Matthew Reed, Chief Counsel
Patrick Bittner, Senior Counsel
Office of the Chief Counsel
Office of Financial Research
717 14th street NW
Washington, DC 20220
Re: Proposed Ongoing Data Collection of Centrally Cleared Transactions in the U.S. Repurchase Agreement Market, RIN 1505-AC58
Dear Messrs. Reed and Bittner:
The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to submit comments on the Office of Financial Research’s (“OFR”) proposed rule regarding a data collection on centrally cleared transactions in the U.S. repurchase market (“Proposal”).2 SIFMA broadly supports the proposed data collection covering centrally cleared transactions in the U.S. repurchase market, and we believe this collection, consistent with the goals described in the Proposal, would both enhance the information on this important market that is available to supervisors and the official sector and contribute to the robustness of the Secured Overnight Funding Rate (“SOFR”) published by the Federal Reserve Bank of New York (“NY Fed”). In connection with the proposal, we offer several observations and comments on the proposal.
Justification for Proposed Collection
Financial Stability Monitoring
We believe that the proposed data collection is appropriate and that it will help close some of the data gaps that currently exist in the collection of transactional repo data. This collection will enhance the data available to regulators and supervisors on this important market, particularly with the addition of specific counterparty identifying information, and allow for earlier stress identification and potential risk mitigation. The data will more easily permit the Financial Stability Oversight Council (“Council”), and the constituent members of the Council, to identify risks to financial stability by allowing for earlier identification of firms under stress and allow for appropriate remediation as necessary.
The collection’s focus on CCPs is appropriate (with FICC currently being the only expected data submitter) as that will gather information from the largest and most systemically important participants in the repo market.
Further, as noted above, the inclusion of counterparty information in the collection will improve financial stability through more robust supervision and additional official sector insight into this market. Supervisors will be more able to identify earlier and more accurately firms that might be under stress. Developing risks and potential disruptions, both within the CCP and within the broader market, could be identified with sufficient time to allow for appropriate mitigation measures.