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: Valuations for High-Yield Bonds

This webinar has passed, but you can view the recording here. MAKE DECISIONS WITH CONFIDENCE Financial services firms need access to accurate,transparent and complete data in order to meet complex business demands. Bloomberg understands these challenges, and is committed to providing innovative enterprise solutions and expert service. Bloomberg’s Cynthia Sachs and Varun Pawar, Head of...

BLOG

Providers of SFDR Reporting Solutions

Europe’s ESG regulatory space is dominated by the Sustainable Finance Disclosure Regulation, which requires listed companies in the bloc to declare the sustainability credentials of the funds they manufacture and the assets in which invest. Its intention is to give investors and advisers a clearer understanding of how sustainable investments are. Compliance requires the reporting...

EVENT

Data Management Summit London

Now in its 16th year, the Data Management Summit (DMS) in London brings together the European capital markets enterprise data management community, to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

Trading Regulations Handbook 2021

In these unprecedented times, a carefully crafted trading infrastructure is crucial for capital markets participants. Yet, the impact of trading regulations on infrastructure can be difficult to manage. The Trading Regulations Handbook 2021 can help. It provides all the essentials you need to know about regulations impacting trading operations, data and technology. A-Team Group’s Trading...