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Foreign Exchange

Vendors enter FX trade repository race; Regis-TR aims for October launch

Competition to become the preferred trade reporting repository for the FX market has started to heat up in recent weeks after trade processing and clearing vendors announced plans to start repositories in response to new global post-trade reporting regulations.

Regis-TR, the trade repository venture between Deutsche Börse subsidiary Clearstream and Iberclear, which clears trades for Spanish stock exchanges, is on track to launch an FX trade repository in October. And last month, Swift, the financial messaging provider, confirmed that it had entered into a non-exclusive partnership with US clearer the Depository Trust and Clearing Corporation, to support the latter’s bid to launch a US-based FX repository.

Regis is also in advanced discussions with Swift to support the firm’s messaging standard for FX trade reporting. Swift accounts for 80% of the market in securities messaging. According to the venture’s deputy managing director, Thilo Derenbach, the FX repository will operational by the beginning of October for the full suite of FX products, including swaps, forwards and currency options.

Derenbach believes Regis can build an internationally competitive system. “We see numerous national trade repository solutions being analyzed across the globe and we are very interested in providing our Regis-TR service in a white-labelled form to such jurisdictions,” he tells EuromoneyFXNews. Regis also hopes to provide a service for commodities next year.

The Regis venture is an explicit response to requests for proposals (RFP) issued by the global FX division of AFME in April. The trade lobby group had sought proposals for regulator-accessible FX trade repositories in accordance with US Dodd-Frank regulations and proposed legislation in European, known as EMIR.

Concerns have been raised about market fragmentation and increased back-office costs if a plethora of competing repositories are built. AFME is expected to announce which proposal it will recommend to its members in the coming weeks. The recommendation should prove a boon to any chosen private repository, since AFME represents every major FX dealer – who will form the majority of the FX repository customer base.

Still, the field is open to any vendors that meet the regulators’ requirements, with both the US and European regions being chosen by market forces, though the ideal solution is thought to be a repository that services all regions. However, global market participants are unlikely to avoid some duplication, say some market structure analysts.

In Asia, governments look set to determine individual repositories. Hong Kong has just issued a trade repository consultation, as has Taiwan, with Korea believed to be doing the same. This would make it necessary to report to each of these jurisdictions in different formats. Meanwhile, in Israel, as of July 1, all institutions have to reporting all figures to the authorities denominated in shekels.