Treasury repo data collection proposal out for 60 days

The Treasury Office of Financial Research (OFR) is proposing a rule for required reporting on centrally cleared repurchase agreement (repo) transactions, which make up about one-fourth of all repo market transactions.

The proposal, according to the OFR, would require reporting by U.S. central counterparties (CCPs) whose average daily total open commitments in repo contracts across all services over the prior calendar quarter is at least $50 billion; currently, that would apply to just one entity (whose corporate parent’s total consolidated assets were $39 billion as of March 31).

The OFR says the proposal would serve two primary purposes: (1) enhance the ability of the Financial Stability Oversight Council (FSOC) and OFR to identify and monitor risks to financial stability; and (2) support the calculation of certain reference rates.

The FSOC recommended a permanent collection of repo data in each of the previous two years. The OFR, which consulted with the council in response to the 2016 recommendation, says the proposed rule would mark an “important step” toward fully addressing the recommendation.

The OFR says it expects that the Federal Reserve Board would act as the OFR’s collection agent, with required data to be submitted directly to the Federal Reserve Bank of New York. The collected data would be used to support the FSOC and as inputs to reference rates.

Comments are due 60 days after the proposed rule’s publication in the Federal Register, which is slated for Tuesday.

Ongoing Data Collection of Centrally Cleared Transactions in the U.S. Repurchase Agreement Market