The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, is encouraging institutions to act ahead of the third phase of derivatives reporting requirements to be implemented by Australian Securities & Investments Commission (ASIC) next month.
DTCC’s Global Trade Repository (GTR) service, operating as the DTCC Data Repository (Singapore) Pte Ltd, is the only holder of an Australian Trade Repository Licence, according to Peter Tierney, Regional Head of DTCC’s GTR business for Asia-Pacific. Today, 18 of Australia’s leading financial market participants are already using the service for ASIC-reportable open OTC positions across 5 asset classes, with a total gross notional of AUD24.6 trillion. [1]
Beginning April 13, 2015, institutions with gross notional outstanding in reportable over-the-counter (OTC) positions between A$5bn and A$50bn (“3A” entities) are required to report trades to the DTCC trade repository. On October 12, 2015, this requirement will be extended to entities holding less than A$5bn (“3B” entities) as well as apply to additional asset classes, including equity, FX and commodities.
“A rigorous process underpins trade repository on-boarding, so we encourage any institutions who may qualify as 3A to opt in to the GTR service immediately,” Mr. Tierney said. “We similarly urge 3B entities to act well ahead of their respective October deadline.”
Mr. Tierney added that DTCC infrastructure and support is firmly in place to help with the next phases of derivatives reform, including the Sydney appointment of Oliver Williams as DTCC’s GTR Business Manager. Mr. Williams will oversee GTR on-boarding and regulatory collaboration.
“Oliver brings over 15 years of financial services experience and a deep knowledge of pre- and post-trade market segments across all asset classes to his new role at DTCC. He is well positioned to manage the initiative in Australia while helping to drive data quality and programs that lead to meaningful visibility into derivatives transactions, a key G20 objective.”
In addition to working with regulators around the next phases of trade reporting mandates, DTCC has partnered closely with market participants and industry bodies in Australia to encourage early opt-in to the trade repository to prevent risk of non-compliance.
“The majority of institutions are prepared for reporting requirements. We do expect a smooth transition to phase three, however it is important that first-time reporters allow maximum time for trade repository on-boarding, connectivity and testing,” he said.
Mr. Tierney added that in addition to greater visibility of OTC derivatives achieved by regulators, the Straight-Through Processing (STP) flow of data from confirmation platforms to the trade repository should enhance the quality of data.
“A positive consequence of trade reporting rules is that data quality is improved upstream, leaving the reporting element as a natural extension of an efficient post trade workflow.”
[1] ASIC public data - http://www.dtcc.com/repository-otc-data/asic-reports.aspx
