July 25 -- The Treasury Department invites comments to OMB by August 29, 2022 regarding the Ongoing Data Collection of Centrally Cleared Transactions in the U.S. Repurchase Agreement Market.
Regulations issued in 2019 established a data collection covering centrally cleared transactions in the U.S. repurchase agreement (“repo”) market. This collection requires daily reporting to the Office of Financial Research (“Office”) by covered central counterparties (“CCPs”). The collected data will be used to support the work of the Financial Stability Oversight Council (the “Council”), its member agencies, and the Office to identify and monitor risks to financial stability, and to support the calculation of certain reference rates.
The Office of Financial Research (“Office”) is requesting comment on the rule which established a collection of information covering centrally cleared transactions in the U.S. repurchase agreement (“repo”) market. The Financial Stability Oversight Council (“Council”) recommended an ongoing collection of repo data in its 2016 Annual Report to Congress and maintained this recommendation in its 2017 Annual Report. The expanded monitoring of the repo market made possible by this collection appropriately meets Council duties and purposes because of this market’s crucial role in providing short-term funding and performing other functions for U.S. markets. The data also supports the calculation of the Secured Overnight Funding Rate (“SOFR”), which was selected by the Alternative Reference Rates Committee (“ARRC”) as its preferred alternative rate to U.S. dollar London Interbank Offered Rate (“LIBOR”), as well as the Broad General Collateral Rate (“BGCR”), helping fulfill another Council recommendation on the creation of alternative reference rates.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), the Office is authorized to issue rules and regulations in order to collect and standardize data on behalf of the Council to promote Council goals, such as helping identify and monitor risks to financial stability. The ability of the Office to collect centrally cleared repo data in this proposed rule derives from the authority to promulgate regulations for the collection of financial transaction and position data of financial companies through the Data Center in 12 U.S.C. §5344(b)(1). The promulgation of regulations for the type and scope of data collected by the Data Center is done pursuant to the general Office rulemaking authority contained in 12 U.S.C. §5343(c) which states the Office shall issue rules, regulations, and orders to the extent necessary to carry out the purposes and duties of the Office. The Office must consult with the Chairperson of the Council under §5343(c) prior to the promulgation of any rules—this consultation occurred prior to the publication of the rule.
The collection requires reporting by certain U.S. central counterparties (“CCPs”) for repo transactions. The collection serves two primary purposes: (1) enhancing the ability of the Council and the Office to identify and monitor risks to financial stability; and (2) supporting the calculation of certain reference rates. The collection is used by the Office to improve the Council and member agencies’ monitoring of the U.S. repo market through access to daily transaction data. The collection is also be used by Federal Reserve Bank of New York (FRBNY) as input into the calculation of the SOFR and BGCR. The Council recognized in prior annual reports that fragilities in LIBOR made the financial system vulnerable to instability and recommended the creation of alternative reference rates such as the SOFR and BGCR , demonstrating the nexus of rate production to financial stability. The Office also uses these data for related duties and purposes as contemplated by the Dodd-Frank Act. The Office supports the Council and its member agencies by providing collected data.
The Office has engaged with the FRBNY to act as the collection agent with required data submitted directly to the FRBNY electronically. This step was designed to decrease burden by building on a then-current voluntary electronic data submission by the sole covered reporter which has been developed by the covered reporter to operate in an automated manner. The Office has arranged with FRBNY for the transmission of collected data to the Office.
OFR Centrally Cleared Repo Data Collection webpage:
https://www.financialresearch.gov/data/cleared-repo-data/
Submission to OMB:
https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202207-1505-007 Click on IC List for collection instrument, View Supporting Statement for technical documentation. Submit comments through this site.
FR notice inviting public comment:
https://www.federalregister.gov/d/2022-15852
For AEA members wishing to submit comments, "A Primer on How to Respond to Calls for Comment on Federal Data Collections" is available at
https://www.aeaweb.org/content/file?id=5806
Aug 1 -- OFR providing more transparency into the repurchase agreement market
https://www.financialresearch.gov/from-the-director/2022/08/01/ofr-continues-efforts-to-fill-key-gap-in-financial-data/ Repurchase agreements are critical in our financial system’s money and securities markets. High-quality data are essential to assess and monitor risks in these markets, but historically little data has been available on bilateral repo activities. The OFR closed part of this data gap in 2019 by collecting data on centrally cleared transactions and has now turned its attention to the non-centrally cleared bilateral segment.
