC does, however, contemplate portfolio based reporting. There is a significant increase valuation reporting on the trade Again, sensible, but this requires a tighter integration to the CTRM system’s valuation engine. But there is more. The CFTC is interested in floating references and the delta between them. For example if something is marking off of the Jun floating index they also want to know what the July index is at and the delta between the two. … continue reading
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Source: CTRM Center