DTCC set to open Japanese trade repository for OTC derivatives ahead of April deadline
The Depository Trust & Clearing Corporation will start operating a Japanese over-the-counter derivatives trade repository this month, flowing approval by the Financial Services Agency of Japan. This is ahead of the J-FSA’s mandated 1 April deadline for market participants in Japan to begin reporting OTC derivatives transactions directly to regulators or to a third-party trade repository.
Based in Tokyo and operated by the company’s DTCC Data Repository (Japan) – DDRJ – subsidiary, it is the first trade repository to be approved and established for the Japanese market.
DDRJ will support trade reporting across four major OTC derivatives asset classes including credit, equities, interest rates, and FX. The service uses the same messaging and software as DTCC’s repository services in Europe and the US, which are already in operation. It says this will ensure consistency in the data accessed by regulators in addition to clients avoid duplicated costs as they comply with reporting requirements in multiple jurisdictions across the globe.
“DTCC is pleased to be able to deliver to regulatory authorities and market participants in Japan a comprehensive, robust trade repository that brings greater transparency and risk mitigation to the OTC derivatives markets,” said Michael Bodson, chief executive, DTCC. “We are committed to working with supervisors to promote a safer environment for OTC derivatives trading as well as helping our clients in Japan and worldwide meet their reporting obligations.”
“The launch of a Japanese trade repository is a significant and welcome development for facilitating effective OTC derivatives trade reporting in this market,” said Keiko Fukuda, Executive Director at Morgan Stanley MUFG Securities. “It is critical that there is in place a strong infrastructure that provides market participants with the ability to submit trades for regulatory supervision in a seamless and cost-efficient manner.”
“Japan continues to grow in prominence as an important component of OTC derivatives trading globally,” said Stewart Macbeth, President and CEO of DTCC’s Deriv/SERV LLC subsidiary. “DTCC is focused on providing regulators and our clients in Japan with the guidance and services they need locally particularly now that reporting requirements are beginning to take hold in this market.”