ISDA filed its response to FCA consultation CP26/30 on October 16, opposing the extension of public post-trade transparency to equity swaps and questioning a proposed three-year window for back-reporting of incorrect and failed post-trade reports.

The consultation, CP26/30, centres on cash equity market structure and transparency. Yet two of its questions reach into the derivatives workflow: whether equity swaps should enter the scope of public transparency, and whether firms should re-report faulty or failed post-trade transparency reports across a three-year lookback window.

What does ISDA want on equity swaps?

On equity swaps, ISDA reiterated the opposition it set out in its earlier response to the discussion paper within CP25/20, filed jointly on September 15. That submission, made with the Global Financial Markets Dealers Association's FX and derivatives constituency (GFXD), addressed the systematic internaliser regime for derivatives and bonds.

ISDA did not soften its position this time. The association maintains that equity swaps — instruments where the payoff references an equity but the contract itself sits off-exchange — should remain outside public transparency scope, consistent with its September arguments.

The question matters for desks that hedge swap exposure in the cash market. If equity swaps fell within public transparency, hedging flows would become visible to the market, with potential consequences for execution cost and timing for buy-side and sell-side participants alike.

The takeaway: ISDA is holding a consistent line, first stated in September, that equity swaps do not belong in public post-trade transparency.

Why does the three-year window matter?

The second flashpoint is the FCA's proposed three-year back-reporting window for incorrect and failed post-trade transparency reports. Under the proposal, firms would need to identify and correct reporting errors stretching back three years.

ISDA argued that the FCA should consult further before fixing that window. The association's stated test is one of balance: ensuring the market has access to all relevant information about executed transactions, while keeping regulatory costs for firms proportionate to the benefits delivered.

For reporting desks, the difference is concrete. A three-year lookback means remediation projects covering historical transaction records, data reconciliation and resubmission infrastructure — work whose cost scales with the length of the window.

ISDA's position is procedural, not substantive: the association does not say the window should be shorter or longer. It says the FCA has not yet done the work to justify the chosen duration.

The takeaway: ISDA wants evidence, not a deadline — a further consultation to size the costs against the benefits before the window is fixed.

What comes next?

The FCA will now weigh consultation responses as it decides whether to proceed with rule changes on equity swap transparency and the back-reporting window. Firms with equity swap books or post-trade reporting obligations should watch for a follow-up FCA paper, which would set out the final scope, the reporting window and any compliance deadlines.