18 October 2017
visit www.response.ncr.com

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

09 October 2009  |  6788 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  |  7731 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  |  6764 views  |  0 comments
CESR calls for EU-based derivatives information repository

CESR calls for EU-based derivatives information repository

27 February 2009  |  8199 views  |  0 comments
DTCC launches Trade Information Warehouse for OTC derivatives processing

DTCC launches Trade Information Warehouse for OTC derivatives processing

15 November 2006  |  7871 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.capgemini.comRegister nowvisit www.innotribe.com

Top topics

Most viewed Most shared
Ripple looks to drive bank adoption with $300m XRP rebate programmeRipple looks to drive bank adoption with $...
15130 views comments | 12 tweets | 4 linkedin
Swift positive on blockchain, but big challenges remainSwift positive on blockchain, but big chal...
8349 views comments | 15 tweets | 21 linkedin
hands typing furiouslyHow artificial intelligence can deliver a...
7848 views 0 | 7 tweets | 9 linkedin
satelliteGates Foundation backs Ripple collaboratio...
7262 views comments | 13 tweets | 8 linkedin
IBM uses blockchain to improve cross-border payments processingIBM uses blockchain to improve cross-borde...
6425 views comments | 8 tweets | 16 linkedin

Featured job

Competitive
New York, NY - USA (some flexibility on location)

Find your next job