Director, Division of Trading and Markets

February 17, 2026

Mr. Jamie Selway

Director, Division of Trading and Markets

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Re:

Application of Structured Machine-Readable Language to Security-based Swap

Dealer Chief Compliance Officer Annual Compliance Reports

Dear Mr. Selway,

The Securities Industry and Financial Markets Association 1 (“SIFMA”) is writing to highlight

critical concerns about certain requirements included in the U.S. Securities and Exchange

Commission’s (“SEC” or Commission”) Electronic Submission of Certain Material Under the

Securities Exchange Act of 1934; Amendments Regarding the FOCUS Report (“Final Rule”). 2

We are taking the opportunity to comment in response to Staff’s request for feedback on a draft

taxonomy related to the submission of securities-based swap dealer (“SBSD”) chief compliance

officer annual compliance reports (“CCO ACR”)3 to highlight significant shortcomings in the

Final Rule specific to the CCO ACR, but have critical concerns with other requirements, which

we look forward to discussing with staff and the Commission in due course.

1

SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the

U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation,

regulation and business policy affecting retail and institutional investors, equity and fixed income markets and

related products and services. We serve as an industry coordinating body to promote fair and orderly markets,

informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for

industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the

U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit

http://www.sifma.org.

2

See Electronic Submission of Certain Materials Under the Securities Exchange Act of 1934; Amendments

Regarding the FOCUS Report, 90 FR 7250 (Jan. 21, 2025).

3

See Draft of Updated 2026 Security-Based Swaps (SBS) Taxonomy (Dec. 18, 2025).

Background

In early 2023 the Commission approved a proposed rulemaking covering a very broad number

of different types of forms, filings and submissions that are required to be filed with or submitted

to the Commission under the Securities and Exchange Act of 1934 and related rules and regulations

thereunder (“Proposed Rule”).4 Among many proposed requirements, the Proposed Rule would

require the electronic filing or submission on the Commission’s Electronic Data Gathering,

Analysis, and Retrieval (“EDGAR”) system, using structured data for certain materials, framed as

part of the Commission’s effort to modernize its information collection and analysis methods.

In our comment letter submitted on May 22, 2023, 5 SIFMA expressed its support for

modernizing the document submission process for broker-dealers, OTC derivatives dealers and

SBSDs, and improving the utility and functionality of the forms and their data for the Commission,

market participants, and dealers. These included, for example, updates to FOCUS reports which

had been the subject of significant and productive discussions between staff and industry aimed at

achieving the shared goal of improving functionality and utility of forms and their data.

At the same time, however, we noted strong concern with several requirements (e.g., structured

data language for unstructured documents) that would impose significant costs and burdens on

market participants without providing a clear benefit. Further, we described many cases where

there are mechanisms to achieve the Commission’s objectives that would be substantially less

costly and burdensome for firms than those proposed. In addition, some aspects of the Proposed

Rule, such as the requirement to submit fillable web forms on EDGAR in lieu of PDFs, would

undermine the Proposed Rule’s goals by introducing inefficiencies and opportunities for human

error.

On December 16, 2024, the Commission approved, three vote to two, the Final Rule, retaining

most of requirements we urged the Commission to reconsider. The two dissenting Commissioners

in their December 16 statement pointed out one of the key themes we raised – that imposing

structured data requirements without considering rapid technological advancement runs counter to

the stated Commission objectives.6

4

See Electronic Submission of Certain Materials Under the Securities Exchange Act of 1934; Amendments

Regarding the FOCUS Report, 88 FR 23920 (Apr. 18, 2023).

5

SIFMA letter in response to the Proposed Rule (May 22, 2023), https://www.sifma.org/wpcontent/uploads/2023/05/Electronic-Submission-of-Certain-Materials-Under-the-Securities-Exchange-Act-of1934.pdf (“SIFMA Letter”).

6

See Commissioner Hester M. Peirce and Commission Mark T. Uyeda, Dissenting Statement on Electronic

Submission of Certain Materials Under the Securities Exchange Act of 1934 and Amendments Regarding the

FOCUS Report (Dec. 16, 2024).

