The Road to Dodd-Frank: Best Practices for Information Management – Part III


Partha S. Chatterjee, Principal, SunGard Global Services

When it comes to Dodd-Frank reporting, once the information is processed, the CFTC expects a multitude of reports and monitoring, including position limits for futures and swaps (17 CFR Part 151) – Forms 404 and 404S, large trader reporting for physical commodity swaps (17 CFR Parts  15 and 20), swap data recordkeeping and reporting requirements (17 CFR Part 45), and real-time public reporting of swap transaction data (17 CFR Part 43).

All these reports have their own requirements for timing, format, filtering of data related to specific products and indexes, and calculation. Organizations are spending a significant amount of time on analysis to determine what, when, and how they have to report to regulators.  This is an intense business analysis effort where firms are sitting down with their consultants to decide the right path forward.

As part of their integration efforts, firms are looking at SDRs (such as ICE, DTCC, and CME) and analyzing the interface requirements. If they have existing interfaces, organizations are researching how the extra fields can be new interfaces, how will the timeliness be guaranteed and what processes need to be retooled. Two of the options many organizations are pursuing are:

1)     upgrading their current ETRM product to handle Dodd-Frank compliance

2)     Interfacing with an SDR that will take care of Dodd-Frank compliance

So what is the right path forward?

Organizations must work with their consultants to best analyze their current state and determine the best approach. Time is of the essence. And while this series focuses on the information management and technology with respect to reporting and monitoring, there is significant impact on processes and other systems like risk, margin and collateral.

With impending Dodd-Frank deadlines, firms are taking definitive steps to prepare:

  1. Adding and/or updating external trade capture interfaces with exchanges, SEFs, brokers and clearing houses to automate on-platform and cleared trading activity
  2. Creating and/or updating electronic confirmation interfaces with major vendors
  3. Creating interfaces and workflows for SDR reporting to ensure CFTC compliance
  4. Implementing a strategic information management solution to handle CFTC reporting requests
  • Ensuring CFTC reportable information is stored in one place regardless of commodities – all data must be available
  • Guaranteeing that CFTC reports are created off a validated data repository

Information management itself can be an arduous task where the data needs to be consistent and consolidated in one central store in a timely manner. Dodd-Frank has significant impact on information, integration, systems and processes and there is no time to waste as deadlines loom on the horizon.  With the end goal of Dodd-Frank compliance, it is time to take definitive steps for best practice information management today.

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