18 December 2017
visit www.ebaday.com

DTCC calls on lawmakers to mandate use of central trade reporting utility

09 October 2009  |  6816 views  |  0 Financial numbers

The Depository Trust and Clearing Corporation has called for legislative changes mandating the use of a trade repository for over-the-counter (OTC) credit derivatives contracts in testimony submitted to the House Financial Services Committee.

In the testimony, DTCC general counsel Larry Thompson warned that current legislative proposals - which require only those trades that are not cleared through a central counterparty (CCP) to be reported to a repository - could undermine the goals of re-regulation and represent a step backward by reducing the level of transparency that now exists in the marketplace.

"We are concerned that the legislative proposals under consideration would have the effect of denying regulators the opportunity to see systemic risk from a central vantage point because it would fragment the existing information on CDS contracts stored in the repository," Thompson said. "We strongly recommend that the draft legislation before the House be revised to ensure that all credit default swap trades, regardless of whether they are cleared or not, be reported to a single swap repository, which exists to provide regulators and the public with the consolidated information they need during normal times, and, especially, at times of crisis."

DTCC's Trade Information Warehouse currently connects and services 1400 global dealers, asset managers, and other market participants.

Thomson believes the proposed rule changes would discourage use of the warehouse as participants assume that once a trade guarantee is provided through a central counterparty, there would be less need for a central registry to track the underlying position data.

"We reject this view, based on our long experience managing the risk flowing from the failure of a single member firm," he says. "At the critical juncture of a firm failure, knowing the underlying position data of multiple transactions in a timely manner will be significant in providing transparency to regulators-and in protecting confidence in the market itself. We believe the role of having a central repository should be reinforced as a matter of public policy."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

DTCC names Lehman veteran Bridget O'Connor CTO

DTCC names Lehman veteran Bridget O'Connor CTO

01 September 2009  |  7779 views  |  0 comments
Markit and DTCC derivatives trade processing JV set for September launch

Markit and DTCC derivatives trade processing JV set for September launch

11 August 2009  |  6801 views  |  0 comments
CESR calls for EU-based derivatives information repository

CESR calls for EU-based derivatives information repository

27 February 2009  |  8262 views  |  0 comments
DTCC launches Trade Information Warehouse for OTC derivatives processing

DTCC launches Trade Information Warehouse for OTC derivatives processing

15 November 2006  |  7899 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit http://cib.db.comvisit www.ebaday.comvisit www.aciworldwide.com

Top topics

Most viewed Most shared
satelliteRipple completes XRP Lockup
11316 views comments | 3 tweets | 4 linkedin
Banks tap Ethereum smart contracts for MiFID II complianceBanks tap Ethereum smart contracts for MiF...
10393 views comments | 21 tweets | 26 linkedin
Banks and fintech startups join forces on blockchain-based supply chain pilotBanks and fintech startups join forces on...
7824 views comments | 19 tweets | 22 linkedin
Digital banking startup Loot secures £2.2 million seed roundDigital banking startup Loot secures £...
7585 views comments | 5 tweets | 11 linkedin
Nordea takes Open APIs into live productionNordea takes Open APIs into live productio...
7483 views comments | 6 tweets | 26 linkedin

Featured job

Competitive base, commission, benefits
London, UK

Find your next job