CFTC holds first public TAC subcomittee meeting
First Published 8th August 2011
Data Standardization Subcommittee holds inaugural meeting, working groups formed
Andrei Kirilenko, TAC chairman, CFTC
The U.S. Commodity Futures Trading Commission has held the first public meeting of the Technology Advisory Subcommittee on Data Standardization. The subcommittee has been formed to look into public/private solutions for creating well-accepted standards for describing, communicating, and storing data on complex financial products.
In his opening statement CFTC Chief Economist and TAC chairman Andrei Kirilenko outlined the goals of the committee as: "Promoting market stability and efficiency, increasing transparency, removing barriers to entry at various industry levels, and avoiding unduly burdensome transition costs or requirements."
Four working groups are to be formed, membership and proposed deliverables are as detailed below:
Group 1 Product and Entity Identification
There is currently no widely accepted standardized list for product and entity identification, although there are industry efforts underway in coordination with the international community. Use of such identifiers assist in the greater consistency in the collection, reporting, and management of individual transactions and mitigation of systemic risk.
Beyond and part from existing CFTC rulemakings, such as 17 CFR Part 45 Swap Data Recordkeeping and Reporting Requirements (http://www.cftc.gov/ucm/groups/public/@lrfederalregister/documents/file/2010-30476a.pdf), and related SEC rulemakings, there is a public and private need for greater standardization.
Beyond these existing rulemakings, what role can/should government regulators take in setting the timetable for completion of a standard list and obtaining/mandating consensus on standardized product and entity identifiers in the swaps market? Input on mechanisms through which these identifiers will be issued.
How can standardization be coordinated with international organizations and governmental practice without unduly delaying progress?
Analysis of how standardization in this area could be designed to minimize transition costs by not requiring pre-existing business practices to switch to different markup languages.
Eric Chacon, Global Head of Data Standards, Citigroup
Neil Chinai, Managing Director of Technology, Barclays Capital
RJ Cummings, VP Product Development, ICE
Bob Green, Vice President, DTCC Marlene McMahon, Senior Business Manager, SWIFT Americas
Brian Okupski, Director, Head of Reference Data Business, Markit
Working Group Co-Coordinators:
Andy Thatai, Data Architect, CFTC Office of Information Technology
Bill Nichols, Associate Director Information Standards, Office of Financial Research, U.S. Treasury
Group 2 Machine-Readable Legal Documents
Pursuant to Section 719(b) of Dodd-Frank, the SEC and CFTC prepared and submitted to Congress this April 2011a Joint Study on the Feasibility of Mandating Algorithmic Descriptions for Derivatives. See http://www.cftc.gov/pressroom/pressreleases/pr6017-11.html. One of the key conclusions of that study was that the economic and legal terms of a derivatives contract, including lifecycle events, could be and should be machine-readable. This is technologically achievable.
Recommendations on how and when standardized machine-readable legal documents can be created for most complex swaps, including ISDA master agreements and collateral documents.
Recommendations on how much machine-readable data can be standardized for regulatory oversight or delivery to swap data repositories.
Recommendations on whether, how, and when data on lifecycle events can be captured and analyzed by regulators to analyze net exposures in the market.
Any recommendations on how to standardize bespoke products for machine-readability.
Comments on or recommendations on how to implement Section 719(b) study recommendations concerning machine-readable documents.
Michael A. Will, Founder and Chief Technology Officer, docGenix
Pierre Lamy, VP Global Derivatives Technology Group, Goldman Sachs
Paulo Rodela, Managing Director, BlackRock Solutions
Working Group Coordinator:
Nancy R. Doyle, Assistant General Counsel, CFTC
Group 3 Semantic Representation of Financial
Pursuant to Section 719(b) of Dodd-Frank, the SEC and CFTC prepared and submitted to Congress this spring a Joint Study on the Feasibility of Mandating Algorithmic Descriptions for Derivatives.
There is a need and desire to go beyond legal entity identifiers and lay the foundation for universal data terms to describe transactions.
How to achieve consensus among varying private industry approaches to this issue?
What is a proposed timeline for achieving semantic representation and taxonomy with realistic milestones?
How to coordinate internationally with any domestic regulatory initiatives or partnerships?
Michael Atkin, Managing Director, Enterprise Data Management Council
Karel Engelen, Director and Global Head Technology Solutions
Timothy J. McHenry, Director, Information Services, NFA
Karla McKenna, Chairperson of TC68, ISO
James Woods, Chief Technology Officer, FIA Technology Services, Inc.
Working Group Coordinator:
JonMarc Buffa, Senior Trial Attorney, CFTC Division of Enforcement
Group 4 Storage and Retrieval of Financial Data
Large amounts of data will be arriving in the swap depositories. http://www.cftc.gov/ucm/groups/public/@lrfederalregister/documents/file/2010-31133a.pdf (17 CFR Part 49 Swap Data Repositories). There is a tremendous need for efficiency in design of data storage, transfer, and analysis in a standardized format. Particularly for regulatory reporting and real-time reporting, but also for internal business use, standardization in the treatment of this data is an important common goal of public and private sectors. Beyond and apart from this and other rules or rulemaking proceedings,1 what public, private, or public/private partnered initiatives can be undertaken to obtain greater standardization while ensuring privacy of data (including PPI) and minimizing transition costs?
How to best achieve this goal on a reasonable time frame, with analysis of transitions
Specific analysis of what can be easily standardized now (low-hanging fruit) and description of longer-range goals for standardization and how they can be achieved?
What elements of the storage, transfer, and retrieval of financial data could or should be open-sourced?
Without discussion of specific software or hardware products, what types of designs and technological approaches will best integrate reporting to SDRs with real-time use and analysis of market data by market participants and regulators?
Marc Donner, Engineering Director, Google, Inc.
Samuel H. Gaer, CIO and EVP, Business Services, FINRA
Adam Litke, Chief Risk Strategist, Bloomberg LP
James Moran, Global Director, Market Regulation Technology & Strategy, CME Group
Peter Marney, Senior VP, Content Marketplace, Thomson Reuters
Working Group Coordinator:
Andrei Kirilenko, Chief Economist and Data Standardization Subcommittee Chair, CFTC