Thursday, December 3, 2009

The Case for a Single Trade Repository for Each Asset Class of OTC Derivatives Contracts

DTCC believes that all derivatives traded by global financial institutions should be reported to a single trade repository for each asset class, which would serve regulators as a comprehensive source of information. From a public policy perspective and in the interests of ensuring the stability and transparency of financial markets, there must be a consolidated, comprehensive single entity that collects and maintains the underlying position data and makes it available to regulators in the most efficient, timely and usable manner.

DTCC has publicly stated that it will support all efforts to create central counterparty (CCP) services planned in the U.S. and overseas on a non-discriminatory basis. When both the CCP and repository work in tandem to support each others functions, risk can be significantly mitigated -- and transparency enhanced in the marketplace.

DTCC supports the goal of transparency and believes repository data should be shared with regulators in the U.S. and overseas. DTCC also supports the efforts of the OTC Derivatives Regulators' Forum, a group of international regulators who announced plans to develop a global framework for regulatory cooperation and to share ideas and information on CCPs and trade repositories serving the OTC derivatives market.

Graphical Illustrations
Current Situation in Global CDS Markets.
Fragmentation of Data in an OTC Derivatives Marketplace with Multiple Repositories.

DTCC's Activities in Brussels

Testimony Before Senate Committee on Agriculture, Nutrition, and Forestry, December 2, 2009

Peter Axilrod, managing director of the Depository Trust & Clearing Corporation (DTCC) and former manager of Risk Management at the firm shares the views of DTCC for the consideration of legislation to address over-the-counter derivatives markets to mitigate systemic risk.

Full text of testimony.

DTCC's Activities in the U.S.

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