The SEC wants you to share your confidential data…confidentially

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Whose data is it anyway? Your firm’s of course. But some days it feels like everyone and their uncle wants a piece of it.

In early September, Brent Fields, Securities and Exchange Commission (SEC) Secretary,  posted a 106-page request for public comment to proposed amendments to Rule 13n-4 under the Securities Exchange Act of 1945. The Rule relates to regulatory access to security-based swap data held by security-based swap data repositories.

Cutting to the chase, the proposed rule amendments would require that security-based swap data repositories make data available to specific regulators or other authorities (including individual counter-party trade and position data), with a conditional exception from the associated statutory indemnification requirement.

 

Submit your comments before Halloween or BOO!

Statutory Requirements for Access to Security-Based Swap Data Repository Information Title VII of the Dodd-Frank Act amended the Exchange Act to provide a comprehensive regulatory framework. It conditionally requires that security-based swap data repositories make all of their data available to certain regulators and other entities “on a confidential basis pursuant to section 24, upon request.”

Key is confidentiality. The repository must notify the SEC that a request has been made by “each appropriate prudential regulator; the Financial Stability Oversight Counsel; the Commodity Futures Trading Commission; the Department of Justice; and any other person that the Commission determines to be appropriate, including foreign financial supervisors (and foreign futures authorities), foreign central banks, and foreign ministries.”

But before opening your data floodgates, each of those entities must provide you with a written agreement stating that each shall abide by the confidentiality requirements outlined in Section 24. And…”each entity shall agree to indemnify the security-based swap data repository and the Commission for any expenses arising from litigation relating to the information provided under Section 24.”

But, you still must share your data

Once conditions to the data access provisions are satisfied a repository is required to provide security-based swap data to relevant authorities.

Bottom line: When the regulators come a-calling you still have to share your data.

Which of course begs the question: How do you tracking your information? How do you ensure the regulators get what they need when they need it in the form that they like it? The smart money is on outsourcing the burden of tracking and organizing data and documents to an independent regulatory archival and compliance solutions specialist, like us to help keep your confidential ducks in confidential order. Ask about Patrina’s comprehensive regulatory archival and compliance solutions specifically designed for Broker/Dealers, RIAs, and FCMs.

Let’s talk (212- 233-1155).

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