OTC derivatives: much still to be done
April 24, 2018

While significant progress has been made during the last eight years towards establishing a global reporting framework for over-the-counter (OTC) derivatives transactions, substantial work remains in the areas of data consistency, aggregation and access in order to be able to effectively monitor and reduce systemic risk, according to a white paper published today by The Depository Trust & Clearing Corporation (DTCC).

In its latest white paper, ĎA Progress Report on OTC Derivatives Trade Repositories: Many Miles Travelled, More Yet to Go', DTCC calls for continued focus on the definition and adoption of data standards and the exploration of opportunities to leverage new and emerging technologies.

The paper acknowledges the collaborative work that has been undertaken across the derivatives industry to address data reporting challenges in the areas of data sharing as well as the development of proposed global standards, such as the CPMI-IOSCO's work to establish guidelines for the consistent use and governance of the critical data elements (CDEs) needed to identify, process and report an OTC derivative transaction globally. While these efforts have helped to lay the foundation for a global reporting framework, the white paper suggests that further work remains to truly deliver upon the G20 goals of greater transparency and risk mitigation.

The paper recommends the industry examine opportunities to expand the use of data that is captured through the global reporting framework. For example, the credit default swap (CDS) market is a proven model for establishing a single trade record warehouse to collect and maintain data for all global CDS transactions and to hold a "golden source" record which serves the public good.

Chris Childs, President & Chief Executive Officer, DTCC Deriv/SERV, said: "The industry must implement consistent standards globally or, alternatively, normalize data in accordance with prescribed standards. Then the industry will be able to further reduce operational risks, costs and improve the value of the data for all that need to use it."





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While significant progress has been made during the last eight years towards establishing a global reporting framework for over-the-counter (OTC) derivatives transactions, substantial work remains in the areas of data consistency, aggregation and access in order to be able to effectively monitor and reduce systemic risk, according to a white paper published today by The Depository Trust & Clearing Corporation (DTCC).

In its latest white paper, ĎA Progress Report on OTC Derivatives Trade Repositories: Many Miles Travelled, More Yet to Go', DTCC calls for continued focus on the definition and adoption of data standards and the exploration of opportunities to leverage new and emerging technologies.

The paper acknowledges the collaborative work that has been undertaken across the derivatives industry to address data reporting challenges in the areas of data sharing as well as the development of proposed global standards, such as the CPMI-IOSCO's work to establish guidelines for the consistent use and governance of the critical data elements (CDEs) needed to identify, process and report an OTC derivative transaction globally. While these efforts have helped to lay the foundation for a global reporting framework, the white paper suggests that further work remains to truly deliver upon the G20 goals of greater transparency and risk mitigation.

The paper recommends the industry examine opportunities to expand the use of data that is captured through the global reporting framework. For example, the credit default swap (CDS) market is a proven model for establishing a single trade record warehouse to collect and maintain data for all global CDS transactions and to hold a "golden source" record which serves the public good.

Chris Childs, President & Chief Executive Officer, DTCC Deriv/SERV, said: "The industry must implement consistent standards globally or, alternatively, normalize data in accordance with prescribed standards. Then the industry will be able to further reduce operational risks, costs and improve the value of the data for all that need to use it."



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