Part Three: On the path to global regulatory harmonisation in trade reporting

Continued from Part Two on July 15

DTCC provides trade reporting services through its licensed trade repositories in 22 jurisdictions, servicing approximately 8,500 clients.

“We're one of the few institutions that has a global perspective, in as much as we provide trade repository services in all of the large jurisdictions, so that gives us a uniquely broad view on these issues. Since day one, we've been highlighting, through thought leadership pieces, panels, working groups and providing comments back to regulatory proposals and consultation papers, where there are differences between jurisdictions that create issues for the whole trade reporting ecosystem.”

He added: “It's highly unlikely we'll ever get to a truly single global implementation of trade reporting, so our approach is to continue to point out those areas that are more problematic than others.”

The world’s major economies are only now emerging from the worst of the COVID-19 pandemic and DTCC, its clients and the rest of the financial services industry are still adjusting to new ways of working.

Childs said the pragmatism shown by some regulators in response to the pandemic was welcome and the industry would like to see this attitude continue in future.

“An example of that was the European launch SFTR where ESMA agreed to push back the go-live date by three months due to the pandemic. If other unexpected events occur in the future that could make meeting compliance deadlines problematic for the industry, hopefully, that pragmatic approach will continue.”

Childs said DTCC is looking at its services more broadly as its clients return to a more normal environment.

“In terms of DTCC services, we have been thinking more holistically about the trade reporting mechanisms from start to finish, not just running a trade repository. Where does the data come from within the firms? How do they report? How do they deal with multiple jurisdictions? And then after they've reported, how do they reconcile the data back to their own books and records to make sure the information that they've provided to the regulators is accurate? The answers to these questions drove us to look at the whole pre and post reporting space and provide additional services to our clients to help ease the burden of trade reporting.”

According to Childs, DTCC launched the DTCC Report Hub® service, a highly efficient solution for pre and post trade reporting that can help firms manage the complexities of meeting multiple regulatory mandates across jurisdictions. The service offers comprehensive jurisdiction, regulation, and mandate coverage, and can help firms mitigate compliance risks, enhance operational efficiencies, and drive down costs.

He explains that DTCC Report Hub®’s “robust functionality and flexible integration provides firms with access to a wide range of pre and post trade reporting capabilities, including  pre reporting data normalization and exception management, assessment of reporting eligibility, automated reconciliation, and compliance analytics creation. The service also interfaces with registered trade repositories [TRs] and approved reporting mechanisms [ARMs] to facilitate trade submission and approved publication arrangements [APAs].

In terms of the trade repositories, he added: “The focus is going to be on readying our systems for the rewrites  and with these enhancements we’ll introduce a simplified and consistent client experience, for example, with respect to how clients access their data and the portal.

For firms who need guidance on readying for the swathe of regulatory changes, we recently launched DTCC Consulting Services, which helps clients with challenges related to trade reporting and control frameworks, and assists them with their reporting infrastructure set up to facilitate successful compliance, especially given the swathe of regulatory changes in the global derivatives landscape rolling out over the next couple of years.”

The continuing evolution of derivatives reporting following the financial crisis of 2008 into the current stream of refreshed regulations looks likely to keep DTCC and its clients busy for years to come.