Concerns over data as ESMA completes TR registrations

All trade repositories seeking regulatory approval by the European Markets Securities Authority have now been granted a licence, after the regulator registered ICE Trade Vault Europe and the CME Trade Repository this week.

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All trade repositories (TRs) seeking regulatory approval by the European Markets Securities Authority (ESMA) have now been granted a licence, after the regulator registered ICE Trade Vault Europe and the CME Trade Repository this week. 

The Depository Trust and Clearing Corporation (DTCC)’s Derivatives Repository, Poland’s Central Securities Depository of Poland (KDPW), REGIS-TR, a joint venture by Iberclear and Clearstream, and the London Stock Exchange’s UnaVista were given licences under the European market infrastructure regulation (EMIR) earlier this month.

The latest registration brings the total number of TRs set to operate in Europe to six.

David Peniket, managing director of ICE Trade Vault Europe, part of ICE Intercontinental Exchange, said he appreciated ESMA’s detailed application process for trade repositories. “We are pleased to launch this new and essential element of European market infrastructure.”

Market participants will be required to start reporting for all asset classes trades under EMIR on 12 February, 90 working days after the official registration date.

With six trade repositories in the market, there have been concerns about data fragmentation. Earlier this month, at the Mondo Visione Exchange Forum, Daniel Jude, director, client development and sales, asset managers, EMEA, CME Group, highlighted the challenges faced by the US Commodity Futures Trading Commission (CFTC).

The CFTC has been having trouble making sense of the reporting data taken from three TRs in the US, “imagine having six or more trade repositories,” he said. 

Jude, alongside competitor Andrew Douglas, head of government relations, Europe and Asia, at DTCC, agreed competition was good, but not when it came to trade reporting. “As we all know the reconciliation that we will have to do is quite complicated,” Jude said. 

Douglas predicted there would only be four or less TRs in the future, as some would realise the TR business is not what they thought it was.

“We talk about this as a business and I would define a business as a being a profit-making operation. It is very clear from the regulation that it is to operate as an at-cost utility,” he said.

Meanwhile, post-trade processing solutions provider Traiana has launched a Unique Trade Identifier (UTI) management tool, aimed at facilitating the exchange of UTIs between counterparts. 

UTIs are required under EMIR as well, and is one of 85 data fields required for trade reporting to a TR.

Buy-side firms have been concerned over not being able to get the UTI from brokers on time for reporting. Although the International Swaps and Derivatives Association has issued guidelines on the issuance of UTIs, ESMA has not endorsed any UTI framework, and has left it up to buy- and sell-side,  or venue operators to assign the identifier.

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