Swap Reporting Deadlines At Hand

Terry Flanagan

Reporting deadline under the Dodd-Frank Act and Emir will require companies to report their over-the-counter derivatives trades to trade repositories, triggering major upgrades to trading systems.

“The last major compliance date for the DFA rule was April 10, 2013 when all the remaining reporting entities had to start reporting the trades that they have executed but which haven’t already been reported by a U.S. swap dealer,” said Andrew Green, global head of derivative account management, at The Depository Trust and Clearing Corporation (DTCC). “We are still waiting for confirmation of the timeline the SEC will define for its part of DFA.”

For Europe the current dates indicated by ESMA are September 23, 2013 for credit and interest rate derivatives, and January 1, 2014 for FX, equity and commodity derivatives.

DTCC operates a multi-asset class swap data repository (SDR) in the U.S. The SDR, which is operated by DTCC Data Repository (U.S.), or DDR, went live on October 12, the first day of required swap data reporting.

By allowing the financial service industry to partner with regulators to more effectively monitor and mitigate potential systemic risk, the U.S.-based SDR is an important step in implementing the Dodd-Frank Act by achieving these goals and helping to bring greater transparency to the OTC derivatives market, according to the DTCC.

Swaps transactions need to be reported in near real-time, creating technical challenges for the reporting firms and for DDR.

The process of reporting trades in credit and interest rate derivatives to an SDR is scheduled to begin on October 12 for registered entities, however there remains some time for registration for dealers and MSPs [major swap participants].

“Historic trades dating back to the enactment of DFA in July 2010 needed to be reported to a trade repository and our experience in the U.S. is that many dealers chose to pre-seed live positions prior to the mandatory compliance date to make the actual reporting of new records easier once go live has commenced,” Green said.

“We anticipate similar behavior in Europe ahead of the mandatory reporting deadlines,” he said.

Traiana, a provider of post-trade solutions, has launched its Swap Data Repository Service (Harmony TR Connect) for over-the-counter (OTC) derivatives.

Harmony TR Connect provides all market participants with the ability to comply with the trade reporting requirements under the U.S Dodd-Frank framework and EU’s European Market Infrastructure Regulation (Emir), offering a single point of connection for post-trade reporting of foreign exchange, interest-rate and credit default swap trades.

Andrew Coyne, Traiana chief executive

Andrew Coyne, CEO, Traiana

“Traiana continues to work with market participants to understand and deliver the solutions required to meet the global regulations. We are excited to be working with DTCC to deliver standardized and consistent Trade Reporting on behalf of a broad range of financial institutions operating in global OTC derivatives markets,” said Andrew Coyne, CEO of Traiana, in a statement.

Central reporting of OTC transactions is one of the three pillars of derivatives reforms, along with execution and central clearing. The CFTC is one of the first regulatory bodies globally to require mandatory reporting of OTC derivatives trading.

The DTCC created the first global trade repository, for credit derivatives, in 2006, primarily to provide processing efficiencies for the burgeoning OTC market segment. Since 2008, the DTCC has built global trade repository services for OTC derivatives in multiple asset classes.

Traiana has developed Harmony TR Connect to create an industry-standard solution for derivatives trade reporting that will extend the ability to report to the DTCC Global Trade Repositories and other trade repositories to a broader audience under US & EMIR regulations. Electronic platforms and interdealer brokers that will potentially register as SEFs/MTFs/OTFs are working with Traiana to help them fulfill their particular reporting requirements to comply with U.S. and European regulations.

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