Confirmation, Portfolio Reconciliation, and Portfolio Compression Requirements for Swap Dealers and Major Swap Participants 77 FR 55094 (Dec. 28, 20102)
Confirmation, Portfolio Reconciliation, and Portfolio Compression Requirements for Swap Dealers and Major Swap Participants 77 FR 55094 (Dec. 28, 20102)
OMB files this comment in accordance with 5 CFR 1320.11( c ). This OMB action is not an
approval to conduct or sponsor an information collection under the Paperwork Reduction Act
of 1995. This action has no effect on any current approvals. If OMB has assigned this ICR a
new OMB Control Number, the OMB Control Number will not appear in the active inventory.
For future submissions of this information collection, reference the OMB Control Number
provided. OMB files this comment in accordance with 5 CFR 1320.11( c ). This OMB action is
not an
approval to conduct or sponsor an information collection under the Paperwork Reduction Act
of 1995. This action has no effect on any current approvals. If OMB has assigned this ICR a
new OMB Control Number, the OMB Control Number will not appear in the active inventory.
For future submissions of this information collection, reference the OMB Control Number
provided. Pursuant to 5 CFR 1320.11(c), OMB files this comment on this information
collection request (ICR. The agency shall examine public comment in response to the NPRM
and will describe in the supporting statement of its next collection any public comments
received regarding the collection as well as why (or why it did not) incorporate the
commenterâs recommendation. The next submission to OMB must include the draft final rule.
table that charts list comparision
Inventory as of this Action
Requested
Previously Approved
02/29/2016
36 Months From Approved
04/30/2016
1,175,250
0
1,175,250
160,313
0
160,313
16,031,250
0
16,031,250
Section 4s(i) to the Commodity Exchange Act (CEA) requires the Commission to prescribe standards for swap dealers (SDs) and major swap participants (MSPs) related to the timely and accurate confirmation, processing, netting, documentation, and valuation of swaps. These regulations set forth requirements for swap confirmation, portfolio reconciliation, portfolio compression for SDs and MSPs. Under § 23.502, SDs and MSPs must reconcile their swap portfolios with one another and provide non-SD and non-MSP counterparties with regular opportunities for portfolio reconciliation. Section 23.500(i) defines the term, "portfolio reconciliation," as "any process by which the two parties to one or more swaps: (1) exchange the terms of all swaps in the swap portfolio between the counterparties; (2) exchange each counterparty's valuation of each swap in the swap portfolio between the counterparties as of the close of business on the immediately preceding business day; and (3) resolve any discrepancy in material terms and valuations." Section 23.500(g) defines "material terms" to mean "all terms of a swap required to be reported in accordance with part 45 of this chapter." Thus, portfolio reconciliation seeks to enable "the swap market to operate efficiently and to reduce systemic risk" by requiring counterparties periodically to (1) exchange the terms of their mutual swaps, and (2) locate and resolve discrepancies in material terms of mutual swaps. In particular, the Commission recognized that "portfolio reconciliation [would] facilitate the identification and resolution of discrepancies between the counterparties with regard to valuations of collateral held as margin." The Commission's proposal would to alleviate the burden of resolving discrepancies in terms of a swap that are not relevant to the ongoing rights and obligations of the parties and the valuation of the swap, or to the Commission's regulatory mission. The proposed amendment to Regulation 23.500(g) would reduce the number of "material terms" that counterparties would need to resolve for discrepancies in portfolio reconciliation exercises, but would not eliminate the portfolio reconciliation requirement itself.
The proposed amendment to Regulation 23.500(g) would reduce the number of "material terms" that counterparties would need to resolve for discrepancies in portfolio reconciliation exercises. The Commission believes that the changes proposed to the regulatory definition of "material terms" described herein would reduce the time burden for portfolio reconciliation by one burden hour for each SD and MSP, which would reduce the annual burden to 1,281.5 hours per SD and MSP. There are currently 106 provisionally registered SDs and MSPs and the Commission believes that the proposed rule would result in one hour of less work for computer programmers for SDs and MSPs because the programmers who have to match the needed data fields from two different databases would have fewer data fields to obtain and resolve for discrepancies.
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
(2015) Supporting Statement - 0068.docx
Confirmation, Portfolio Reconciliation, and Portfolio Compression Reauirement for Swap Dealers and Major Swap Participants