The Commodity Futures Trading Commission (CFTC) has provisionally approved the application by the Depository Trust & Clearing Corporation (DTCC) to create and operate a multi-asset class swap data repository (SDR) in the United States.
SDRs were created under the Dodd-Frank Act and will serve as central facilities for swap data reporting and recordkeeping. SDRs are required to provide real-time reporting of swap transaction data to derivatives clearing houses and swap execution facilities.
The CFTC is requiring counterparties in credit and interest rate derivatives to begin reporting to SDRs beginning October 12. All other derivatives classes will need to be reported beginning in January. Trades between buy-side firms must be reported beginning in April next year.
DTCCs SDR, which is called the DTCC Data Repository (DDR), ensures compliance with the new regulatory requirements. DTCC already has a repository for credit derivatives, which it says holds data on more than 98% of the OTC credit derivatives trading globally.
Michael V. Dunn, chairman of DDR, says the repository will be up and running by the first day of reporting on October 12. This is an important step forward in implementing the Dodd-Frank Act and helping to bring greater transparency to the OTC derivatives market, Dunn says. It will allow the financial service industry to partner with regulators to more effectively monitor and mitigate potential systemic risk.
Dunn is a former CFTC chairman and was appointed to lead the SDR at DTCC in May.
DTCC was approved to operate the repository for credit, equity, interest rate and foreign exchange derivatives, while commodities derivatives
is pending approval from the CFTC. DTCC expects the application to be completed before January.
DTCC is working with the industry to meet the transparency needs of regulators, not only in the U.S. but globally, and expects to register solutions in many other jurisdictions as they finalize their rules, working closely with the Global Financial Markets Association [GFMA], the International Swaps and Derivatives Association [ISDA], market participants and regulators, so as to become a valuable information resource to all, says Alberto Giovannini, board member of DTCC Deriv/SERV.
(CG)