2

Another key theme we raised is that the evaluation on the costs of mandating structured

language requirements cannot be conducted properly without staff providing at least a draft

taxonomy, the analysis of which would be the first step in any cost assessment. Since no such

taxonomy was produced, it was not possible for anyone to accurately assess costs. Further, because

the work necessary to comply with structured language requirements – including mapping report

content to taxonomy and any necessary report redesign, as well as technological and operational

builds and testing – cannot begin until a final taxonomy is published, we urged the Commission to

link compliance deadlines for various reports with the publication of a related final taxonomy. The

Final Rule set compliance deadlines for registrants without acknowledging the lead time postpublication of a taxonomy needed to accomplish compliance. Further, the Final Rule did not set

any deadlines for the publication of taxonomies (or EDGAR functionality for that matter).

By early 2025 there were no published draft, let alone final, taxonomies, and therefore there

would not be sufficient time for the implementation of certain of the structured language and

EDGAR publication requirements, which would have begun in January 2026. Considering the

foregoing, as well as SIFMA’s continuing belief that certain requirements in the Final Rule were

not fit for purpose, in May 2025 SIFMA wrote to Staff requesting an extension of certain

compliance dates.7 In September 2025, the Commission published a final rule extending

compliance dates by 12 months.8

Since the publication of the Final Rule, there have been other policy developments relevant to

reconsideration of these requirements. In early 2025, President Trump issued executive orders on

deregulation which emphasize, among other criteria, that cost of regulation should not outweigh

its benefits.9 Consistent with that mandate, the Commission, together with the U.S. Commodity

Futures Trading Commission (“CFTC”) launched a workstream on regulatory harmonization

efforts, which were kicked off by an SEC-hosted roundtable on September 29, 2025 and followed

up by a joint event hosted by the CFTC on January 29, 2026. Coordination and harmonization

were highlighted at both events and by both chairmen. Chairman Atkins noted “…for decades, we

have compelled market participants to operate within a maze of overlapping and often inconsistent

regulatory frameworks that reflect historical boundaries more than modern realities.” 10 This

imperative applies as aptly to swaps regulation, as it does to regulation of crypto.

7

8

9

10

Letter from Kyle Brandon, Managing Director, SIFMA (May 13, 2025)

See Extension of Compliance Dates for Electronic Submission of Certain Materials Under the Securities

Exchange Act of 1934; Amendments Regarding the FOCUS Report, 90 FR 43552 (Sept. 10, 2025).

See Ensuring Lawful Governance and Implementing the President's “Department of Government Efficiency”

Deregulatory Initiative, Executive Order 12866 (Feb. 19, 2025).

Chairman Paul S, Atkins, Opening Remarks at Join SEC-CFTC Harmonization Event – Project Crypto (Jan. 29,

2026).

3

Executive Summary

As discussed in greater detail below, the requirement to submit the CCO ACRs using structured

machine-readable language is flawed in many significant ways. While we highlighted many of

these concerns and objections to the requirement to use eXtensible Business Reporting Language

(“XBRL”) in the SIFMA Letter on the Proposed Rule, we provide further comments below to

illustrate the need to revisit this requirement well before the January 2027 compliance date.

We believe the imposition of XBRL requirements on the CCO ACR submission is inconsistent

with both the risk management purpose and regulatory policy goals of the CCO ACR. Further, it

is contrary to the current, broader SEC goals of modernization, efficiency, cost reduction, clarity

and harmonization. Consistent with those goals, the current Commission is carefully evaluating,

and where appropriate, alleviating regulatory burdens that are not justified on a cost-benefit basis.

We believe the imposition of the requirements described in this letter does not meet this

Commission’s standards.

The previous Commission did not consider adequately the costs imposed by the Final Rule,

nor seriously consider available alternatives to achieve its stated goal of improving the usefulness

of the CCO ACRs for supervision purposes. There is an opportunity for the Commission to correct

that oversight and tailor its requirements to facilitate appropriate supervision without imposing

unnecessary costs and undermining the usefulness of this report for the broad range of purposes it

serves.

Further, the draft taxonomy is not fit for purpose and includes inconsistencies with the CCO

ACR content requirements.11 For illustration purposes, the draft taxonomy introduces tags for

sections that are not required to be submitted as part of the CCO ACR, as well as creates separate

tags for subtopics that are part of the same required topic. At the same time, the draft taxonomy is

inflexible in that does not contemplate, for example, the ability to submit non-U.S. reports that

don’t conform to the requirements of SEC Rule 15fk-1(c), as described herein.

