DTCC Trade Repository Receives Swiss Green Light

The Depository Trust and Clearing Corp. (DTCC) has received authorization by the Swiss Financial Markets Supervisory Authority (finma) to provide derivatives trade reporting services to the Swiss Markets and will begin accepting reports in two weeks. 

DTCC’s Global Trade Repository (GTR) service, based in Europe, is now recognized as a Foreign Trade Repository in Switzerland and licensed to support over-the-counter (OTC) reporting under the Swiss Financial Markets Infrastructure Act (FMIA), otherwise known as Finfrag. Implemented in early 2016, the regulation aligns with international derivatives reporting standards including the European Markets Infrastructure Regulation (EMIR), requiring counterparty firms domiciled in Switzerland to report OTC trades to a registered trade repository.

Val Wotton, managing director of product development, strategy, derivatives and collateral management at DTCC explains that the application process took over a year to complete, taking longer than its originally anticipated Q3 2018 go-live date. 

“From our perspective, it’s been a process of just over 12 months of submitting the application and also having to go through a very robust process of responding to questions from the authorities, from Finma and also making the European Securities and Markets Authorities (Esma) aware,” adds Wotton.

Wotton further explains that the DTCC’s re-platforming initiative of its GTR in Europe, which completed in October 2017 enabled the firm to more easily broaden its jurisdictional coverage for reporting services. 

DTCC will currently operate its Foreign Trade Repository services for the Swiss markets out of its UK repository, known as DDRL, and going forward may look to migrate these services to DDRIE, its Dublin-based entity, following the UK’s planned departure from the EU on March 29.

“At this point in time it is under DDRL,” says Wotton. “That is the entity that we have in place today and it is the entity in which we went to seek approval under [from Finma], and it is the entity that we used today for EMIR reporting and for Swiss regulatory reporting too,” says Wotton.

Subject to pending authorization from the Esma and the Financial Conduct Authorities, the DTCC aims to enable counterparty firms to fulfill their EU and UK reporting obligations under Finfrag, EMIR and the upcoming Securities Financing Transaction Regulation (SFTR) through a single consolidated platform. 

Many providers of EMIR and SFTR reporting are currently still waiting for approval from the regulators to operate as an EU and UK based trade repository, to continue serving their existing clients post-Brexit. The FCA will be accepting applications for the UK-registered entities from January 7 onwards and to date, there has been no further update on the status of applications. In the event of a hard Brexit, all UK and EU applications will have to be approved ahead of the March deadline to ensure trade repositories are permitted to provide reporting services across both markets.