MFA submits letter to the CFTC regarding COT Reports

MFA submitted a letter to the Commodity Futures Trading Commission (CFTC) on periodically reassessing Commitments of Traders (COT) Reports to create a balance between transparency and confidentiality of market participants.

MFA suggests the following recommendations:

• Maintain current cadence: Retain the weekly Friday publication as the baseline, which has demonstrated an effective balance between transparency, accuracy, and confidentiality protections.
• Ensure privacy of trader information and data quality before considering publishing less latent information: The Commission should defer consideration of any shift to Wednesday trading data (submitted Thursday, published Friday) to reduce data staleness unless and until the Commission can demonstrate that this change does not put trader information or identity at risk, or degrade data quality, validation processes, or increase error rates.
• Defer increased frequency: Do not move to semi-weekly or more frequent reporting unless and until the Commission establishes it can operate reliably under a compressed weekly reporting cycle without introducing additional risks.
• Protect data integrity: Preserve a multi-day validation, correction, and classification review pipeline as a core feature of the program; treat data accuracy and consistency as non-negotiable gating conditions for any changes.
• Increase safeguards to large trader confidentiality: Maintain strong aggregation and anonymization standards to mitigate the risk that more frequent or granular reporting could enable identification of individual traders or proprietary strategies.
• Apply minimum thresholds: The Commission should publish any disaggregated report with fewer than four traders in "Other Reportables," to mitigate risk of exposing traders or strategy and then publish under its own category (e.g., "Managed Money") if there are four or more traders represented.
• Improve classification: Disaggregate the "Other Reportables" category into more economically meaningful subcategories (e.g., proprietary firms, family offices, retail participants) using existing reporting data to enhance interpretability.
• Implement cautiously: Pursue any changes through phased pilots, testing, and staged implementation, consistent with prior Commission practice, evaluating impacts on data quality, confidentiality, and market functioning before broader rollout.
• Evaluate market impact: Carefully assess how changes to timing, frequency, and granularity interact with market structure, including liquidity, concentration, and the potential for copycat or volatility-amplifying trading behavior.