Below we elaborate on several key themes we believe support our request that the Commission

reexamine and consider withdrawing structured language requirement from the CCO ACR section

of the Final Rule.12 The requirement to apply structured machine-readable language to the CCO ACR:

 Is Incompatible with the Nature and Purpose of the Reports;

 Conflicts with SEC-CFTC Harmonization Goals;

 Undermines Substituted Compliance;

 Adds Unnecessary Complexity and Liability;

 Imposes Unjustified Costs; and

 Was Finalized Without Due Consideration of Lower-Cost Alternatives.

11

12

We provide this non-exhaustive list of examples of inconsistency with the CCO ACR and related requirements

for informational purposes, not to imply that we believe the XBRL requirement can be fixed by fixing the

taxonomy.

As we mentioned above, we believe reconsideration is also needed in regard to requirements related to the

submission of other materials, including structured language requirements for financial and risk reports and

EDGAR submission of valuation dispute notices and relying entity notices.

4

The Requirement to Apply Structured Language to the CCO ACR Is Incompatible with the

Nature and Purpose the Reports

Registrants tailor CCO ACRs to the specific needs of each firm, reflecting characteristics such

as their specific size, scope, and governance structures. This means reports are inherently different

across SBSDs, and therefore a “one-size-fits-all” approach is not appropriate. The Commission,

and the CFTC before it, did not create a templated report for good reasons. As a result, the

assumption that the CCO ACRs can be standardized to the level contemplated by the draft

taxonomy is flawed given how different and unique each firm’s structure can be.

For this reason and other reasons described below, CCO ACRs are not directly comparable.

Even if sections are tagged in a structured format, they may not be comparable across firms due to

legitimate differences in how firms define quantitative figures and present qualitative information.

For example, resource figures, effectiveness assessment processes, and executive summaries can

vary significantly across firms, due, for example, to the size, jurisdiction, and scope of the firm’s

broader business(es). Additionally, at any point in time, firms may be at different stages in their

program’s maturity (newly registered vs. veteran registrants, or remediation vs. business as usual),

which will drive further differences in their reports.

Standardization would not benefit internal oversight and could even be detrimental should the

report be standardized in a way that enforces a structure and format that isn’t conducive to

supporting oversight by the internal recipients. Per regulatory requirements, the report is prepared

for internal stakeholders, including senior officer, board and audit committee or equivalent body.

Specifically, in adopting the final rule related to the CCO ACR, the Commission stated:

The Commission believes that requiring submission to the board, audit

committee and senior officer will promote an effective compliance system by

ensuring that all of these groups, not just the senior officer, have the

opportunity to review the report. The Commission believes it is important for

the board, the audit committee and the senior officer to all have the opportunity

to receive the compliance report so that they remain informed regarding the

SBS Entity’s compliance system in the context of their overall responsibility for

governance and internal controls of the SBS Entity.13

The CFTC, in its final rulemaking on the subject, similarly noted:

The annual requirement to compile in a single document the results of a

registrant's compliance policies and procedures should serve as an efficient

means to focus the registrant's board and senior management on areas requiring

additional compliance resources or changes to business practices; it also will

13

81 FR 29960, 30059 (May 13, 2016).

5

provide the Commission with a detailed overview of the state of compliance of the

industry as a whole. This annual and ongoing compliance focus will result in

increased industry compliance, thereby increasing market security and stability.

A secure and stable market fosters increased market confidence and increased

activity by investors and hedgers managing risk. 14

Implementing mandated reporting changes may necessitate some firms changing how they

organize information and structure their reports before they can tag the proposed elements, which

potentially introduces complexity when reconciling the report requirements with mandates or

preferences of very senior stakeholders.

Furthermore, forcing the CCO ACR into a structured machine-readable format risks eroding

the firm-specific nuance and judgement integral to meaningful supervisory assessment. Retaining

the narrative form enables the SEC staff to interpret risks with full context and exercise informed

prioritized oversight.

In Summary: In addition to increasing time and resources needed, structured data will reduce

flexibility necessary for CCOs/registrants and does not provide benefit or promote oversight needs

for both SEC staff and internal stakeholders (Senior Officer, Board and Audit Committee).

The Requirement to Apply Structured Language to CCO ACR Conflicts with SEC-CFTC

Harmonization Goals

The SEC’s requirement for structured data format conflicts with the CFTC’s approach, which

does not mandate strict formats.15 The SEC purposefully harmonized with the CFTC on several

SBSD report content requirements to allow SBSDs to leverage CFTC procedures. There is nothing

about these report requirements that require additional format related requirements for one agency

over the other. This is especially burdensome for the nearly 50 entities that are dually registered

with the CFTC and SEC. We discuss below alternative approaches that would maintain

harmonization, thereby avoid unjustified costs and burdens and enhance the SEC’s oversight.

