[Federal Register Volume 91, Number 138 (Tuesday, July 21, 2026)]
[Rules and Regulations]
[Pages 45638-45640]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-14710]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 20
Order Sunsetting Certain Large Trader Reporting Requirements for
Physical Commodity Swaps
AGENCY: Commodity Futures Trading Commission.
ACTION: Final Order.
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SUMMARY: The Commodity Futures Trading Commission (``CFTC'' or the
``Commission'') is issuing this Order pursuant to Sec. 20.9 of its
regulations, the sunset provision of the Commission's large trader
reporting rules for physical commodity swaps (``Part 20'' or the
``Swaps LTR Rules''). Based on the findings set out below, the
Commission is rendering the routine position-reporting requirements of
Part 20 ineffective and unenforceable, while preserving, pursuant to
Sec. 20.9(b), the Commission's authority to require the maintenance
and production, on special call, of the underlying books, records, and
futures-equivalent conversion methods. As a result, clearing
organizations, clearing members, and swap dealers will no longer be
required to file the daily and event-based position reports currently
required under Part 20.
DATES: This Order is effective on July 21, 2026.
FOR FURTHER INFORMATION CONTACT: Stephen Andrews, Deputy General
Counsel for Regulation, Office of the General Counsel,
[email protected], 202-308-7563, Commodity Futures Trading Commission,
Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
I. Background
Part 20 of the Commission's regulations requires large traders in
certain physical commodity swaps and swaptions to file position reports
with the Commission.\1\ The Commission adopted Part 20 on July 22,
2011, during the implementation of the Dodd-Frank Wall Street Reform
and Consumer Protection Act, as a temporary measure to enable the
Commission to conduct surveillance of economically equivalent physical
commodity futures, options, and swaps and to monitor and enforce
position limits at a time when the Commission's broader swap data
reporting framework had not yet been established.\2\
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\1\ 17 CFR part 20.
\2\ Large Trader Reporting for Physical Commodity Swaps, 76 FR
43851 (July 22, 2011) (``Adopting Release'').
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When it adopted Part 20, the Commission anticipated that the rules
would become unnecessary once its swap data reporting regime matured,
and it therefore included a sunset provision in Sec. 20.9. Section
20.9(a) provides that, except as otherwise provided in Sec. 20.9(b),
the sections of Part 20 ``shall become ineffective and unenforceable
upon a Commission finding that, through the issuance of an order,
operating swap data repositories are processing positional data and
that such processing will enable the Commission to effectively surveil
trading in paired swaps and swaptions and paired swap and swaption
markets.'' Section 20.9(b) permits the Commission, in its discretion,
to maintain the effectiveness and enforceability of any section of Part
20, or any requirement therein, upon finding that it provides the
Commission with positional data or data elements that materially
improve the accuracy and surveillance utility of the positional data
processed by swap data repositories (``SDRs'').
Since 2011, the Commission's regulatory framework for swaps has
changed substantially. The Commission, jointly with the Securities and
Exchange Commission, has further defined the term ``swap''; has
authorized the registration of SDRs under Part 49; has adopted and
subsequently refined the swap data reporting requirements in Parts 43
and 45; and has established position limits on economically equivalent
swaps for the most systemically significant commodities in Part 150.
Together, these developments have created a comprehensive and
continuously maintained regime for the reporting of swap transaction
and position data that did not exist when Part 20 was adopted.
II. The Part 20 Reports Now Largely Duplicate Data the Commission
Obtains Through Its Swap Data Reporting Regime.
Part 20 requires clearing organizations to report daily position
data records (Sec. 20.3), requires clearing members and swap dealers
to report daily consolidated-account position data records (Sec.
20.4), and requires related identification filings (Sec. 20.5). These
reporting obligations were designed to give the Commission daily
visibility into large positions in physical commodity swaps in the
energy, metals, and agricultural markets.
The information collected through these reports is now, in
substantial part, available to the Commission through its swap data
reporting regime. Amendments to Part 49 adopted in 2020 require SDRs to
identify ``open swaps''--a term the Commission adopted to serve the
same function as the ``open swap'' and ``closed swap'' definitions in
Part 20--and to provide the Commission with detailed reports, and
direct electronic access to, that data. SDRs also collect, and can
provide to the Commission, data identifying the futures contracts and
commodities underlying open swaps, including
[[Page 45639]]
whether a swap references or is economically related to the futures
contract relevant to the Commission's public reporting and position-
limits rules. Because SDR data is reported in a standardized format by
a small number of registered repositories, the Commission is able to
aggregate open-swap positions across market participants.
The Commission further observes that the swap data reporting regime
provides data on a more timely basis than the second-business-day (T+2)
reporting required of clearing members and swap dealers under Sec.
