The Future of Derivatives Data: DTCC, CME and SDR’s

The Future of Derivatives Data: DTCC, CME and SDR’s

The future of derivatives data hangs in the balance as U.S. regulators deal with proposed Rule 1001, which would allow CME Group to report swaps data from its clients who have their swaps cleared with DTCC.

The looming case between DTCC and CME had so far resorted to arguments about transparency. Now, DTCC has threatened to sue regulators at the CFTC should they accept Rule 1001 as it stands.

The amended rule states:

“For all swaps cleared by the Clearing House, and resulting positions, the Clearing House shall report creation and continuation data to CME’s swap data repository for purposes of complying with applicable CFTC rules governing the regulatory reporting of swaps. Upon the request of a counterparty to a swap cleared at the Clearing House, the Clearing House shall provide the same creation and continuation data to a swap data repository selected by the counterparty as the Clearing House provided to CME’s swap data repository under the preceding sentence.”

Derivatives Data

Any potential case brought by DTCC against the CFTC would realize a 180 degree turn since November, when CME brought a case against the CFTC and DTCC threatened to intervene. The tables have now turned. Does this suggest that DTCC thinks it’s likely that the agency will side with CME’s proposed amendment?

CME Group is the country’s largest futures exchange and the operator of the Chicago Mercantile Exchange, the Chicago Board of Trade, and the New York Mercantile Exchange. In October, CME brought a case against the CFTC that challenged the regulatory agency’s ability to enforce reporting rules for swaps trading.  More specifically, CME did not want to be forced to release previously non-public reports on cleared swap transactions to CFTC-mandated swap data repositories (SDRs).

Clearly, a mixture of market positioning and litigation is poised to determine the future of derivatives data. If swap data repositories (SDR’s) are challenged in a fundamental way—by allowing CME to function simultaneously as an SDR and a clearinghouse—DTCC stands to lose business. On the other hand, allowing CME to function as both an SDR and a clearinghouse could potentially lead to transparency issues.

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About The Author


Felix Shipkevich

Felix Shipkevich

Mr. Shipkevich’s practice focuses on regulatory, transactional, and enforcement matters in the fields of futures, commodities, and derivatives. He works with Futures Commission Merchants (FCMs), Retail Forex Exchange Dealers (RFEDs), Introducing Brokers (IBs), Commodity Pool Operators (CPOs), Commodity Trading Advisors (CTAs), Swap Dealers (SDs), Swap Execution Facilities (SEFs), and domestic and offshore hedge funds. Mr. Shipkevich guides clients on procedures related to registration with the U.S. Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), as well as domestic and international regulators in local jurisdictions. Mr. Shipkevich prepares and helps implement compliance, anti-money laundering (AML), and Electronic Trading Systems (ETS) procedures for clients in the commodities and derivatives fields.

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