The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, issued its recommendations on global data harmonization to the CPMI IOSCO Harmonization working group today, detailing a proposed path towards a global data harmonization, with credit derivatives identified as the first step. The approach involves harmonizing approximately 30 data fields across global trade repository providers, essentially creating a global data dictionary; these fields are viewed as critical to financial stability and systemic risk analysis. This recommendation is in alignment with ISDA’s perspectives on data quality, and DTCC believes this approach provides a path forward to promote more active dialogue between CPMI IOSCO and the industry in order to address the existing reporting challenges that have emerged due to the jurisdictional implementation of reporting rules.
DTCC operates the Global Trade Repository (GTR), a derivatives trade reporting service for brokers, buy-side firms and corporates in nine jurisdictions across 33 countries. As a trade repository, GTR plays a critical role in bringing new levels of transparency to the OTC derivatives marketplace. However, in the absence of harmonized global data standards across jurisdictions and repository providers, data gathered to date has not been able to be leveraged to its full extent due to inconsistencies and quality.
Following a recent DTCC whitepaper, “G20’s Global Derivatives Transparency Mandate”, where the firm addressed G20 goals on trade repositories and its perspectives on achieving a harmonized global data set to meet these objectives, DTCC began efforts to review GTR’s reported fields across the nine jurisdictions the service currently supports. With this announcement, DTCC has proposed that this be extended to 30 fields across all trade reporting repositories, including GTR.
“As the world’s largest global trade repository, DTCC has remained committed to ensuring that the service is able to deliver upon the transparency goals that were called for by the G20 following the financial crisis,” stated Larry Thompson, Vice Chairman of DTCC, General Counsel of DTCC and Chairman of the Board of DTCC Deriv/SERV LLC. “In order to be able to fully capitalize on all of the benefits of this data, greater data standardization across repositories is required. We welcome feedback from the CPMI IOSCO Harmonization working group and look forward to continuing to work with regulators and the industry on this important initiative.”