Prime Brokerage Indicator

Question:

We believe that for physically settling FX forwards/swaps, that #99 PB Transaction Indicator is reported as False, due to the rationale below:

The definition of “Trigger Swap” requires that the relevant swap is a publicly reportable swap transaction that is required to be reported to an SDR pursuant to Part 43 and Part 45. Physically settling FX forwards/swaps are not subject to Part 43 reporting and as a result will never comply with this prong of the Trigger Swap definition. Without a Trigger Swap there is no Mirror Swap as the definition for the latter requires a contemporaneous execution with a Trigger Swap. When there is no Trigger Swap or Mirror Swap, we believe that #99 PB Transaction Indicator should be reported as false.

Can you please confirm this is in line with your expectations?

CFTC Feedback:

CFTC Staff indicated that they would be fine with the industry consensus that is able to formed on this particular point after review of the relevant PB definitions, preamble and rules.