The Depositary Trust & Clearing Corporation (DTCC) is rolling out operations of its FX derivatives repository, the final piece of its global trade repository for OTC derivatives, said CEO of DTCC Deriv/SERV Stewart Macbeth at a press briefing Wednesday, June 27, in its New York headquarters.
Entering its second phase of user testing in July, the program is expected to reach full production in October. Public and regulatory data will be made public in the fourth quarter of 2012, according to Macbeth.
From a trade repository perspective, to go live were waiting for the swaps further definitions rule; that is the thing that triggers the start date in the U.S., Macbeth said, adding that reporting becomes mandatory for swaps dealers 60 days after the rule comes into force.
DTCC has made global trade repository services a key strategic focus in recent years. In 2006, the firm created the Trade Information Warehouse (TIW), a voluntary trade reporting repository for OTC credit derivatives, which it says now houses trade information on more than 98% of the global markets’ transactions.
Expanding on the success of the TIW program, DTCC launched repositories for three more derivatives markets in successive years: interest rates, commodities and equities. With the FX and commodities programs on track for launch in October, the company will have completed its global trade repository by the end of 2012.
The decision to launch the repository is in response to both client and regulatory demand, Macbeth said.
We believe in this a lot,” he said. “We are positioning globally, we are positioning cross-product, we think theres a cost and scale benefit to doing that that our customers support. We think regulators get benefit because they get a complete view of data on a timely and accurate basis.
A total of 40 regulatory authorities have access to DTCCs OTC Derivatives Regulators Forum-compliant online portal, Macbeth said. The portal, which publishes daily and weekly reports and allows parameter-based searches for specific trades, has been open since February 2011. From January 1 to April 30 this year, the site had 2,237 report downloads and 3,296 trade-level searches, according to Macbeth.
I think we have led a level of transparency in that credit derivative market with respect to public data, broadly, certainly in an aggregate level on open positions and in terms of turnover,” he said. “And weve also on a more detailed level contributed to some of the liquidity analyses that have been done by regulators and also in the public domain.
DTCCs budding global trade repository is used by 2,650 clients in 79 countries, and maintains records on global transactions worth more than $500 trillion in gross notional value.
The data will be stored simultaneously in three different locations: a server at DTCCs headquarters at 55 Water Street, Manhattan, one in Brooklyn, and one in an undisclosed location, said Macbeth. Data is expected to reach a quantity of 50 terabytes daily by 2014.
Ole Skaar