ISDA issued a set of "suggested operational practices" for determining the counterparty with the reporting obligation for SEC security-based swap transactions reporting. ISDA stated that the best practices reflect existing reporting standards put out by ISDA for CFTC and Canada derivatives reporting requirements.

The SOP outline scenarios under Regulation SBSR in which two persons of the same type for purposes of the rules must agree on which person is responsible for reporting. The SOP provides standardized tie-breaker logic to be used by market participants.

• Two SBSDs, both a direct counterparty to the SBS. Apply asset-class tie-breaker logic, which is broken down by (i) credit, (ii) equities, (iii) rates and (iv) the legal-entity identifiers tie-breaker process.

• One SBSD is a direct counterparty and faces one non-SBSD guaranteed by a SBSD. The SBSD that is the direct counterparty is the reporting counterparty.

ISDA said that SOP is intended to be consistent with Regulation SBSR Rule 901(a) ("Assigning reporting duties") and (ii) related April 2020 SEC relief. ISDA explained that the logic will apply for the four-year period provided under the SEC relief, and noted that should the SEC extend the relief period, the logic will apply to any additional extension.

1. ISDA Data & Reporting: SEC SBS Transaction Reporting Party Requirements

2. Security-Based Swap Transaction Reporting Party Determination: Industry Suggested Operating Practices ("SOP")