DTCC extends trade repository reporting in Australia and Singapore
29 April 2014 | 2760 views | 0
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, extended its Global Trade Repository (GTR) service to enable a broader range of market participants to meet new Phase 2 reporting requirements for over-the-counter (OTC) derivatives transactions, as mandated by the Australian Securities & Investments Commission (ASIC).
Ten of Australia's leading broker/dealers have signed on to leverage the service.
Under rules established by ASIC in July 2013, certain financial institutions were required to begin reporting their trading activity to a trade repository as of April 1, 2014 (Phase 2). These rules apply to Australian Authorised Deposit-taking Institutions (ADIs), Foreign ADIs, Australian Financial Services (AFS) licensees, Clearing and Settlement (CS) facility licensees and exempt foreign licensees, in each case with total gross notional outstanding positions of Australian $50 billion or more as of December 31, 2013.
"The April 1 deadline marks an important step in creating greater transparency and risk mitigation in the OTC derivatives market in Australia and globally," said Peter Tierney, Regional Head of Asia-Pacific at DTCC. "DTCC will continue to engage market participants in Australia and ASIC to advance an effective and comprehensive derivatives reporting structure."
"Trade repositories bring heightened transparency to the derivatives market," said Laurence White, Senior Manager, OTC Derivatives Reform at ASIC, "affording regulators the potential to assess risk exposures in the market in a more effective and comprehensive manner."
DTCC's Global Trade Repository (GTR), which operates through regulated entities located in several countries, is the only repository in the world that supports regulatory reporting in the Asia-Pacific region for all five major OTC derivatives asset classes, including credit, interest rates, equities, FX and commodities. The GTR also supports reporting regimes in the U.S. for the Commodity Futures Trading Commission (CFTC), in Europe for the European Securities and Markets Authority (ESMA), in Japan for the Financial Services Agency of Japan (JFSA) and in Singapore for the Monetary Authority of Singapore (MAS).
"By reducing risk and providing greater clarity, trade repositories play a critical role in the OTC derivatives marketplace," saace," said Brendan Byrne from Suncorp Bank's OTC Reform Team. "Engaging with DTCC not only allows Suncorp to meet mandates in Australia and globally, it also provides an effective and efficient tool for our regulators to assess risk exposures in the market place."
Phase 1 of Australia's trade reporting regime for OTC derivatives commenced in October 2013 with Australian financial institutions registered as swap dealers with the CFTC required to begin reporting their OTC derivative transactions.
The next reporting deadline is October 1, 2014 (Phase 3), where remaining reporting entities that were not required to report in Phase 1 or Phase 2 will start reporting interest rate and credit derivatives, with other derivatives starting to be reported 6 months later.
Separately, the DTCC st-trade market infrastructure for the global financial services industry, today announced the continued expansion of its Global Trade Repository (GTR) service in Asia, with all banks licensed in Singapore and merchant banks approved by the Monetary Authority of Singapore (MAS) now required to report their over-the-counter (OTC) credit and interest rate derivatives transactions to a licensed trade repository as of the April 1, 2014 deadline. Over 50 of Singapore's leading licensed banks and broker/dealers have signed on to leverage the service.
DTCC's GTR, which operates through regulated entities located in several countries, is the only global solution that supports regulatory reporting in the Asia-Pacific region for all five major OTC derivatives asset classes including credit, interest rates, equities, FX and commodities. Today, DTCC supports reporting regimes in the U.S. for the Commodity Futures Trading Commission (CFTC), in Europe for the European Securities and Markets Authority (ESMA), in Japan for the Financial Services Agency of Japan (JFSA) and in Australia for the Australian Securities and Investments Commission (ASIC).
"DTCC is committed to working with MAS and market participants to promote an effective and comprehensive reporting scheme in Singapore and the Asia-Pacific region," said Peter Tierney, Regional Head of Asia at DTCC. "With this major milestone, the industry has taken an important step forward in meeting regulators' objectives for greater transparency and risk mitigation in the OTC derivatives market in Singapore and globally."
DTCC's Singapore entity received approval from MAS to operate GTR on November 1, 2013 at which point the firm began on-boarding licensed banks and merchant banks approved by MAS subject to reporting requirements in Singapore. While Singapore's trade reporting regime for OTC derivatives commenced on October 31, 2013 for OTC credit and interest rate derivatives, market participants will only be required to start reporting from their applicable reporting commencement dates, as set out below:
Feb 3, 2014 - 19 firms who signed the ISDA commitment letter.
April 1, 2014 - All banks licensed in Singapore or merchant banks approved by MAS.
July1, 2014 - All trustees and fund managers and other capital market service license holders, registered insurers, finance companies as well as subsidiaries of banks incorporated in Singapore.
October 1, 2014 - All significant derivatives holders .
The reporting mandate for remaining asset classes, including equity, commodity and FX derivatives, will be introduced at a later phase.
"Having a seamless, efficient process in place for reporting OTC derivatives transactions is a critical component in ANZ Banking Group's ability to comply with regulatory mandates in Singapore and other jurisdictions across the globe," said Gregory Haynes, Director OTC Reform at ANZ Banking Group. "Trade repositories have helped to bring greater clarity and understanding on the size and scope of the OTC derivatives market to the industry, while providing regulatory authorities with an effective tool for assessing risk exposures in the market place."