In Summary: The requirement does not comport with the SEC’s policy to promote efficiency in

regulatory compliance and is contrary to efforts to harmonize swap dealer and security-based

swap dealer compliance.

14

15

77 Fed. Reg. 20128, 20190 (Apr. 3, 2012).

Certain content requirements do apply to non-U.S. SBSD relying on substituted compliance, as discussed in the

next section.

6

The Requirement to Apply Structured Language to CCO ACR Undermines Substituted

Compliance

For non-U.S. SBSDs who submit their home country reports to the SEC pursuant to the SEC’s

substituted compliance framework, the Final Rule requires use of the XBRL taxonomy to tag their

home country reports for submission, providing two extra weeks for this work to be done. The

SEC requires – and staff has emphasized – that non-U.S. SBSDs relying on substituted compliance

must submit their home country compliance reports “as is”. Home country requirements will, quite

naturally, not align with the SEC’s taxonomy, and therefore structured data tagging of home

country compliance reports “as is” is not even feasible, regardless of the extra time provided. This

would leave the firm with an impossible choice of complying with a core condition of substituted

compliance for CCO ACRs or compliance with the tagging requirements of the Final Rule.

Further, because substituted compliance for all components SEC Regulation 15fk-1 requirements

applicable to SDBS CCOs is “all or nothing” the inability to meet the conditions for substituted

compliance for one component – the CCO ACR – would result in SBSDs not being able to rely on

substituted compliance for any of the other obligations applicable to CCOs under 15fk-1.

In Summary: This requirement undermines the ability of non-U.S. SBSDs to rely on the SEC’s own

substituted compliance orders. As described above, firms relying on substituted compliance are

required to submit their home country reports “as is” to satisfy the conditions of the substituted

compliance orders not only for the CCO ACR, but all obligations applicable to CCOs under 15fk1. In practice, this means these firms would be required to prepare the same report in different

formats: one to satisfy home country requirements and one to satisfy the XBRL requirements.

Registrant time and resources would be better spent preparing, validating and refining substantive

report content.

The Requirement to Apply Structured Language to CCO ACR Introduces Complexity and

Liability

As part of the CCO ACR submission process, the CCO is required to make a certification on

the completeness and accuracy of the content of the report (“CCO Certification”). The risk of the

current or future staff deciding that the required CCO Certification extends to XBRL tagging may

expose CCOs to enforcement actions for technical tagging errors that are unrelated to the

substantive accuracy of the report, and will require firms to implement additional processes and

controls to ensure tagging accuracy, resulting in additional efforts and administrative costs without

commensurate benefit. Further, mis-tagging could potentially be considered a material error,

necessitating resubmission of reports.

Setting aside potential liability for tagging inaccuracies, the fact that the draft taxonomy does

not align with report content requirements similarly introduces potential uncertainty and confusion

7

regarding the substantive reporting requirements themselves, which again introduces unnecessary

complexity and potential liability. As noted above, the draft taxonomy introduces tags for sections

that are not required to be submitted as part of the CCO ACR (e.g., organizational description,

non-material non-compliance issues). At the same time, the draft taxonomy is also not broad

enough as it does not contemplate the ability to submit non-U.S. reports that don’t conform to the

requirements of SEC Rule 15fk-1(c), as described above.

In Summary: The use of XBRL tagging increases liability/compliance risk for no demonstrated,

meaningful benefit.

The Requirement to Apply Structured Language to CCO ACR Imposes Unjustified Costs

There are a range of direct and indirect costs associated with applying a structured machinereadable language such as XBRL to a report. These range from the cost of licensing software,

mapping and restructuring a report to align with a new or changing taxonomy, in many cases

identifying and onboarding a new vendor (subject to third party risk management requirements),

set up of the report in XBRL, and creation and submission of such reports.

