Super repository not the answer to effective tracking of derivative segments
Harmonisation of global trade reporting rules should precede the idea of a single global trade repository. November 28, 2013 | Mobasher KazmiThe global financial crisis of 2008 has fundamentally re-ordered the regulatory landscape governing OTC derivatives market. While multiple factors can be attributed to having led to the breakdown in credit markets and subsequent economic slowdown, the opaque nature of derivative transactions has been found primarily culpable. The leadership of G-20 countries meeting at a special summit in Pittsburgh, 2009 pledged to prevent a recurrence of the crisis through a series of initiatives one of which included the reporting of all OTC transactions to trade repositories (TRs). Logically, this raises the question whether introducing a super-repository positioned above local jurisdictions and connecting key market participants would be a workable proposition in Asia. I believe this may be unnecessary and unwise as existing operators are ready and willing to offer such services. Consider the US-based Depository Trust & Clearing Company (DTCC), which is positioning itself to serve as the benchmark ‘golden copy’ provider in Asia by leveraging its vast warehouse infrastructure capabilities. It seeks to achieve this through its global trade repository (GTR) service already in operation in Australia, Japan and Singapore with a Hong Kong launch due by December 9th, 2013. A critical goal in accomplishing its wider strategic objectives for the region though would be to initially meet the regulators trade reporting requirements in these four main territories on a consistent basis. The DTCC would add more value to its key stakeholders, comprising banks and dealers, if it continues to increase the number of jurisdictions it is servicing so as to accrue advantages of economies of scale. Working with local repositories in the region should also be a priority to facilitate intra-regional coordination and cooperation in trade reporting. The litmus test for DTCC as stated by Peter Tierney, DDRS CEO and regional head for DTCC's trade reporting initiatives in Asia, “i... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Markets & Exchanges, Risk & Compliance, Trading & DataMarkets Exchanges,Risk & Compliance,Trading & Data, Markets & Exchanges,Risk & Compliance,Trading & Data, Keywords:Trade Repositories, OTC Derivatives, Peter Tierney, Conrad Voldstad, ISDA, DTCC, CFTC, ESMA, CPCC, IOSCO Trade Repositories, OTC Derivatives, Peter Tierney, Conrad Voldstad, ISDA, DTCC, CFTC, ESMA, CPCC, IOSCO
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