OFR Adopts Data Collection Rule on Centrally Cleared Repo Transactions
OFR adopted a final rule to establish a data collection covering centrally cleared funding transactions in the U.S. repurchase agreement (repo) market. OFR has worked closely with FED, SEC, and others in drafting the rule. The rule will become effective from April 22, 2019. OFR also published the instructions for preparation of the report of centrally cleared transactions in the U.S. repo market. The collection is expected to begin in mid-October.
The OFR SFT-1 report is filed on a daily basis and collects data on repo transactions cleared through a covered clearing agency acting as a central counterparty (CCP) for repo transactions. The report consists of three parts: Schedule 1 collects data on outstanding general collateral trades; Schedule 2 collects data on the securities used to settle netted general collateral obligations; and Schedule 3 collects data on outstanding specific-security trades. FED will act as the collection agent of OFR, with required data to be submitted directly to the Federal Reserve Bank of New York (FRBNY). All respondents must submit their completed report using the eFeds system of FED or any successor technology identified by the FRBNY. FRBNY will also provide technical assistance to respondents on using this or any successor system.
The daily collection will enhance the ability of the Financial Stability Oversight Council to identify and monitor potential risks to U.S. financial stability by closing the data gap related to centrally cleared repo transactions. The collection will also support the calculation of certain reference rates, particularly alternatives to the U.S. dollar London Interbank Offered Rate (LIBOR). LIBOR has been used as a benchmark to set interest rates on trillions of dollars of home mortgages, private student loans, corporate loans, derivatives, and other financial products. LIBOR participation declined after LIBOR-related misconduct, creating the need by industry and regulators for an alternative. As a result of this need, FED formed the industry-led Alternative Reference Rates Committee, which selected the Secured Overnight Financing Rate (SOFR) as the preferred LIBOR alternative. Cleared repo data from the collection will be used to enhance the production of the SOFR. The data collection will help inform U.S. financial regulators and market participants about potential risks in the financial system, while helping to fill an important need for a LIBOR alternative with minimal regulatory burden.
Following a Notice of Proposed Rulemaking on July 10, 2018, OFR received a handful of substantive comments—all supporting the proposed collection and citing its benefits. The rule requires the submission of information by central counterparties with average daily total open repo commitments of at least USD 50 billion. The Fixed Income Clearing Corporation would be the only market participant required to report if the collection began today, but other firms could meet the eligibility criteria for reporting in the future.
Related Links
Effective Date: April 22, 2019
Keywords: Americas, US, Banking, Securities, Repo, Central Clearing, CCP, SFT-1, Reporting, SOFR, LIBOR, Data Collection, FED, SEC, OFR
Previous Article
PRA Publishes PS4/19 on Loss-Absorbency Mechanism Under Solvency IIRelated Articles
|
News
US Agencies Consult on Capital Treatment of Land Development LoansUS Agencies (FDIC, FED, and OCC) issued a proposed rule on the treatment of loans that finance the development of land for purposes of the one- to four-family residential properties exclusion in the definition of high volatility commercial real estate (HVCRE) exposure in the regulatory capital rule.
July 12, 2019
WebPage
Regulatory News
|
|
News
EBA Single Rulebook Q&A: Second Update for July 2019Under the Single Rulebook question and answer (Q&A) updates for this week, EBA published answers to five questions related to supervisory reporting.
July 12, 2019
WebPage
Regulatory News
|
|
News
ESMA Updates Manual for European Single Electronic Format in EUESMA updated the reporting manual for European Single Electronic Format (ESEF).
July 12, 2019
WebPage
Regulatory News
|
|
News
FED Updates Supplemental Instructions for Reporting Form FR Y-9CFED updated the supplemental instructions for FR Y-9C reporting.
July 12, 2019
WebPage
Regulatory News
|
|
News
EBA Publishes Report on Monitoring Implementation of LCR in EUEBA published its first report on the monitoring of the implementation of liquidity coverage ratio (LCR) in EU.
July 12, 2019
WebPage
Regulatory News
|
|
News
APRA Applies Additional Capital Requirements to Three Australian BanksAPRA is applying additional capital requirements to three major banks in Australia to reflect higher operational risk identified in their risk governance self-assessments.
July 11, 2019
WebPage
Regulatory News
|
|
News
IMF Report on 2019 Article IV Consultation on Euro Area PoliciesIMF published its staff report in context of the 2019 Article IV consultation on euro area policies with member countries.
July 11, 2019
WebPage
Regulatory News
|
|
News
FSB to Survey Practices on Cyber Incident Response and RecoveryFSB launched a survey on the industry practices on cyber incident response and recovery.
July 11, 2019
WebPage
Regulatory News
|
|
News
ECB Appoints New Members of Supervisory BoardThe Governing Council of ECB appointed Edouard Fernandez-Bollo, Kerstin af Jochnick, and Elizabeth McCaul as representatives to the Supervisory Board of ECB Banking Supervision, for a five-year non-renewable term.
July 11, 2019
WebPage
Regulatory News
|
|
News
OSFI Consults on Applying Proportionality to Pillar 1 Rules in CanadaOSFI published a discussion paper seeks input on possible tailoring of the capital and liquidity requirements for small and medium-size deposit-taking institutions.
July 11, 2019
WebPage
Regulatory News
|
