Depository Trust & Clearing Corp. and the Commodity Futures Trading Commission agreed to a voluntary dismissal on litigation DTCC brought against the CFTC in 2013 regarding the collection of trading information about swaps. The suit was sparked by the CFTC's decision to allow the Chicago Mercantile Exchange to route swaps-transaction data to its own database, rather than the DTCC's transaction-data repository. "We look forward to continuing to work with the CFTC on this critical component of Dodd-Frank implementation," DTCC General Counsel Larry Thompson said in a statement.
Depository Trust & Clearing purchased the remaining stake of post-trade service provider Omgeo, which the global registry previously co-owned with Thomson Reuters. The deal "enables DTCC and Omgeo to facilitate a unified strategy around key industry initiatives including the move to trade date affirmation of institutional trades, settlement matching in DTCC's subsidiary, Depository Trust Co., and the adoption of shorter settlement cycles in various markets," Omgeo President and CEO Marianne Brown said.
Depository Trust & Clearing CEO Michael Bodson says better coordination is needed between international regulators. Speaking at the SIFMA 2013 Operations Conference, Bodson noted that DTCC has proposed and attempted to build a single-trade repository and a system that creates legal-entity identifiers to replace the current system that employs multiple repositories and multiple identification codes. The Financial Stability Board has been working to create an LEI system that would give nations control of registration and record-keeping, but, Bodson says, a limited amount of countries have the technology and legal system for this to work properly.
Although Depository Trust & Clearing is seeking to become a worldwide derivatives-data repository, differences between U.S. and EU law are proving difficult to overcome, the company says. "There are fairly major impediments to data sharing at the moment," said Stewart Macbeth, president of DTCC unit Deriv/SERV. Hear from DTCC at SIFMA's 2013 Ops Conference.
The Depository Trust & Clearing Corp. said that despite the downgrading of the U.S.'s credit rating by Standard & Poor's, it will not alter the valuations of Treasurys it holds in its facilities. The DTCC told traders that they will not be required to post more Treasurys to maintain their collateral levels on outstanding trades. The DTCC did say the National Securities Clearing Corporation is adding "intra-day" margin calls in an effort to deal with increased market volatility and to lower counterparty risks. Standard & Poor's has cut the ratings on National Securities Clearing Corp., Fixed Income Clearing Corp. and Depository Trust Co. to AA+. The entities are subsidiaries of Depository Trust & Clearing Corp. S&P also downgraded Options Clearing Corp., the clearer for all nine U.S. options exchanges. Recent events make SIFMA's Market Structure Conference a must-attend event, register today.