September 30, 2011
Good afternoon and welcome to the second meeting of the Data Standardization Subcommittee of the CFTC’s Technology Advisory Committee. I thank you for your continued commitment to serving on the Subcommittee. I greatly appreciate the extra hours each of you has logged on these issues outside of our meetings here. Your knowledge and experience are invaluable to this effort to bridge the gaps between data, finance and the law, which effort has become increasingly important as the Commission rushes to define and implement the mandates under the Dodd Frank Act.
Today, each of the four Subcommittee working groups will present their interim findings on universal product and legal entity identifiers, standardization of machine-readable legal contracts, semantics, and data storage and retrieval.
This standard setting process is relevant to the rulemaking process as the Commission develops new mandates and requirements for the reporting and disclosure of massive amounts of new market data. Failure, by both regulators and market participants, to use a common metric increases the risk of misapplication and misunderstanding of critical market information. Such misapplication and misunderstanding would result in a waste of resources for both regulators and market participants.
I am aware that several of our proposed and even final rules present inconsistent approaches in the manner and form in which the Commission is seeking information about entities and transactions. There are multiple data collection rules that must be coordinated to ensure that the Commission collects what it needs on a timely basis to perform its oversight, and does so in a manner that is well-defined and cost-effective for the market. The several rules include the Large Trader rule, which was delayed due to compliance challenges, the proposed joint SEC/CFTC and separate CFTC rules requiring reporting by commodity pool operators and commodity trading advisors under Part 4, the soon to be finalized Swap Data Recordkeeping rule and a revised Account Ownership and Control rule.
First and foremost, the Commission must require that all filings be submitted electronically in a mode and manner that is specified by the Commission and consistent and cost-effective for the market. Second, the data requested on mandated forms, to the greatest extent possible, ought to conform to the form and standards currently utilized by entities to minimize compliance costs and confusion for market participants. Finally, federal agencies must do a better job to quantify the cost of the reporting burdens and the additional cost of requiring different data streams across various rules and across different agencies as well. You can be sure that I will work to ensure that each of our rulemaking teams carefully consider the demands they make and to ensure that their requests will be useful, cost-effective and coordinated.
Without a doubt, data is the foundation for a solid oversight and surveillance program. It is also the life-blood of markets.
I recognize that the four working groups here today have worked long hours to provide recommendations that will ensure our data foundation will be solid and long-lasting. I am grateful for your assistance and the time that you have allocated to developing these data standards.
We have a narrow window between now and the end of the rulemaking process to develop cost-effective and useful data standards to describe and communicate complex financial products. I intend to leverage the work of the subcommittee to ensure that our rules apply these data conforming recommendations.
In closing, I’d like to thank CFTC Chief Economist Andrei Kirilenko for chairing this subcommittee and Nancy Doyle and JonMarc Buffa for their leadership. The next public meeting of the Data Standardization Subcommittee will be held on November 4, 2011; however individual working groups within the Subcommittee are free to and will meet at their discretion. Recommendations to the Technology Advisory Committee will be posted on the CFTC’s website at www.cftc.gov.
Last Updated: September 30, 2011