ASIC Mandate Necessitates DTCC Extension of Trade Reporting Service

The Depository Trust & Clearing Corporation (DTCC), one of the financial industry’s marquee post-trade market entities, has launched an extended Global Trade Repository (GTR) service to market participants in compliance with revamped Phase 2 reporting requirements for over-the-counter (OTC) derivatives and transactions, according to a DTCC statement.

The recent alteration in reporting requirements has been necessitated by the Australian Securities & Investments Commission (ASIC), the region’s paramount regulatory authority for financial instruments. Initially, the mandate will target strictly OTC derivatives, though provisions are being made for the expansion into all asset classes, including FX, equities and commodities. Indeed, ASIC has been particularly busy as of late, highlighted by an investigation into forex manipulation that has extended to Australia.

ASIC Makes Bid for Increased Transparency for Asset Classes

According to Peter Tierney, Regional Head of Asia-Pacific at DTCC in a recent statement on the extension, "The April 1 deadline marks an important step in creating greater transparency and risk mitigation in the OTC derivatives market in Australia and globally. DTCC will continue to engage market participants in Australia and ASIC to advance an effective and comprehensive derivatives reporting structure."

As such, the new deal in reporting requirements includes ten of Australia's leading broker and dealers that have signed on to implement the new service. Given that rules were levied by ASIC as recently as July 2013, certain financial institutions are required to begin reporting their trading activity to a trade repository as of April 1, 2014 (known as Phase 2). In terms of focus and jurisdiction, these rules will effectively include Australian Authorized Deposit-taking Institutions (ADIs), Foreign ADIs, Australian Financial Services (AFS) licensees, Clearing and Settlement (CS) facility licensees and exempt foreign licensees, specifically in excess of $46.34B in total gross notional outstanding positions as of December 31, 2013.

Greater Efficiency Measures Serve as Impetus for ASIC Mandate

"Trade repositories bring heightened transparency to the derivatives market, affording regulators the potential to assess risk exposures in the market in a more effective and comprehensive manner,” added Laurence White, Senior Manager, OTC Derivatives Reform at ASIC.

DTCC's Global Trade Repository (GTR) is a multilateral organization that operates across several countries in the Asia-Pacific region. Furthermore, it is the only repository in the world that supports regulatory reporting for each of the five major OTC derivatives asset classes, including credit, interest rates, equities, Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term and commodities. The GTR also operates in accordance with the United States’ Commodity Futures Trading Commission (CFTC) and the European Securities and Markets Authority (ESMA ESMA European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t Read this Term).