Trading Centers Link Up

Terry Flanagan

The financial world continues to shrink as regulations and automated trading link together far-flung corners of the globe.

2013 is a pivotal year in the global regulatory roadmap, with new trading rules affecting all organizations in all jurisdictions. Under the Dodd-Frank Wall Street Reform and Consumer Act organizations trading certain types of OTC derivative instruments must report their transactions to regulated trade repositories.

Cleartrade Exchange (CLTX), a derivatives trading venue, has established an electronic connection to the Swap Data Repository owned by The Depository Trust & Clearing Corporation (DTCC), through which derivatives contracts traded through CLTX can be automatically reported to the DTCC in real-time, allowing members of the exchange to comply with trade reporting requirements from the Commodity Futures Trading Commission.

“Cleartrade Exchange’s connection to the DTCC continues to demonstrate our commitment to providing services which enable our members to navigate the changing waters of global regulation smoothly,” said Richard Heath, head of product at Cleartrade Exchange. “The timing of this connection is important as it allows members to submit trades in line with the CFTC deadlines.”

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.

Separately, Thomson Reuters has launched managed services in Australia and China to provide international and domestic financial institutions with cost-effective access to its real-time market data infrastructure and content.

Elektron Managed Services will be deployed in co-location with the Australian Securities Exchange (ASX) in Sydney as well as through a key financial services data-center facility in Shanghai to respond to market needs for increasingly sophisticated trading strategies and risk management solutions in local as well as international markets.

“Elektron Managed Services gives us the ability to rapidly scale our businesses and access a broad universe of data and services while lowering the typical costs of deploying and managing equivalent solutions in-house,” said Qu Hongjie, executive director of China equities and head of China electronic trading at UBS Securities.

In addition to the electronic connection to the DTCC, Cleartrade Exchange also delivers its own Trade Hub, which provides a resource directly accessible by the exchange members and clients of its broker members, containing records of all historical trades processed through platforms provided by CLTX.

“The CLTX Trade Hub is an important tool for organizations which need to report historical positions, whether they have been trading directly with the exchange or through our broker members,” Heath said. “These organizations are able to export a full record of their trades from the hub for easy onward submission.”

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