Mr. Christopher Kirkpatrick

February 22, 2024

Secretary of the Commission
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street NW
Washington, DC 20581
Japanese Bankers Association
Comments on the Proposed Rules: Real-Time Public Reporting Requirements and Swap Data
Recordkeeping and Reporting Requirements (RIN 3038-AF26)
Dear Mr. Kirkpatrick:We, the Japanese Bankers Association (JBA), would like to express our gratitude for this opportunity
to comment on the Proposed Rules: “Real-Time Public Reporting Requirements and Swap Data
Recordkeeping and Reporting Requirements” (“Proposed Rules”) issued by the Commodity Futures
Trading Commission (CFTC) in December 2023. We respectfully expect that the following comments
will contribute to your further discussion.
[General Comments]
We understand that the Proposed Rules are intended to ensure that the CFTC continues to receive
accurate, complete, and high-quality data on swap transactions and would like to express our respect
to the CFTC’s efforts to that end.
However, as pointed out by some Commissioners, the proposal to add CFTC-specific data elements
not required to be reported in other jurisdictions is not consistent with the promotion of “globalharmonization” advocated by the Financial Stability Board (FSB) as well as the Committee onPayments and Market Infrastructures (CPMI) and the International Organization of Securities
Commissions (IOSCO), and may also impose excessive compliance burdens on market participants.
Therefore, the CFTC is requested to make a careful determination on this issue.
(Supplementary explanation)
To our understanding, for the reporting of OTC derivatives transactions, respective jurisdictions havecurrently introduced the Critical Data Elements (CDE) including identifiers, such as UniqueTransaction Identifier (UTI)/Unique Product Identifier (UPI), in light of “global harmonization.”
The Proposed Rules, however, significantly add CFTC-specific data elements that are not required tobe reported in other jurisdictions.
Given that there are many market participants who report OTC derivatives transaction data in multiple
jurisdictions, in the case of that a certain jurisdiction significantly adds jurisdiction-specific dataelements, these market participants will be required to develop different systems and workflows
according to each jurisdiction’s requirements, which will increase compliance costs.
Further, if this proposal triggers the movement of adopting additional jurisdiction-specific dataelements in other jurisdictions, the types and number of transaction data elements that market
1participants should report will increase. As a result, this will not only cause an increase of compliancecosts as mentioned above but also complicate the transaction reporting systems and thereby may
impact the accuracy of reported data.
If the CFTC nevertheless determines to adopt the additional CFTC-specific data elements, it isdesirable that the CFTC limit them to truly necessary elements and also explain to market participants
how adding such CFTC-specific data elements will contribute to systemic risk mitigation, market
monitoring, and market abuse prevention.
Of the proposed additional CFTC-specific data elements, we have commented, in “[Comments onSpecific Data Elements]” below, on those data elements that would particularly require a careful
determination and reasons thereof.

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[Comments on Specific Data Elements]
・#14 “Mandatory clearing indicator” in CFTC Technical Specification
Definition for Data Element:
An indicator of whether the swap transaction is subject to mandatory clearing under theCommission’s regulations.
(Comment)“Mandatory clearing indicator,” which is one of the data elements proposed to be added to “Clearing”
category, will require significant compliance burdens for financial institutions and it is difficult toreport their accurate values. This is because the complex logic to assess various contractual terms andconditions of transactions, such as Optionality, Amortization and types of Floating Index, will need tobe established in the transaction reporting systems.
As for this data element, we believe that, from the perspective of enhancing data accuracy, theapproach to develop a system that enables market infrastructures (e.g. central counterparty (CCP),
swap data repositories (SDR)) to centrally report data with Mandatory/Voluntary flag is more effective
than the approach to require respective financial institutions to report this element.
・#42 “USD equivalent regulatory notional amount” in CFTC Technical Specification
Definition for Data Element:
For the entire swap transaction (not leg by leg), provide the USD equivalent notional amount that
represents the entire overall transaction for tracking notional volume.
Generally, calculate USD equivalent notional using methodologies described in the revised CDE
Technical Guidance – version 3: Harmonization of critical OTC derivatives data elements (otherthan UTI and UPI), 2.70 Notional amount.
With respect to swaps denominated in non-notional terms (e.g., many non-financial commodity
swaps), methodologies described in existing guidance should be used if they differ from the revised
CDE Technical Guidance – version 3: Harmonization of critical OTC derivatives data elements(other than UTI and UPI), 2.70 Notional amount. If guidance does not exist, calculate USD
equivalent notional for the entire overall transaction using market standard, economicallyreasonable, and analytically supported methods.
In all cases, this data element should be delta adjusted for trades with embedded optionality orembedded leverage.
(Comment)
In the case of that respective financial institutions calculate and report their USD equivalent notionalamount, comparable data will not be collected. As a result, it is assumed that the accuracy of thecollected data may not be ensured.
Therefore, we believe that market infrastructures (e.g. CCP, SDR) centrally calculate USD equivalent
notional amount, or regulators convert the notional amount of reported transaction data to USD, will
improve the data effectiveness more than the proposed approach.

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