Further, these costs may vary considerably between firms that already have a vendor that will

offer XBRL tagging for the CCO ACR and those who do not. Although existing relationships may

not even be particularly helpful, as those relationships would only mitigate onboarding costs, as

the direct set up, creation and submission costs would apply to each report for each entity. Based

on SBSD preliminary discussion with vendors, some do not plan to offer this service because the

nature of the report does not match their expertise (which is focused on reporting of quantitative

figures not qualitative, narrative report such as the CCO ACR). Also, as noted above, the draft

taxonomy does not align with the rules, further hampering the ability of firms or potential vendors

ability to provide cost estimates. From the limited feedback received the estimated direct cost of

initial XBRL set is in the range of $50,000 and for firms with no experience with XBRL, the setup cost estimate would be $100,000 or more. The estimated cost for annual creation and

submission of each is approximately $100,000.

Indirect costs include the additional resources and time needed to facilitate tagging and review

for accuracy, logistics and preparation, as well as the increased risk for error that could result in

additional costs associated with re-filing. All of these indirect costs could serve to take away

resources from more substantive review or checks supporting the CCO Certification. Compliance

resource would be better deployed towards making sure the substance of the CCO ACR is reported

accurately, appropriately and sufficiently. SBSDs have spent considerable resources on building

tools and systems to capture, organize and synthesize data into the current firm-specific templates

to manage and produce CCO ACRs. This requirement could render useless that investment,

although the Commission has not demonstrated that the current reports are deficient.

8

In Summary: The draft taxonomy itself demonstrates the lack of justification for the cost to apply

a structured data requirement to a report that is limited in scope to the requirements under 17 CFR

240.15fk-1(c)(2). The draft taxonomy merely confirms that there is no justification for the cost of

set up and annual creation and submission using XBRL tagging. Below we discuss many steps that

staff could and should explore should it be determined that improved oversight is needed.

The Requirement to Apply Structured Language to CCO ACR Was Finalized Without Due

Consideration of Lower-Cost Alternatives

Although we raised the above concerns, among others, in our comment letter, to our knowledge

staff did not explore alternative means to achieve their stated goal of improved oversight. Such

alternatives could, for example, take the form of:



Meeting with SBSDs – individually or through industry groups – to discuss concerns and

how best to address them.



Conferring with CFTC and the National Futures Association (“NFA”) on their approaches.

The CFTC and NFA have more years of experience with these reports and twice as many

registrants as the SEC. Understanding their tools and how they perform reviews as well as

reviewing CFTC’s approach, specifically 2019 guidance, 16 which addresses how to crossreference or cite the relevant regulation, among other content guidance, would certainly

yield some insights.



Explore efficient and modern techniques for data aggregation. SBSDs currently submit

their reports in pdf, which is machine readable. It seems more efficient for a regulator to

devise standard queries that can be used across 50 reports than to require 50 reports to be

reengineered into XBRL.

Based on discussions with the CFTC and NFA, and consultation with SBSDs, staff could issue

FAQs or guidance to enhance reports and develop queries without requiring the expense and

collateral consequences of requiring XBRL.

The types of approaches described above would also have the benefit of flexibility, which the

Final Rule lacks. As the content of CCO ACRs and technologies evolve, staff can work together

with the CFTC, NFA and SBSDs to further enhance and refine the CCO ACR and the techniques

applied to aggregate and analyze them. Even in the period since this rule was first proposed, offthe-shelf artificial intelligence tools, particularly large language models, are routinely used for the

kind of analysis contemplated in this requirement and can accomplish the same analysis on reports

16

See CFTC Staff Advisory No. 14-153 (Dec. 22, 2014), CFTC Letter 19-24 (Dec. 4, 2019), and Appendix C to

Part 3 Guidance on the Application of § 3.3(e) Chief Compliance Officer Annual Report Form and Content.

9

with content that is clearly organized and structured to align with the requirements under 17 CFR

240.15fk-1(c)(2).

In Summary: The draft taxonomy was adopted without proper consultation with market

participants and swaps regulators with over a decade of experience with CCO reporting, and

without due consideration of alternative solutions, rather than insistence on the use of XBRL,

which is outdated and ill-suited to the task.

*

* *

SIFMA and its members greatly appreciate the Commission’s ongoing efforts to modernize

and make the reporting and submission process more efficient, as well as streamline and make less

burdensome regulatory compliance. We look forward to discussing our comments and

collaborating on the best possible outcome for regulatory and compliance oversight. Please do not

hesitate to contact the undersigned if you have any questions or require more information.

Sincerely,

Kyle L Brandon

Managing Director, Head of Derivatives Policy

SIFMA

CC:

The Hon. Paul S. Atkins, Chairman

The Hon. Hester M. Peirce, Commissioner

The Hon. Mark T. Uyeda, Commissioner

10