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DTCC launches equity derivatives reporting repository

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The Depository Trust & Clearing Corporation has launched its Equity Derivatives Reporting Repository and has received Financial Services Authority approval for the DTCC Derivatives Repository subsidiary. 

The building of the EDRR repository follows a competitive request for proposal process led by the International Swaps and Derivatives Association last year, and represents the industry’s efforts to strengthen its operational infrastructure and improve transparency across all major OTC derivatives asset classes. 

All of the 14 global market dealers are now live on EDRR.

EDRR’s central registry will hold key position data, including product types, notional value, open trade positions, maturity and currency denomination for participants’ transactions, as well as counterparty type.

OTC equity derivatives products the service will initially support include options; equity, dividend, variance and portfolio swaps; contracts for difference; accumulators; and a final category covering other structured products.

By aggregating and maintaining the data, DTCC’s EDRR will generate reports that keep industry participants and regulators up to date on the industry’s outstanding notional and positions as well as other position related information. 

"DTCC played an important role in bringing this new service to market over an aggressive timeframe, allowing the OTC derivatives community to meet commitments made to global regulators to have a repository service running for equity derivatives by the end of July," says Patrick Dempsey, managing director and chief financial officer, global equity derivatives group at J.P. Morgan and chairman of the International Swaps and Derivatives Association’s equities steering committee, EDRR subgroup. 

In addition, DTCC’s new European subsidiary, DTCC Derivatives Repository, has received UK FSA approval to operate as an FSA regulated service company. This new subsidiary will jointly house the global equity derivatives repository and will maintain global credit default swap data identical to that maintained in its New York-based Trade Information Warehouse. The move is, in part, intended to help ensure that regulators have secure and unfettered access to global data on credit default swaps by establishing identical CDS data sets on two different continents.

DTCC also operates the global repository for credit default swaps through its US regulated subsidiary Warehouse Trust Company.  An identical set of this global CDS data will now be maintained in the London-based DTCC Derivatives Repository. 

“It is very common for counterparties to be located on different continents and to trade on underlying securities issued across borders,” says Stewart Macbeth, managing director and general manager, Trade Information Warehouse. “We felt that steps needed to be taken to ensure that the data is always available to regulators globally regardless of events and circumstances taking place in one location or another.”

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