About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

DTCC ‘Golden Copy’ Repository is Good News for Credit Markets

Subscribe to our newsletter

News that the Depository Trust & Clearing Corp. plans to build a central repository for holding so-called golden copies of trade details for the OTC derivatives marketplace – and in particular for credit derivatives – will be welcomed by industry participants.

Certainly, the credit derivatives marketplace has been crying out for help in getting its operational house in order. Such is the situation that the U.S. Federal Reserve has on several occasions called in the market’s major bank players to express its dismay and concern over the unacceptably high rate of settlement failures for credit derivatives trades.

Meanwhile, European players in particular will be encouraged by the DTCC’s willingness to step up. Lacking a central facility that acts like the DTCC does for the U.S. marketplace, European market participants worry about how they will meet the requirements of the forthcoming MiFID regulation, particularly as it strives to create a level playing field as far as transaction costs are concerned.

Finally, the addition of the DTCC credit derivatives repository – and plans to extend to other markets – will provide some much-needed relief for credit markets players for whom access to reliable descriptive information relating to many aspects of their activities continues to rely on a multitude of overlapping suppliers, with no standard approach in sight.  

The DTCC’s central industry trade information warehouse and support infrastructure has the aim of automating and centralizing ‘downstream’ processing over the life of an over-the-counter (OTC) derivatives contract. According to DTCC, “the solution will consist of a central trade information warehouse for credit derivatives – essentially a comprehensive database containing the ‘golden copy’ of each trade – and a central support infrastructure that standardizes and automates ‘downstream’ processes throughout the life of each contract.”

The first release of the repository is scheduled for mid-year. Within that release, the DTCC aims to offer ‘downstream’ processing support offering the ‘current state’ of each contract (after taking into account full and partial assignments, terminations, and so on), as well as calculating and bilaterally netting the cash flows associated with each contract. Further releases, anticipated for later this year, will add extensions covering other OTC derivatives. DTCC has been working closely with 11 leading global dealers to develop the overall concept and detailed design to deliver this industry infrastructure solution. The DTCC already operates a centralized trade confirmation environment for OTC derivatives, based on its Deriv/SERV platform, that brings together both dealers and buy-side institutions. The trade data repository project, to be overseen by a Senior Operations Group set up by the DTCC’s OTC Derivatives Operations and Planning Committee, is being designed to eventually accommodate other OTC derivatives, including rates, equities, foreign exchange and commodities derivatives.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Managing Entity Data for MiFID II Compliance: No LEI, No Trade

MiFID II’s “No LEI, No Trade” requirement mandates all entities trading with European counterparties across all asset classes need to obtain legal entity identifiers (LEIs). This represents a major shift in the way LEIs are used for regulatory reporting and firms that are affected by MiFID II should obtain the relevant LEIs sooner rather than...

BLOG

Regulations in the Balance as Institutions Remain Sustainability-Focussed: ESG Summit London Review

Despite a perception that ESG is in retreat around the world, financial institutions continue to take the issue very seriously as a matter of risk management, a trend that continues to exert an influence on the data demands of organisations. It isn’t even the compliance imperatives of organisations operating in heavily regulated parts of the...

EVENT

TradingTech Briefing New York

Our TradingTech Briefing in New York is aimed at senior-level decision makers in trading technology, electronic execution, trading architecture and offers a day packed with insight from practitioners and from innovative suppliers happy to share their experiences in dealing with the enterprise challenges facing our marketplace.

GUIDE

Entity Data Management Handbook – Seventh Edition

Sourcing entity data and ensuring efficient and effective entity data management is a challenge for many financial institutions as volumes of data rise, more regulations require entity data in reporting, and the fight again financial crime is escalated by bad actors using increasingly sophisticated techniques to attack processes and systems. That said, based on best...