The TRADE Derivatives - Issue 4 Q3 2013

Trade reporting n Market report

market and obviously they
are going to be very com-
petitive, but as the mar-
ket evolves, I think there
will be a greater need for
co-operation.”
There also needs to be
an agreement on standards
between SDRs, he says. “It’s
fine that the SDRs have split
between FpML and FIXML,
which are compatible. But
it’s about making sure
that the data itself is being
represented in a way that
can be easily aggregated
between the two.”
Stewart Macbeth, chief
product development officer
of the DTCC’s Deriv/SERV
unit, which also is also a
TR-applicant in Europe,
admits US buy-side firms
may have trouble seeing a
complete picture of their
reported trade information,
and says the CFTC’s data is
“absolutely” fragmented.

“If you look at most of
the large broker-dealers’
credit positions, the bilat-
eral world is in our SDR
and the cleared world is
in ICE, he says. “So if you
really want to understand
the risk positions of a large
broker-dealer in the US,
you have to aggregate across
two sources. The regulators
have the same issue.”
In a July speech, CFTC
board member Scott
three swap data repositories
(SDRs) – the Depository
Trust and Clearing
Corporation (DTCC),
IntercontinentalExchange
(ICE) and the CME Group
(CME) – since January this
year, with reporting respon-
sibility falling on brokers.

Unusable data

Robert Stowsky, senior analyst at Aite Group and research affiliate at MIT Sloan school of management, has conducted a study of US repositories and found buy-side firms have concerns over access to aggregated trade information delivered by brokers to SDRs.

Institutional investors
have 48 hours to dispute
information reported by bro-
kers and are pushing for the
ability to see a complete data
history of their trades, he
says. “But with swap dealers
reporting the trade to a SDR
of their choice on behalf
of the buy-side, and the
CME forcing trades it clears
through its SDR, for exam-
ple, a single trade is being
reported across multiple
SDRs, fragmenting the data.”
As such, buy-side firms
would have to go to the
DTCC for some field-infor-
mation on their trade, and
the CME Group for another,
for example. The CME and
ICE were given approval
by the Commodity Futures
Trading Commission
(CFTC) to send in-house
cleared data to their own
SDRs. The DTCC has since
filed a lawsuit against the
regulator, saying the move
was anti-competitive.
SDRs should be shar-
ing data, Stowsky says.
“Right now this is a new
n “Are regulators ready to absorb that data and
what are they going to do
with it?”