The Commodity Futures Trading Commission on Tuesday approved rules requiring trading firms to turn over data about the buying and selling of over-the-counter derivatives products. The new rules will for the first time give regulators a window into the market for “swaps,” a previously unregulated corner of the financial markets that played a role in the 2008 financial crisis.
“Leading up to the financial crisis, there was no required reporting about swaps trading, and this lack of market transparency made the risk that had spread throughout the financial system all the more difficult to identify,” CFTC Chairman Gary Gensler said at the agency meeting.
The rules, which were passed unanimously, require traders, banks and new data repositories for the swaps market to record trading data and turn over some of the information to regulators. Regulators are required to make part of the data available to the public at least twice a year but have indicated they could eventually release data reports more frequently.