EU watchdog fines DTCC repository over data failures

EU watchdog fines DTCC repository over data failures

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EU securities watchdog ESMA has fined DTCC’s London-based trade repository €64,000 for failing to put in place systems capable of providing regulators with direct access to derivatives trading data.

Immediate access to swaps and futures trade information is a key requirement under the European Markets and Infrastructure Regulation (EMIR).

The rules are designed to improve transparency and help monitor systemic risks in the derivatives markets - an area often cited as the root cause of 2008's financial crisis.

DTCC's penalty, albeit miniscule for the American post-trade giant, marks the first time ESMA has taken enforcement action against a trade repository registered in the European Union.

DTCC Derivatives Repository Limited (DDRL) is the the largest EU registered trade repository and provides a suite of post-trade record-keeping for over the counter equity, credit and interest rates derivatives.

The group also has similar set-ups in the US, Singapore and Japan.

ESMA found that London-headquartered DDRL failed to provide direct and immediate access to derivatives data from March to December 2014, a period of nine months.

During that time access delays increased from two days to 62 days after reporting and affected 2.6 billion reports.

This was due to DTCC failing to put in place adequate data processing systems.

It also failed to inform ESMA in a timely manner of the delays that were occurring and took three months to establish an effective action plan even while delays were worsening.

Responding to a request for comment, a DTCC spokesperson said that the group "continues to work closely with ESMA and with regulators around the world to ensure the timely submission of derivatives trade data in support of G20 goals". 

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