Jon Ford, Head of Fixed Income Business Development

On May 6th, 2024, the Office of Financial Research (OFR) released its final rule on the “Ongoing Data Collection of Non-Centrally Cleared Bilateral Transactions in the U.S. Repurchase Agreement Market”. This new rule introduces significant changes to how certain financial entities report their non-centrally cleared repo (NCCBR) transactions.

Why now?

The OFR noted that NCCBR is the only segment within the repo industry for which regulators do not currently have a data source at transaction level. They cited a number of risks in respect of NCCBR transactions, including lower quality collateral, more heavily leveraged participants, and inconsistent margining.

Are you affected?

The OFR rule targets brokers, dealers, and other financial companies whose daily commitments to borrow cash or extend guarantees in NCCBR transactions during the prior quarter averages at least $10billion per business day.

Implementation will occur in two phases:

  • Category 1 firms, estimated to be around 40 dealers (registered as such with the SEC) that satisfy the $10billion threshold. Their reporting will begin in December 2024.
  • Category 2 firms, which includes large, active hedge funds and asset managers with at least $1 billion Assets Under Management (AUM), who also satisfy the $10 billion threshold. Their reporting will start in April 2025.

The rule mandates daily reporting of 32 fields, which is less extensive compared to the SFTR requirements in Europe.

Initially, $2 trillion in deals are expected to be covered under this rule, though this figure may decrease to between $300 billion and $600 billion following the implementation of mandatory clearing. The Central Clearing mandate (17AD-22€) might affect reporting, but the OFR expects at least 40 firms to be required to report from December 2024 until at least June 2027, 12 months after the SEC’s central clearing deadline.

Pirum has you covered

Pirum has industry-leading experience in assisting with regulatory reporting (including in collaboration with S&P Global Market Intelligence Cappitech, SFTR in Europe). We are now extending this expertise to the U.S. to assist with SEC 10c-1a, exploring its impact and how we can support the industry with complying with this new regulation. If you or your regulatory reporting team require more information or would like to discuss how we can help with OFR reporting, please reach out to us via the form on the RepoConnect page through the button below.