Sometimes bad things happen and messages don't make it to the SDR due to a human or technical issue. Or data not required to be reported is sent to the system. Once spotted, the over or under-reported data needs to be corrected in the SDR.
Missing messages (under-reported) or messages not needed to be reported (over-reported) are both caught under the obligation for firm to ' completely and accurately report Swap Data' as per CFTC Rule(s) §45.14(a)(1).
As such over or under-reporting is subject to requirements to correct errors ASATP and notify the regulator if cannot do so with 7 days of issue discovery as per CFTC Staff Letter No. 22-06.
For complete background to correct errors please refer to here:
What are the requirements to correct errors?
KOR Financial is working on analytical tools that will help to spot over and under-reporting. The "missing" reports we offer is the first step to identifying issues. Once discovered the above legal requirements dictate that missing or superfluous data:
- be considered as an error based on the regulation above
- be corrected ASATP:
- If correcting the data is not possible within 7 days of discovery, must notify the CFTC as per CFTC Staff Letter No. 22-06.
- over-reported messages should be removed through an action type Error (as detailed in the KOR SDR technical specification)
- missing data must be reported as per usual reporting standards
- if client believes the issue in correcting the data is related to the KOR SDR system (for example (UPI, validations, connectivity, etc..) then must enter a KOR support ticket (How do I create a support ticket) as soon as practicable but not later than the Business Day following the discovery.
Note that there is no need to notify KOR SDR of over or under-reporting unless the client believes the issue in correcting the data within 7 days is due to KOR SDR as above or requires other assistance.