Statement of Commissioner Bowen Regarding Part 45 Cleared Swap Reporting NPRM
August 19, 2015
I strongly support this proposed rulemaking because reporting is one of the key pillars of the financial reform mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Dodd-Frank Act was intended to stabilize our financial system after the 2008 crisis by reducing systemic risk, increasing transparency, and promoting market integrity within the financial system. Having accurate, comprehensive data is essential to meeting all of these goals. Without useful data about our markets, the Commission is unable to fully assess systemic risk and monitor market integrity. Accurate data does not only support financial reform, accurate data is itself a critical part of financial reform.
This proposed rulemaking represents a major step toward making our data more accurate. With this rulemaking, we intend to provide clarity to swap counterparties, exchanges, clearing organizations, and swap data repositories about the part 45 reporting obligations with respect to cleared swaps. This rulemaking is also intended to improve the efficiency of data collection and maintenance associated with the reporting of cleared swaps.
I have a keen interest in systemic risk and market structure issues. I believe regulators have an obligation to do everything in our power to gird our financial system to prevent a future financial crisis. Nearly seven years after the 2008 financial crisis, our economy has improved but the effects of the crisis linger. Many are still battling long-term unemployment, underemployment, and hobbled careers.
The Commission cannot get a perfect picture of what is happening in our markets without accurate data. So while data collection may not seem like the most exciting topic, in fact it is crucial. If the devil is in the details in life, in financial regulation, the devil is in the data.
But while I welcome this step, I realize that much more needs to be done. Our current part 45 rules outline the broad categories of data that the Commission needs, but market participants need much greater clarity on, among other things, what data needs to submitted, how it needs to be submitted, and how data discrepancies need to be remediated. And our swap data repositories similarly need clarity on how to collect the data that the Commission needs to meet its mandate. While I am heartened by the international efforts to meet these aims, time is not on our side. The markets are active and real-time, and we need to get the best picture of what is happening in those markets as soon as possible.
Our amazing staff has been able to use the data that we are currently receiving to engage in excellent market surveillance. Yet, our staff they would be able to do even more if this data was improved; that is why I wholeheartedly support this proposal. I also hope that the Commission makes further efforts to improve our data and reporting regimes in the near future.
Last Updated: August 19, 2015