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This regulatory reporting brief covers the Report of Selected Money Market Rates, its impact on reference rates and upcoming report changes.
The Report of Selected Money Market Rates, the Federal Reserve 2420 Report (FR 2420), is a focus area for regulators, as it is a key indicator of money market conditions. Money market conditions facilitate the assessment of market functioning and borrowing costs for money market instruments, and regulators currently have a significant focus on reviewing internal controls, data quality and governance.
Due to the nature of the data requirements, complexity of the reporting process, frequency of reporting and aggregation of values, the FR 2420 report poses two key challenges: report timing and report interpretation. As regulatory expectations have evolved beyond traditional control assessment and data quality profiling, the industry has seen an increased level of review on the FR 2420 and will be implementing changes effective September 1, 2022.
Download the full article on: Spotlight on FR 2420
Summary
The current economic environment has heightened the focus on interest rates, therefore making the FR 2420 critical. Firms have been working to eliminate risks within their reporting processes, such as reviewing report interpretations against source documentation and determining whether the right procedures are in place to support timely and accurate reporting. Regulators continue to spend time reviewing these firms’ FR 2420 interpretations, governance and report logic.
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