The Depository Trust & Clearing Corporation (DTCC) has gained regulatory approval from the US watchdog to offer security-based data reporting services in the US ahead of new swaps reporting rules.
Following the approval from the Securities and Exchange Commission (SEC), DTCC is the first security-based swap data repository (SBSSDR) in the US that can accept transaction reports as part of Security-based Swap Reporting (SBSR) requirements.
The Dodd-Frank Act in the US divided the regulatory oversight of derivatives between the SEC for security-based swaps and the Commodity Futures Trading Commission (CFTC) for all other swaps.
Under the new reporting regime, firms will be required to report swap transactions that reference a single security or loan, or credit default swaps that reference a narrow-based index, to the SEC via data repositories such as the approved DTCC Data Repository (DDR).
“A centralised database of security-based swap transactions is an essential reform to better understanding these markets, for surveillance and for enforcement. The data repository also will facilitate public reporting of security-based swap transactions, bringing much-needed transparency to these markets,” said SEC chair Gary Gensler.
Market participants are required to be compliant with the new service from 8 November.
SBSR was due to come into force in the US in 2015 but was never fully implemented. In December 2019, the SEC confirmed it had adopted the regime and provided a new timeline for compliance.
“This marks an important step forward in continuing to provide greater transparency in the OTC derivatives market,” added Kate Delp, executive director at DTCC and general manager of DDR.
“We are proud to extend our trade reporting capabilities in the US and are committed to working with our clients to help them prepare for the reporting date. Now is the time to begin to implement and test trade reporting solutions as the reporting compliance date draws near.”
DDR, which falls under the umbrella of DTCC’s Global Trade Repository (GTR), will act as a registered SBSDR for transactions across equities, credit and interest rate derivatives asset classes.
Gensler who was appointed chair of the SEC in January earlier this year, had his appointment officially approved by the US Senate last month.