DTCC Plans Swaps Data Alignment Effort

The Depository Trust & Clearing Corporation (DTCC) is taking action to align swaps data in its repositories and deliver analysis based on those alignments, according to Marisol Collazo, a managing director at DTCC.

DTCC intends to provide the resulting analysis to the Committee on Payments and Market Infrastructures (CPMI), a unit of the International Organization of Securities Commissions (IOSCO) and also a member of the Financial Stability Board (FSB). CPMI promotes efficiency of payments, clearing and settlement, and works with the FSB to coordinate and promote regulatory and supervisory policies for the financial industry.

Providing analysis of the alignment of swaps data is intended to "create momentum around what we need on greater alignment on the global front," says Collazo. The results should also send a signal to regulators, she adds.

"It's really saying, if it's 20 fields that are globally important, for those same 20 fields, the regulators should adopt the global definition and support the validation," says Collazo. "That would be a significant step toward improving the data quality and focusing the priorities on the systemic risk goal outlined by the G20 countries [in their 2009 meeting in Pittsburgh]."

Regulators should put forward a global standard for trade identification, akin to transaction IDs that "resonate" in all jurisdictions, according to Collazo. Data quality should be defined across firms, trade repositories and regulators, and CPMI's efforts with data aggregation are encouraging, she adds.

DTCC's plans are also partly a response to differences between US Commodity Futures Trading Commission (CFTC) requirements for swaps reporting and European Securities and Markets Authority (ESMA) requirements for the same kind securities, Collazo explains.

"The CFTC has a single-sided reporting model, meaning it's the execution clearing houses, swap dealers and major swap participants who are doing the reporting," she says. "Under ESMA, everyone has to report. Both sides are reporting and it's really bringing additional burdens to buy-side firms to perform that reporting. That has broadened the scope and scale when comparing CFTC and ESMA requirements."