The Depository Trust & Clearing Corporation’s (DTCC) Global Trade Repository is to expand its operations into Singapore by establishing an Asian-based global data centre to ensure regulators have seamless access to data for systemic risk mitigation in over-the-counter (OTC) derivatives markets.
“We are dedicated to helping clients and regulators globally establish a strong operational infrastructure that brings greater transparency and risk mitigation to the OTC derivatives market,” says Michael Bodson (pictured), President and Chief Executive Officer-elect of DTCC. “Our global trade repository services have played an important role in providing the public and supervisory authorities worldwide with a complete view of the market participants’ risk exposures to OTC derivatives transactions and a clearer picture on the size and scope of this complex market.”
The data centre will be DTCC’s first in Asia and part of the worldwide network in the US, Asia and Europe that collects and stores global OTC derivatives information to bring transparency to the market. The new Singapore data centre will be a key component of the Global Trade Repository’s comprehensive business continuity planning and strategy to ensure that the Global Trade Repository can provide regulators around the world with timely and equal access to transaction information. In addition, the data centre will support market participants in meeting current and future regulatory requirements as supervisors worldwide finalize new rules that will require the reporting of all derivatives and other OTC transactions to trade repositories.
A new European data centre, which is located in the Netherlands, was recently established to support the Global Trade Repository. The data centre in Singapore is expected to be completed and begin initial operations late in the second half of 2012. DTCC also intends to register the Global Trade Repository in Singapore for all five asset classes and will be working closely with Singapore, all regional regulators, as well as industry to gain further acceptance for the Global Trade Repository as DTCC expands its operations into Asia.
“Locating a data centre in Singapore is an important next step in our global expansion and is a reflection of our commitment to enabling DTCC to deliver a robust global network, comprehensive business continuity, and true 24-hour client service,” says Stewart Macbeth, President and CEO of DTCC’s Deriv/SERV LLC subsidiary. “This is becoming even more crucial given Asia’s prominence as a critical component of the global capital markets.”
DTCC was awarded competitive contracts by the global OTC derivatives industry to build repositories to report information to regulators on OTC credit, equity, interest rates, commodities and foreign exchange derivatives transactions across the globe. The global repositories for credit, equity, interest rates and commodity derivatives are currently operational, while the repository for foreign exchange derivatives is expected to be operational later this year.
DTCC developed the first trade repository in the world for OTC credit derivatives, initially called the Trade Information Warehouse (TIW). TIW now houses trade information on more than 98% of all the OTC credit derivatives globally. DTCC then subsequently received industry approval, following a competitive process, to develop global trade repository services for equity, interest rate, commodity (with the European Federation of Energy Traders) and foreign exchange (with SWIFT) OTC markets.
As part of its support for the markets, DTCC also developed a separate, web-based regulatory portal that permits regulatory agencies from around the world, based on voluntary reporting agreements and supervisory authority entitlements, to obtain near real-time information on credit derivatives trading. That portal was later expanded to include OTC equity derivatives and interest rate derivatives, and will also be used for commodities and foreign exchange trading reporting. Some 40 regulatory agencies globally currently use the portal for derivatives monitoring.