White House Reviews SEC, CFTC Joint Plan for Swaps Reporting Overhaul
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
swapssec
Fazen Markets Editorial Desk
Collective editorial team · methodology
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The White House Office of Information and Regulatory Affairs (OIRA) initiated its review of a joint proposal from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) on June 1, 2026. This action represents a critical procedural step in the agencies' long-running effort to harmonize reporting requirements for swaps and security-based swaps. The review, which typically lasts up to 90 days, precedes the public release of the proposed rulemaking for industry comment. The initiative aims to standardize data fields and reduce compliance burdens for major financial institutions.
The push for regulatory harmonization between the SEC and CFTC dates back to the Dodd-Frank Act of 2010, which gave the agencies overlapping jurisdiction over the swaps market. A significant precedent was the agencies' 2022 joint proposal on swap execution facilities, which took 14 months from OIRA review to finalization. The current effort directly addresses persistent industry complaints about dual reporting to separate data repositories, a system that has been in place since the last major reporting rule update in 2024.
The timing is influenced by the ongoing review of Basel III endgame capital rules, creating a confluence of regulatory pressures on bank balance sheets. Global regulators are also pushing for greater transparency in the $600 trillion notional swaps market following the UK gilts crisis of September 2022. The current proposal was triggered by a 2025 joint staff report that identified over 150 inconsistencies between the CFTC's swap data repository (SDR) and the SEC's security-based swap data repository (SBSDR).
The global swaps market has a notional outstanding value exceeding $610 trillion as of Q1 2026. Interest rate swaps constitute the largest segment at $485 trillion, followed by credit default swaps at $12 trillion. The current dual reporting regime affects approximately 125 registered swap dealers and major security-based swap participants. Compliance costs for these entities are estimated at $2.1 billion annually, with reporting-related expenses accounting for nearly 30% of that total.
| Metric | Pre-Proposal System | Post-Harmonization Projection |
|---|---|---|
| Unique Data Fields Reported | 152 (CFTC) vs 138 (SEC) | ~100 (Harmonized) |
| Average Reporting Time Per Trade | 4.5 minutes | 2.8 minutes |
| Annual Industry Compliance Cost | $630 million | $230 million |
Standardization could reduce reporting time by 38% for complex credit default index swaps. The OTC derivatives market has grown 18% since the last major reporting rule change in 2024. Major dealers like JPMorgan Chase and Goldman Sachs spend over $100 million each per year on swaps compliance.
The greatest beneficiaries of harmonized reporting will be global systemically important banks (G-SIBs) with large swaps portfolios. JPMorgan Chase (JPM), Goldman Sachs (GS), and Morgan Stanley (MS) could see a 15-20% reduction in compliance-related operational costs, potentially boosting annual earnings per share by $0.25 to $0.50. Custody banks like Bank of New York Mellon (BK) and State Street (STT), which provide collateral management services, may experience higher volumes from streamlined processing.
A key risk is that harmonization could lead to initial implementation costs exceeding $50 million per large dealer, creating a short-term drag on profitability. Data vendor stocks like Bloomberg LP and Refinitiv could see reduced demand for their proprietary data normalization services if regulators create a more unified public data set. Trading desks are already positioning for the change by increasing automation investments, with flow pointing towards technology providers like Broadridge Financial Solutions (BR).
The OIRA review period is the primary near-term catalyst, with a conclusion expected by August 30, 2026. Following this, the official notice of proposed rulemaking (NPRM) will be published, initiating a 60 to 90-day public comment period. Key levels to monitor include the SEC's upcoming vote on Regulation SCI amendments for SBSDRs, scheduled for July 15, 2026.
Market participants should watch for the CFTC's Technology Advisory Committee meeting on June 20, 2026, where staff may preview technical specifications. The final rule is projected for Q2 2027. A key threshold for implementation will be the alignment of legal entity identifier (LEI) reporting standards across jurisdictions, a longstanding point of friction with European regulators.
A swap is a derivative contract based on interest rates, currencies, or broad commodities, falling under CFTC jurisdiction. A security-based swap is linked to a single security or narrow-based index, such as a credit default swap on a specific company's debt, placing it under SEC oversight. The distinction, rooted in the Dodd-Frank Act, is why dealers currently report similar transactions to two different regulatory bodies and data repositories.
Regulators assert that harmonization will improve transparency by creating cleaner, more comparable data across the entire derivatives market. The current system, with its conflicting data fields and formats, obscures risk exposures. A unified reporting standard would allow regulators to aggregate positions more accurately, potentially providing better early warning signals for systemic risk. The public data sets may also become more useful for academic and market analysis.
End-users, such as corporations using swaps to hedge interest rate or foreign exchange risk, will likely see reduced administrative burdens. Their reporting obligations are often handled by their dealer banks. Streamlined reporting could lower the overall cost of entering into hedging contracts. The changes are not expected to alter the end-user exception from clearing and trading mandate rules established under Dodd-Frank.
Regulatory harmonization promises significant cost savings for dealers but faces a complex implementation timeline.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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