Washington, D.C., September 11, 2018 – In a comment letter filed with the Office of Financial Research, SIFMA expresses its broad support for the OFR’s proposed data collection covering centrally cleared transactions in the U.S. repurchase, or repo market.  Further, SIFMA believes the collection of this data would contribute to the strength of the Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York as an alternative reference rate, while also enhancing the information available to supervisors and the official sector on the repo market.

“The repo market is important to the overall financial system. By helping to close some of the data gaps which currently exist in the collection of transactional repo data, the OFR’s proposal will contribute to the continued robustness and efficiency of the market,” said Robert Toomey, SIFMA managing director and associate general counsel.  “Importantly, SIFMA believes the proposal would also enhance the resiliency of the collection mechanism for SOFR, thus aiding in its broad acceptance as an alternative reference rate.”

In its letter, SIFMA notes the proposal’s focus on central counterparty clearinghouses (CCPs) is appropriate, as that will gather information from the largest and most systemically important participants in the repo market.  Including counterparty information in the collection will improve financial market stability through more robust supervision and additional official sector insight into the repo market by assisting supervisors to identify earlier and more accurately firms which may be under stress.

Highlighting the proposal’s connection to SOFR, SIFMA notes a regulatory collection requirement rather than the current voluntary standard will further enhance the data inputs to the SOFR, which will benefit its widespread use in contracts and financial products.  The proposal would also require the use of Legal Identity Identifiers (LEIs) to report counterparty information.  SIFMA supports the expanded use of LEIs as outlined by the proposal.

Finally, SIFMA notes the need for the data collected to receive confidentiality protections and has asked OFR to describe more fully a process to assure market participants that commercially sensitive information will not be compromised or otherwise made public.

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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate on legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.