SEC approves first US securities swap repository
11 May 2021 US
Image: stock.adobe.com/Shuo
The US Securities and Exchange Commission has approved the registration of DTCC Data Repository (DDR), its first security-based swap data repository (SDR).
The approval will allow for the first time security-based swap transactions in the equity, credit, and interest rate derivatives asset classes.
Yesterday鈥檚 SEC announcement sets 8 November as the first compliance date for reporting and dissemination of security-based swap information (Regulation SBSR) 鈥� the regulation stipulates that the first SDR can accept transaction reports in a particular asset class six months after the registration date.
Regulation SBSR, which governs regulatory reporting to registered SDRs and public dissemination of security-based swap transactions, is a major component of the security-based swap regulatory regime established by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act 2011.
DDR鈥檚 go-ahead to operate as a registered security-based swap data repository (SBSDR) is a key step in completing the implementation of derivatives oversight in the US. Dodd-Frank鈥檚 Title VII divided the regulatory oversight of derivatives between the SEC for security-based swaps and the Commodity Futures Trading Commission for all other swaps.
SEC chair Gary Gensler says implementing Regulation SBSR fulfils an 鈥渋mportant mandate鈥� under the Dodd-Frank Act. 鈥淎 centralised database of security-based swap transactions is an essential reform to better understanding these markets, for surveillance and for enforcement. The data repository also will facilitate public reporting of security-based swap transactions, bringing much-needed transparency to these markets,鈥� Gensler adds.
DTCC executive director, DDR, Kate Delp notes yesterday鈥檚 announcement was an 鈥渋mportant step forward鈥� in the provision of greater transparency in the over-the-counter derivatives market.
鈥淲e are pleased to receive SEC approval of DDR鈥檚 application as an SBSDR, and look forward to offering security-based swap transaction reporting capabilities within our global platform. We are proud to extend our trade reporting capabilities in the US and are committed to working with our clients to help them prepare for the reporting date.
鈥淣ow is the time to begin to implement and test trade reporting solutions as the reporting compliance date draws near.鈥�
DTCC鈥檚 subsidiaries processed securities transactions valued at more than $2.15 quadrillion. Its depository provides custody and asset servicing for securities issues from 170 countries and territories valued at $63.0 trillion.
The move to finally implement under-utilised aspects of Dodd-Frank comes after newly minted SEC chair Gensler hinted that elements of the post-Great Financial Crash legislation could be used to enhance short selling disclosures, in the wake of the GameStop saga.
Dormant sections of 2011鈥檚 Dodd-Frank would oblige firms to record and publicly disclose short selling data at a minimum of once a month. The SEC was meant to revisit the requirement after Dodd-Frank but the reporting rules were instead left to gather dust.
In the third GameStop hearing in the House of Representatives last Thursday, Gensler said: 鈥淚鈥檝e directed SEC staff to prepare recommendations for the Commission鈥檚 consideration on these issues.鈥�
The approval will allow for the first time security-based swap transactions in the equity, credit, and interest rate derivatives asset classes.
Yesterday鈥檚 SEC announcement sets 8 November as the first compliance date for reporting and dissemination of security-based swap information (Regulation SBSR) 鈥� the regulation stipulates that the first SDR can accept transaction reports in a particular asset class six months after the registration date.
Regulation SBSR, which governs regulatory reporting to registered SDRs and public dissemination of security-based swap transactions, is a major component of the security-based swap regulatory regime established by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act 2011.
DDR鈥檚 go-ahead to operate as a registered security-based swap data repository (SBSDR) is a key step in completing the implementation of derivatives oversight in the US. Dodd-Frank鈥檚 Title VII divided the regulatory oversight of derivatives between the SEC for security-based swaps and the Commodity Futures Trading Commission for all other swaps.
SEC chair Gary Gensler says implementing Regulation SBSR fulfils an 鈥渋mportant mandate鈥� under the Dodd-Frank Act. 鈥淎 centralised database of security-based swap transactions is an essential reform to better understanding these markets, for surveillance and for enforcement. The data repository also will facilitate public reporting of security-based swap transactions, bringing much-needed transparency to these markets,鈥� Gensler adds.
DTCC executive director, DDR, Kate Delp notes yesterday鈥檚 announcement was an 鈥渋mportant step forward鈥� in the provision of greater transparency in the over-the-counter derivatives market.
鈥淲e are pleased to receive SEC approval of DDR鈥檚 application as an SBSDR, and look forward to offering security-based swap transaction reporting capabilities within our global platform. We are proud to extend our trade reporting capabilities in the US and are committed to working with our clients to help them prepare for the reporting date.
鈥淣ow is the time to begin to implement and test trade reporting solutions as the reporting compliance date draws near.鈥�
DTCC鈥檚 subsidiaries processed securities transactions valued at more than $2.15 quadrillion. Its depository provides custody and asset servicing for securities issues from 170 countries and territories valued at $63.0 trillion.
The move to finally implement under-utilised aspects of Dodd-Frank comes after newly minted SEC chair Gensler hinted that elements of the post-Great Financial Crash legislation could be used to enhance short selling disclosures, in the wake of the GameStop saga.
Dormant sections of 2011鈥檚 Dodd-Frank would oblige firms to record and publicly disclose short selling data at a minimum of once a month. The SEC was meant to revisit the requirement after Dodd-Frank but the reporting rules were instead left to gather dust.
In the third GameStop hearing in the House of Representatives last Thursday, Gensler said: 鈥淚鈥檝e directed SEC staff to prepare recommendations for the Commission鈥檚 consideration on these issues.鈥�
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