20.7(c),\3\ and that the quality and standardization of SDR data have
been the subject of sustained Commission attention since 2011, whereas
the substance of the Part 20 reporting requirements has not materially
changed. The forthcoming extension of the unique product identifier
(``UPI'') to the other commodity asset class is expected to enhance the
Commission's ability to surveil these markets further.
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\3\ See 17 CFR part 43 (requiring real-time public reporting of
swap transaction and pricing data as soon as technologically
practicable after execution); 17 CFR 45.3 (establishing swap data
reporting deadlines).
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III. The Commission Makes Limited Use of the Data, and Market
Participants Support Ending the Routine Reporting Requirement, Which
Imposes Substantial Costs
The routine Part 20 reporting requirement imposes significant and
recurring costs on reporting entities. Clearing members and swap
dealers must identify in-scope physical commodity swaps, convert those
transactions into futures-equivalent positions, validate the resulting
position data, and submit detailed daily reports--maintaining for that
purpose reporting systems that are separate from, and cannot readily be
integrated with, the systems used to satisfy the Commission's Parts 43
and 45 requirements.\4\
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\4\ For example, the Commission has estimated that these
requirements impose costs totaling an estimated $21,899,208 in
information collection burden and associated capital costs. See OMB
Collection 3038-0095, ICR Ref. No. 202402-3038-003 (concluded Sept.
16, 2024).
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The Commission makes limited use of Part 20 data. The data are not
used in the Commission's enforcement program, are used only
occasionally in the Commission's market oversight function, and have
become less useful as the Commission's other reporting rules have been
modernized.
The Commission has also received petitions from market participants
requesting that it sunset Part 20. The Futures Industry Association
(``FIA'') petitioned the Commission on September 22, 2025 to sunset the
Swaps LTR Rules by Commission order \5\ and, in May 2026, FIA, the
International Swaps and Derivatives Association, and the Securities
Industry and Financial Markets Association jointly petitioned to the
same effect.\6\ These petitions contend that the Swaps LTR Rules are
duplicative of, and in relevant respects inferior to, the data
available through the Commission's swap data reporting regime, and that
the conditions for sunset under Sec. 20.9 have been satisfied.
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\5\ Futures Industry Association, Petition for Repeal of a Rule
(17 CFR 1.31): Large Trader Reporting of Physical Commodity Swaps
(Sept. 22, 2025).
\6\ Joint International Swaps and Derivatives Association, Inc.,
the Futures Industry Association, and the Securities Industry and
Financial Markets Association Letter, Sunset of Large Trader
Reporting (LTR) for Physical Commodity Swaps pursuant to Regulation
20.9 (May 20, 2026).
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IV. Retaining the Commission's Authority To Call for the Underlying
Records
The Part 20 reports differ from SDR data in one respect that the
Commission has considered. These reports submitted to the Commission
include data on each trader's swap position already converted into a
standardized futures-equivalent measure, which can assist the
Commission in monitoring concentration in physical commodity swap
positions. The Commission's swap data reporting systems collect the
underlying swap transaction records and open swap position data but are
not presently configured to process that data into the same futures-
equivalent form, in part because the UPI framework for the other
commodity asset class is not yet fully implemented. The Commission is
able to perform that conversion itself, at least in part, from the data
it already receives, supplemented by market data.
To ensure the Commission can continue to maintain the effectiveness
and enforcement of any section of this part or requirement therein, the
Commission is retaining, under Sec. 20.9(b), the recordkeeping and
special-call provisions of Part 20. Under retained Sec. 20.6, clearing
organizations and reporting entities must continue to keep records of
their transactions in paired swaps and swaptions, and of the methods
used to convert those positions into futures equivalents, and must
furnish those records--together with any pertinent information--to the
Commission upon request. Any such special call will be appropriately
scoped and will seek only records and information relevant to the
Commission's surveillance or oversight interest giving rise to the
call. Consistent with Sec. 20.6, the Commission will afford recipients
a reasonable period of time to respond to any special call, taking into
account the scope of the call, the nature and volume of the records
requested, and the format in which the recipient maintains those
records in the ordinary course of its business. Retained Sec. 20.5(b)
preserves the Commission's authority to require a Form 40S filing upon
special call, and the relevant delegations in Sec. 20.8 remain in
effect to permit those calls. As Sec. 20.6 already provides, the
required records may be kept and reproduced for the Commission in the
record-retention format that a person has developed in the normal
course of its business operations. These retained provisions therefore
call for records that reporting entities generally maintain in the
ordinary course; they do not require the ongoing conversion,
validation, and daily submission of position reports that make routine
Part 20 reporting costly. The practical effect is that firms no longer
bear the expense of daily reporting, the Commission retains a reliable
means of obtaining position information when it is needed, and the
Commission does not leave itself without access to the underlying data.
