Meeting Date:
Friday, December 15, 2017
CFTC Staff:
Daniel Bucsa, David Aron and Owen Kopon
Organization(s):
CME Global Repository Services
External Attendees:
Laura Torphy and Michael Pozzi (CME Global Repository Services)
Additional Information:
At our meeting on November 16, 2017 you advised that you were considering modifying the requirement of proposed § 49.17(d) to maintain records “of the details of such initial request and of all subsequent requests by such [domestic or foreign regulators] for such access.” The preamble stated that these records shall include, at a minimum, the identity of the requestor or person accessing the data; the date, time and substance of the request or access; and copies of all data reports or other aggregation of data provided in connection with the request or access. In our joint response we noted that requiring that SDRs maintain data reports would render providing direct electronic access financially burdensome, challenging to implement, and most importantly, increases security concerns because the Proposal has the potential to require an SDR to propagate a given data set more than once. We supplied cost estimates in connection with implementing the rules as proposed. You advised that you are considering limiting the records that must be maintained to the meta data associated with any reports that were run. In light of this you requested that we provide a revised cost estimates to account for this amendment.
We estimate that the total setup costs would be between 1100 and 1440 with annual costs of a ¼ FTE or a total of 480 hours. Our cost estimates are based on the assumptions set forth below. We would note that we did not conduct a detailed analysis of the cost but rather utilized our experience in other jurisdictions to inform our estimates.
- An SDR would only be required to provide a single pre-formatted report containing transactions from the prior day to Appropriate Domestic Regulators (“ADR”) and Appropriate Foreign Regulators (“AFR”).
- An SDR would need to have the capability to dynamically add more fields to the criteria used to determine jurisdiction (i.e., the criteria used to determine jurisdiction would not be limited to LEI and UPI/Product Classification).
- An SDR would need to provide the report within 24 hours of the end of the prior day (excluding the published maintenance window).
- The max number of regulators an SDR would have to provide access to is 300; the total number of reports would not be over 300 in a 24 hour period (i.e., a daily report for each regulator with access); the total number of records in the SDR is no more than 1 billion.
- ADRs/AFRs would not be able to elect the frequency with which they received reports (i.e., daily, weekly and monthly), daily will be the only option. Should the Commission allow ADRs/AFRs to select the frequency with which they receive the reports SDRs will need to build a mechanism to accommodate these elections which will add to the cost.
- The method of delivery of the report is via a scheduler delivered to an sFTP folder on our network. Note, if delivery of reports to the ADR/AFR’s systems is required we would need to encrypt the data in transit, establish firewalls and a secure connection which would be much more costly. Further it would require that we agree to a common delivery method (i.e., SFTP Protocol, Windows, etc.) which would mean that all ADRs/AFRs would need to utilize the same ingestion method. Lastly this solution would require substantial coordination across up to 300 regulators if we need to bring the system down. Were the Commission to require that we provide access to run the reports via a UI it would require that we create and enforce new entitlement roles to each data set rather than at the report level. This is more complex to implement and would require higher maintenance cost than pushing a report to an sFTP folder.
We would be happy to discuss our estimates in more detail if you would find it helpful.
Kind Regards,
Laura
Laura Torphy
Global Chief Compliance Officer
CME Global Repository Services
