The Depository Trust & Clearing Corporation (DTCC) began user testing its global trade repository for OTC foreign exchange on May 1 and is planning full production by the fourth quarter. The repository is the last of five planned global repositories for OTC derivatives being developed and operated by DTCC.
The repository will be delivered in two phases to facilitate testing and provide greater flexibility for firms who plan to use the repository service to meet regulatory reporting requirements, said the DTCC.
The first phase, which began May 1, will cover testing for data submission of primary economic terms, confirmation data and snapshot reporting for FX forwards, swaps and derivatives by firms. These capabilities bring FX to a consistent level to that of other derivative asset classes supported by DTCC. The second phase, which is expected to start around July 1, will add testing for further message types and extend reporting, and full production is expected to be available in October.
For foreign exchange products, DTCC is working on establishing aggregate public data reporting capabilities and is working with the OTC Derivatives Regulators’ Forum (ODRF), central bank-sponsored Foreign Exchange Committees and the Global FX Division of the Global Financial Markets Association (GFMA). DTCC plans on publishing aggregated data on OTC foreign exchange trades, such as by volume, currency, product type, and tenor. Both the public and regulatory data are expected to be made available in the fourth quarter of 2012.
“The rollout of the FX repository caps a busy year for DTCC of designing, developing and implementing global trade repositories for three different classes of OTC derivative products and providing reporting to regulators to monitor that trading and systemic risk globally, as well as greater public transparency,” said Stewart Macbeth, CEO of DTCC Deriv/SERV LLC.
DTCC developed the first trade repository in the world for OTC credit derivatives, initially called the Trade Information Warehouse. That warehouse now houses trade information on more than 98% of all the OTC credit derivatives globally. The company then subsequently received industry approval, following a competitive process, to develop global trade repository services for equity, interest rate, commodity (with the European Federation of Energy Traders) and foreign exchange (with SWIFT) OTC markets.