The Commission emphasizes that it is retaining the recordkeeping
and special-call provisions of Part 20 as a transitional measure. The
Commission anticipates that the forthcoming extension of the UPI
framework to the other commodity asset class, together with related
enhancements to the Commission's swap data reporting framework, will
enable the Commission to derive futures-equivalent position information
directly from the data it receives. Upon implementation of the UPI
framework for the other commodity asset class and the Commission's
satisfaction that the resulting data are sufficient for its
surveillance purposes, the Commission expects that the need for the
retained special-call authority under Sec. Sec. 20.6 and 20.5(b) will
diminish or be eliminated, and the Commission intends to revisit the
continued necessity of these retained provisions at that time.
V. Final Order
Upon due consideration and consistent with the determinations set
forth herein, the Commission hereby issues the following order:
1. Pursuant to Sec. 20.9(a), the Commission finds that SDRs
collect the swap transaction records from market participants and
construct open swap positions from the transaction records based on
requirements detailed in Part
[[Page 45640]]
45 and report these data to the Commission. The Part 45 rule update in
2020 provided additional granularity to reporting requirements
(including counterparty-related fields and standardized data elements),
resulting in higher coverage of swap transactions in which both
counterparties are identified.\7\ Further improvements in the
Commission's technical specifications for Parts 43 and 45 implemented
in January 2024 have materially increased the accuracy and consistency
of swap-market data. Taken together, these improvements, and the
Commission's direct electronic access to SDR data under Part 49, enable
the Commission to effectively surveil trading in paired swaps and
swaptions and the boarder pair swap and swaption markets. Lastly, the
Commission implemented Part 150 in 2021 to replace the Commission's
positions limits with the federal speculative position limits on 25
core physical commodity derivatives, further diminishing the
surveillance value of the routine Part 20 positional reports. In
reaching this finding, the Commission relies on the swap data reporting
and repository framework established under Parts 43, 45, and 49; the
availability to the Commission, through that framework, of transaction
and position data for open swaps; the Commission's direct electronic
access to SDR data; and the position-limits framework in Part 150. The
Commission's authority under retained Sec. 20.6 to obtain, on special
call, the underlying records and futures-equivalent conversion methods
further ensures that the Commission will not lack access to position
information in any particular case. Accordingly, the Commission has
determined that the routine position-reporting requirements of Part 20
are henceforth ineffective and unenforceable and clearing
organizations, clearing members, and swap dealers will no longer be
required to file the daily and event-based position reports currently
required under Part 20.
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\7\ 85 FR 75503, 75516 (Nov. 25, 2020) (promulgating Sec. 45.5
to require each swap be identified with a Unique Transaction
Identifier (``UTI'') in all recordkeeping and all swap data
reporting, and to require that the UTI be comprised of the Legal
Entity Identifier of the generating entity and a unique alphanumeric
code).
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2. Pursuant to Sec. 20.9(b), as explained in section IV above, the
Commission finds that the recordkeeping and special-call requirements
of Sec. Sec. 20.6 and 20.5(b), together with the definitions in Sec.
20.1, the list of covered contracts in Sec. 20.2, the delegations in
Sec. 20.8 pertaining to those provisions, and the futures-equivalency
guidance in Appendix A are necessary because they provide the
Commission with data on open swap positions and relevant data
elements--obtainable on special call--that materially improve the
accuracy and surveillance utility of the open swap position data
processed by SDRs. In exercising the special-call authority preserved
by this paragraph, the Commission or its delegates will issue calls
that are appropriately scoped to, and that seek only records and
information relevant to, the specific surveillance or oversight
interest prompting the call, and will afford recipients a reasonable
period of time to respond in light of the scope of the call and the
recipient's ordinary-course recordkeeping practices. The Commission
further finds that this retained authority serves as a transitional
bridge pending full implementation of the UPI framework for the other
commodity asset class, upon which the Commission intends to reassess
the continued necessity of these retained provisions.
Accordingly, the Commission has determined to maintain the
effectiveness and enforceability of those provisions.
Issued in Washington, DC, on July 17, 2026, by the Commission.
Robert Sidman,
Deputy Secretary of the Commission.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Order Sunsetting Certain Large Trader Reporting Requirements for
Physical Commodity Swaps--Voting Summary
On this matter, Chairman Selig voted in the affirmative. No
Commissioner voted in the negative.
[FR Doc. 2026-14710 Filed 7-20-26; 8:45 am]
BILLING CODE 6351-01-P