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Foreign Exchange

DTCC begins user testing FX repository

The Depository Trust & Clearing Corporation (DTCC) has started user testing its new global trade repository for over-the-counter (OTC) FX and is planning to roll it out fully in the fourth quarter.

The firm, along with financial messaging service Swift, was selected in July by the Global Foreign Exchange Division (GFXD), a trade body representing 90% of the worldwide foreign market, to determine the structure and requirements of the new repository to ensure it meets regulatory requirements, as post-trade reporting rules come in to force this year. The service will be delivered in two phases to allow for testing and to provide greater flexibility for firms planning to use the repository to meet regulatory reporting requirements.

The first phase, which began on Tuesday, will cover testing for data submission of primary economic terms, confirmation data and snapshot reporting for FX forwards, swaps and derivatives by firms.

The second phase, which is expected to start around July 1, will add testing for further message types and extend reporting, and full production is expected to be available in October.

DTCC is working on establishing aggregate public data reporting capabilities for FX products and is consulting with the OTC Derivatives Regulators’ Forum, central bank-sponsored FX committees and the GFXD.

DTCC plans on publishing aggregated data on OTC FX trades, for example by volume, currency, product type and tenor, in a form that will be “timely and meaningful”, and provide enhanced transparency in the market. Both the public and regulatory data are expected to be made available in the fourth quarter of 2012.

“Members of the GFXD, along with others, have been extremely proactive with efforts to ensure that an industry-wide, global solution exists to meet multiple reporting requirements,” says James Kemp, managing director of GFXD.

“The rapid development of this trade repository is excellent progress towards achieving the FX markets’ transparency objectives for both regulators and the public.”

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