Part 45: Method of verification
KOR SDR shall provide an open swaps report to all Clients and their Delegated Reporters or Authorized Access Clients when applicable. This report will provide the User with a view of the most recent validated and accepted open swaps for which they have access for each field that was required to be reported per Part 45 of CFTC rules where the Client is the Reporting Counterparty. This information will allow Clients to successfully perform Swap Data verification required under CFTC Rule § 45.14
Each Reporting Counterparty shall utilize this mechanism for verification. The Client must compare all Swap Data in the open swaps verification report with all Swap Data contained in the Reporting Counterparty's internal books and records for each swap, to verify that there are no errors in the relevant Swap Data maintained by the Swap Data Repository. In the event the Client identifies an error, including but not limited to: (1) an invalid field value, (2) a missing field value, (3) an incorrect UTI, (4) a swap that is not reported, (5) a swap that is closed that should be open, (6) a swap that is open that should be closed, (7) a swap that is reported that should not have been reported, or (8) a swap who’s counterparty’s identifier should be updated; then the Client is required to resubmit and correct the UTI(s). After submitting all of the corrections, the Client is required to re-execute the open swaps verification report and verify the identified swaps are now correct. This process shall not be re-executed after each individual swap is corrected, but instead after the Client believes all incorrect swaps have been corrected. This process shall be repeated until the Client has verified that the open swaps report is in line with their internal books and records.
Notwithstanding the foregoing, a Reporting Counterparty is not required to verify the accuracy and completeness of any Swap Data to which the Reporting Counterparty is not permitted access under the Act or Commission regulations, including, but not limited to, CFTC Rule §49.17. KOR SDR is required to adhere to all applicable confidentiality requirements of the CEA and Part 49 of CFTC rules, including, but not limited to, CFTC Rule §49.17. The Swap Data accessible to any Reporting Counterparty or their Delegated Reporter or Authorized Access Client shall not include any Swap Data that the relevant Reporting Counterparty is prohibited to access under any Commission regulation.
In particular, under CFTC Rule 49.17(f), KOR may not permit either counterparty, third party reporter, agent or clearing member to access the opposing counterparty LEI or counterparty clearing member for cleared swaps executed anonymously on a SEF or DCM.
As the Client does not provide feedback to KOR SDR that they have executed or completed the verification process, KOR SDR shall not produce any reports as to the Reporting Counterparty’s compliance with CFTC Rule 45.14.
References: CFTC Rule(s) §45.14(b)(1), 45.14(b)(2), 49.11(b)(1), 49.11(b)(2), and 49.11(b)(3).
Part 45: Verification policies and procedures
In performing verification as required, each Reporting Counterparty shall conform to KOR SDR Rule: Part 45: Method of verification. If a Reporting Counterparty utilizes a Delegated Reporter or Authorized Access Client to perform verification, the Reporting Counterparty shall require the Delegated Reporter or Authorized Access Client to conform to the same policies and procedures while performing verification on behalf of the Reporting Counterparty.
References: CFTC Rule(s) §45.14(b)(2), 49.11(c)(1), and 49.11(c)(2).
Part 45: Correcting errors
Any and all errors discovered during the verification process shall be corrected.
References: CFTC Rule(s) §45.14(b)(3).
Part 45: Error defined
For the purposes of data verification, there is an error when Swap Data is not completely and accurately reported. This includes, but is not limited to, the following circumstances:
a. Any of the Swap Data for a swap reported to a Swap Data Repository is incorrect or any of the Swap Data that is maintained by a Swap Data Repository differs from any of the relevant Swap Data contained in the books and records of a party to the swap.
b. Any of the Swap Data for a swap that is required to be reported to a Swap Data Repository or to be maintained by a Swap Data Repository is not reported to a Swap Data Repository or is not maintained by the Swap Data Repository as required by this part.
c. None of the Swap Data for a swap that is required to be reported to a Swap Data Repository or to be maintained by a Swap Data Repository is reported to a Swap Data Repository or is maintained by a Swap Data Repository.
d. Any of the Swap Data for a swap that is no longer an Open Swap is maintained by the Swap Data Repository as if the swap is still an open swap.
References: CFTC Rule(s) §45.14(c)(1), 45.14(c)(1)(i), 45.14(c)(1)(ii), 45.14(c)(1)(III), and 45.14(c)(1)(iv).
Part 45: Presumption
There is a presumption that an error exists if the Swap Data that is maintained and disseminated by the SDR for a swap is not complete and accurate. This includes, but is not limited to, the Swap Data that the SDR makes available to the Reporting Counterparty for verification.