[ T H O U G H T L E A D E R S H I P | D T C C ]
The changing face of derivatives reporting
Chris Childs , managing director , head of repository and derivatives services at DTCC , and CEO and president of DTCC Deriv / SERV , tells The TRADE about the industry ’ s need for a new approach to derivatives reporting .
Among the forces that have shaped the global financial industry over the last decade – including relentless cost-cutting pressures and rapid technological advances – arguably one of the most consequential has been the proliferation and continual updating of regulatory mandates . In particular , reporting mandates for derivatives transactions resulting from the 2008 financial crisis have presented unique challenges for firms due to their complexity and jurisdictional discrepancies .
The expansion and ongoing evolution of this regulatory landscape has required financial firms , large and small , on the sell-side and buy-side along with their service providers , to dedicate tremendous human and financial resources to compliance . It has also challenged industry solutions designed to assist firms in carrying out their derivatives reporting obligations to adapt and update their features and functionality to keep pace with the changes .
The TRADE recently spoke to Chris Childs , managing director , head of repository and derivatives services at DTCC , and CEO and president of DTCC Deriv / SERV , about the industry ’ s need for a new approach to derivatives reporting that reduces the cost and operational burdens associated with regulatory reporting compliance for reporting firms . Childs discusses what DTCC has done to meet this need , with the launch of its DTCC Report Hub ® service , a multi-function pre- and post-reporting service platform that complements trade reporting done via its Global Trade Repository service ( GTR ).
Transaction reporting has evolved over the past decade in response to new rules and regulations promulgated in jurisdictions around the world . Describe the trade reporting solutions DTCC has brought to market . Chris Childs : DTCC staked out its industry leadership early on in this area by building the industry ’ s first trade repository ( TR ) service .
The surge of global legislative and regulatory activity triggered by the 2008 financial crisis – and guided by the Group of 20 nations ’ ( G20 ’ s ) recommendations on measures to reduce market risk – included directives that derivatives transactions be reported to repositories accessible to regulators .
The enactment of the Dodd- Frank Wall Street Reform and Consumer Protection Act and the roll out of the Commodity Futures Trading Commission ’ s ( CFTC ’ s ) reporting rules in the US in addition to the European Union ’ s ( EU ’ s ) passage of its European Market Infrastructure Regulation ( EMIR ) created the need for global reporting solutions .
Having established the Trade Information Warehouse , the industry ’ s first infrastructure for record retention and asset servicing of cleared and bilateral credit derivatives , several years earlier , DTCC was wellpositioned to continue steering the industry ’ s efforts to build out a TR infrastructure .
DTCC now operates licensed /
46 // TheTRADE // Spring 2021