Swiss Exchange to Create Trade Repository for Derivatives

SIX, Switzerland’s market structure provider, is working with a group of Swiss banks to create a central trade repository (TR) for derivatives transactions.
By Editorial
SIX, Switzerland’s market structure provider, is working with a group of Swiss banks to create a central trade repository (TR) for derivatives transactions.

The planned creation of the trade repository follows international political and regulatory moves to increase transparency in OTC derivatives trading in the wake of the financial crisis.

The Swiss Financial Market Infrastructure Act (FMIA), which is currently in consultation and is set to enter into force in 2015 or 2016, will be the legal framework for the creation of the repository.

The FMIA is the Swiss response to the G20’s decision at its 2009 Pittsburgh Summit to reform OTC derivatives markets. The initiative aims to bring transparency to these markets and improve risk management practices to protect financial stability. And in the EU, the European Market Infrastructure Regulation (EMIR), introduced central reporting and clearing of OTC derivatives.

At the end of 2013, six trade repositories were registered under EMIR: ICE Trade Vault Europe; CME Trade Repository; UnaVista, owned by the London Stock Exchange; Regis-TR, a joint venture between Iberclear and Clearstream; Poland’s Krajowy Depozyt Papierów Wartosciowych and DTCC Derivatives Repository.

Mandatory trade reporting of the data on the six TRs did not start until February 12 this year. Both the buy and sell side were obliged to report OTC and listed derivatives to the TRs. Some aspects of the reporting requirements were not clear and the European Securities and Markets Authority added extra guidelines just the day before reporting began.

The trade repository provided by SIX will record the details of derivative transactions that must be reported by banks and other counterparties.

Following validation and a consistency check, the information collected will be passed on to the supervisory authorities.

The data will also be made public, but in a form which protects the anonymity of businesses involved.

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